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Public Bill Committees

Debated on Tuesday 18 October 2022

Levelling-up and Regeneration Bill (Twenty Fourth sitting)

The Committee consisted of the following Members:

Chairs: Sir Mark Hendrick, † Mr Philip Hollobone, Mrs Sheryll Murray, Ian Paisley

† Bradley, Ben (Mansfield) (Con)

† Cartlidge, James (South Suffolk) (Con)

† Davison, Dehenna (Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities)

† Farron, Tim (Westmorland and Lonsdale) (LD)

Fletcher, Colleen (Coventry North East) (Lab)

Gibson, Patricia (North Ayrshire and Arran) (SNP)

† Huddleston, Nigel (Lord Commissioner of His Majesty's Treasury)

Jupp, Simon (East Devon) (Con)

† Lewell-Buck, Mrs Emma (South Shields) (Lab)

† Maskell, Rachael (York Central) (Lab/Co-op)

† Moore, Robbie (Keighley) (Con)

† Mortimer, Jill (Hartlepool) (Con)

† Norris, Alex (Nottingham North) (Lab/Co-op)

† Pennycook, Matthew (Greenwich and Woolwich) (Lab)

† Rowley, Lee (Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities)

† Smith, Greg (Buckingham) (Con)

† Vickers, Matt (Stockton South) (Con)

Bethan Harding, Kevin Maddison, Committee Clerks

† attended the Committee

Public Bill Committee

Tuesday 18 October 2022

(Morning)

[Mr Philip Hollobone in the Chair]

Levelling-up and Regeneration Bill

I have a few preliminary reminders that Mr Speaker has asked me to read out for the Committee. Please switch electronic devices to silent. No food or drinks are permitted during sittings of this Committee, except for the water provided. Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes@parliament.uk.

Clause 184

Pavement licences

Question proposed, That the clause stand part of the Bill.

It is a pleasure, as ever, to serve under your chairmanship, Mr Hollobone. The temporary streamlined route for pavement licences implemented in 2020 has been successful in supporting the expansion of outdoor dining during the covid-19 pandemic and the economic recovery. To continue supporting the hospitality sector, and to encourage better use of our high streets for our communities, we are making that measure permanent.

Clause 184 inserts a new schedule that amends the Business and Planning Act 2020, making the measure permanent subject to the amendments set out within the schedule. The clause is necessary to ensure that businesses, communities and local authorities have a sustainable process going forward, which balances the interests of all and enables better use of outdoor spaces. I commend the clause to the Committee.

Question put and agreed to.

Clause 184 accordingly ordered to stand part of the Bill.

Schedule 17

Pavement licences

I beg to move amendment 199, in schedule 17, page 321, line 27, at end insert—

“(A1) In section 1 of the 2020 Act (Pavement licences), in subsection (5)(b) at end insert ‘but includes any part of a vehicular highway which is adjacent to a highway to which part 7A applies.’.”

This amendment would enable the pavement licence to include part of the carriageway, where the carriageway were adjacent to, for example, an eligible pavement. This would enable a licensing authority to grant licences which occupy part of the highway shared between space for pedestrians and vehicles.

It is a pleasure to resume debate with you in the Chair, Mr Hollobone. We support the principle of pavement licences, along the lines of the Minister’s introduction, but we have tabled a few amendments that would enhance them. We are interested in getting some views on the amendments, to ensure that the scheme works as well as it can, taking into consideration concerns about its implementation, whether of road users, walkers, businesses or disabled people. We need to ensure that all voices are heard, and the Bill provides a good moment to do so. As the Minister said, this was a very challenging time for business, but having gone through a dreadful couple of years of collective sacrifice we should seek to grab whatever good we can get from it.

One of the issues, with the benefit of hindsight, with the Business and Planning Act 2020, which legislated for pavement licences, is that a licensed area may take up part of the pavement but not part of the carriageway unless vehicles are already restricted or excluded from it. The existing provisions therefore protect vehicular space but reduce pedestrian space, which is contrary to the aims of “Gear Change”, the vision of the Department for Transport to make England a great walking and cycling nation. If it is right to license extra space for use for commerce, I do not think that we should put a blanket limitation on the nature of the space available, and not include highways when local space could sensibly accommodate it. Again, it would be a matter for local discretion whether it was reasonable to encroach on the space used primarily by motor vehicles, not just by pedestrians.

The amendment would allow a pavement licence to use part of the carriageway adjacent to a pavement. Local authorities would then be able to decide where it was appropriate to allow use of the carriageway. We would expect them to refuse the use of busy roads, but perhaps to license space in other roads and to use road furniture creatively, just as a build-out can accommodate a bus stop, to ensure that the space is still available in its usage. The amendment would empower local authorities, which know best in this regard, to make the decision, thereby giving a bit of flexibility. I am interested in the Minister’s thoughts.

The Government are incredibly supportive of provisions making it as easy as possible for businesses and authorities to facilitate outdoor eating and drinking through the use of the streamlined pavement licence process. I am grateful for the shadow Minister’s broad support for this measure.

There are already a number of ways in which a local authority can consider the pedestrianisation of a street—for example, through traffic regulation orders under the Road Traffic Regulation Act 1984 and through a pedestrian planning order under section 249 of the Town and Country Planning Act 1990. That includes facilitating the placement of furniture on the highway for al fresco dining. The regimes already in place to consider pedestrianisation include important processes to allow the consideration of any issues, including whether vehicular access is required at any time of the day. Pavement licences can then be granted for highways that have been considered under those processes. We have seen the success of that in practice across the country, including in Soho in London and in the Northern Quarter in Manchester, so I kindly ask the shadow Minister to withdraw his amendment.

I am grateful for the Minister’s answer. I felt that there was a contradiction, however, because she started by talking about a desire to streamline the process, but it was explained essentially as a double process. Not only will there be a pavement licence process, but the local authority will then have to do the other process that she detailed in order to change the use of the space. I am not sure that that is streamlined. Nevertheless, the facility is there to do it and I think that I have made my point, so I will not labour the argument any further. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 204, in schedule 17, page 322, line 7, at end insert

“, together with any profit share, the maintenance fee and the cleansing fee”

This amendment and Amendment 205 would enable the local authority to share in the additional profit accruing from a licence enabling the licensed business to trade on the highway, and to recharge to the licensee the cost of maintaining and cleansing the licensed part of the highway.

With this it will be convenient to discuss amendment 205, in schedule 17, page 322, line 10, at end insert—

“(1C) In subsection (1A)—

(a) ‘the profit share’ is such sum as the person who applies for a pavement licence, as part of an entity employing more than 250 people, and the local authority may agree represents one half of the additional profits arising from the grant of the licence during its term, or such sum as the local authority may reasonably determine to represent that amount in default of agreement;

(b) ‘the maintenance fee’ is such sum as the person who applies for a pavement licence and the local authority may agree represents the cost of maintaining that part of the highway comprised in the licence during its term, or such sum as the local authority may reasonably determine to represent that amount in default of agreement;

(c) ‘the cleansing fee’ is such sum as the person who applies for a pavement licence and the local authority may agree represents the cost of sweeping and cleansing that part of the highway comprised in the licence during its term, or such sum as the local authority may reasonably determine to represent that amount in default of agreement.”

See explanatory statement to Amendment 204.

A highway is part of the public realm. Every publicly maintainable highway is, under section 263 of the Highways Act 1980, vested in the highway authority. Pavement licences and the granting of public space to be used by private business must therefore strike the balance between commerce and the community.

Let us consider a very foreseeable example. Let us suppose that a large, national chain of pubs with an extensive frontage on a street—perhaps a pedestrianised street—seeks a licence for the use of that street for seats and tables. That, in and of itself, is a good thing. I love a decent pub garden. My hon. Friend the Member for Greenwich and Woolwich always complains that I make him stand outside. I hate being inside in a pub; I like being outside, and I suspect that there are a significant number of like-minded people who may wish to vote with their feet, so it is good that we are offering this facility. However, we should understand that it may well be a highly lucrative endeavour for the business. The business increases its capacity to trade, particularly in summer. We know that some of the very big chains can increase turnover by significant sums in this way.

At the moment, the local authority can charge a fee for the pavement licence. This Bill amends the fee from £100 per application under the 2020 Act to £500 for a new application and £350 thereafter for repeat applications. We say that this is a step in the right direction, but it is not likely to do much more than meet some of the administrative, monitoring and enforcement costs. Of course the public, under this process, lose their right of access to the area and, unless they are customers of the licensee, they do not gain any benefit from it, but, as I said, the licensee can derive significant benefit, so we have to try to find a balance, which is what I am seeking to do in amendments 204 and 205.

We know that things are tough enough, particularly for small and medium-sized businesses—often the local independents that populate much of our high streets—so I have removed them from this proposal by using the 250-staff threshold that the Government used with regard to calories on menus. I think that that is where I divined that they draw the line for small and medium-sized businesses. I would be interested to hear from the Minister whether she felt that that was not the case, because I am seeking to target the proposal particularly on larger companies, which perhaps can afford to pay a bit more.

It is incumbent on us to drive a hard bargain for our constituents and for a fair deal for this use of space, because the local authority will retain its obligation to cleanse, drain and maintain the street. Indeed, with more outside activity, the need for that could grow. It is important that those costs are reflected. Even when the licence is granted, the authority does not just offload its duties and obligations in this respect. Therefore these amendments would secure for the local authority a share in profits arising.

It is probably important to say at this point that these are probing amendments. There might be a different mechanism by which we could secure this outcome. If the Minister is minded that way, I certainly would be too, so I am interested in her views. I think that, in this process, a balance has to be found between private enterprise and the public interest and I do not think that we have quite found it yet, although what is in the Bill is a welcome move in that direction. I just wonder whether we can go a little further.

It is a continuing pleasure to serve under your guidance this morning, Mr Hollobone.

The amendment moved by the official Opposition gives us something to consider. For someone who represents an area such as Cumbria, where it is always sunny and al fresco dining can therefore happen at any time throughout the year, it is hugely significant. One of the learnings in the development of the pandemic that could have a positive ongoing legacy is the move towards dining and drinking outside, and making better use of the public realm. That is a positive thing.

Let us remember that pubs in particular have never been under more pressure than they are now. We lose many every week, with people losing their livelihood and communities the thing that holds them together. It is deeply troubling to see that happen. We should allow smaller pubs especially to gain the full benefit of anything that they can from the provisions allowing use of the pavement and parts of the highway to expand capacity and therefore increase profit.

I agree, however, that with larger employers and businesses we absolutely need to ensure shared benefit from the development for two reasons. First, we are giving local authorities more responsibilities. Planning departments—we have discussed this throughout the Bill—have an enormous role to play in ensuring that communities have genuine power. If we are devolving power to communities, we have to allow planning departments that work on behalf of those communities the resources—the scope—to be able to enforce their rules. This is an additional responsibility, so we should enable additional finance to go to the planning authorities to make sure that they can uphold the rules, protect the community and ensure that the costs to the local authority, the community and the council tax payer for highways, refuse collection and other things are borne jointly.

Secondly, many people will observe that throughout there has been a disconnect between the interests of the local authority and the business community. The proposed measure would integrate them—the fact that there is joint benefit shows that it is in the interests of the council tax payer and the business rate payer to do the same thing. Organised synergy is almost a consequence of the two amendments, which is why they are important. I hope that the Government will take them seriously.

The thing that is most wonderful about today is that only seven minutes into the Committee’s sitting, we have found some cross-party agreement, which is on the quality and value of a good pub garden. I hope that at some point we can share a pint in one, when the Bill Committee is over.

Clearly, in my last few trips, I have been in Cumbria on those incredibly rare rainy days, but the hon. Member for Westmorland and Lonsdale made a good point that pub and hospitality businesses are under pressure. According to our most recent stats, 73% of hospitality firms have outstanding debt as a result of the pandemic, so at this point we really do not want to put additional undue pressure on businesses.

In developing the proposals to make the streamlined pavement licensing process permanent, we have worked closely with local authorities, business, leaders of the hospitality sector and the community. That is why we are increasing the fee cap from £100. We will take detailed analysis of the actual cost to create a sustainable process, which will cover the cost to local authorities of processing, monitoring and enforcing the powers, while remaining affordable and consistent for businesses around the country. Businesses have seen inflated fees reaching thousands of pounds per application under the previous process.

Local authorities maintain flexibility to set fees at any level under the fee cap, to respond to local circumstances. For example, we have seen some areas make licences completely free in order to support their local high street. At a time of rising costs, we are not seeking to impose additional charges on business, in particular given that the hospitality industry was one of the hardest hit by the pandemic. On that basis, I ask the hon. Member for Nottingham North to withdraw his amendment.

I am grateful for the contribution of the hon. Member for Westmorland and Lonsdale. His point about joint benefit is a good way to characterise this—we do not envisage a situation in which business and local authorities scrap it out, but take a sharing approach, with the benefit going to local rate payers as well.

I am also grateful for the Minister’s response. She addressed well the point on cost, and we would not want local authorities and therefore rate payers to be out of pocket for the processes, so there should be cost recovery. However, I do not think she has addressed the point on the enhanced value through use of a public asset. As drafted, the amendment is not quite ready for inclusion in the Bill, but I hope that the Minister will reflect further on the point that it makes. We will certainly return to it in due course, but for the moment I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 200, in schedule 17, page 322, line 19, at end insert

‘(2B) In subsection (7), for “it is sent to” substitute “a receipt for the application is sent to the person who applies for a pavement licence by”.’

This amendment would cause the public consultation period to begin from the date on which the local authority sends a receipt to the applicant.

With this it will be convenient to discuss amendment 201, in schedule 17, page 322, line 30, leave out ‘14’ and insert ‘28’.

This amendment would amend section 2 of the 2020 Act so that the consultation period for licence applications would be 28 days, rather than 14.

Under the current provisions of the 2020 Act, the application and consultation process for a pavement licence do not adequately protect the public interest, particularly with regard to having suitable time to engage in a consultation. As it stands, the process is such that the applicant for the licence must immediately display a notice on their premises. The date of the application is the date on which it is sent to the local authority and that display is made. The local authority must then publicise the application for public comment. The public consultation period lasts seven days, starting the day after the application has been made. The Bill amends that to 14 days—that is welcome—but that is the sole change to the process. We think the process could be further improved and my amendments seek to do that.

Amendment 200 delays the date on which the application is deemed to have been made until the local authority issues a receipt. That delays the start of the clock on the public consultation period until the local authority has been able to act and do something about it. Amendment 201 builds on the increase to 14 days and instead increases the period to 28 days, therefore protecting the public with such a period of engagement. As the 2020 Act currently applies, if the local authority fails to publicise the application until a week after receipt, the public have no time to respond. That is assuming that they have not seen the site notice, and we know there is a challenge there. That cannot be right or fair for the public, and is probably reflected in the decision to move to 14 days. However, we still think that is not enough time, especially if we consider that we are often talking about the summertime. We know local authorities already have limited resources. If the appropriate officer is away or unavailable, there might be a delay to that process, when the clock is running down and the public do not know that.

That is worthy of consideration in and of itself, to ensure that the right balance is struck regarding the public interest. I am also interested in the Minister’s views on the following matter. In the 2020 Act, section 3(6) says that there may be circumstances in which the granting of a licence would have unacceptable effects on the use of a highway. That makes sense because, otherwise, why have a process? There are circumstances where the answer might be no. However, at the moment, if the local authority does not act quickly enough, the licence is granted notwithstanding those effects. There is a contradiction there. Can the Minister say whether the Government wish to draw the line at 14 days? Is it clear that there could not be a situation where what ought to be a rejected grant could, through delay, be granted anyway?

I thank the shadow Minister for his clarity on the purpose of his amendments. The pavement licence process that we are seeking to make permanent has been successful over the past few years because it provides a simpler and more streamlined process to gain the licence. We feel that the amendments would place unnecessary new administrative processes on local authorities by requiring a receipt to be sent to all applicants. They also have the potential to create a delay in the process, meaning that licences could take longer to be determined should receipts not be processed within reasonable timescales. We are, however, seeking to double the consultation and determination periods, compared with the temporary process, to ensure that communities have sufficient opportunities to comment on applications.

We have worked closely with stakeholders, including groups representing disabled people, local community groups, businesses and local authorities, in considering the consultation period when making the streamlined pavement licence process permanent. In working with those groups, we have sought to achieve a balance between a quick and streamlined process and ensuring that process is sustainable for the long term and gives communities an opportunity to comment on applications. That is why we are setting the consultation period at 14 days—double that of the temporary process. We feel that the amendments would create a slower process than that which it replaces, adding unnecessary administrative burdens for local authorities.

The shadow Minister is correct that if the local authority does not decide within the 28 days, the licence will be deemed granted, but local authorities still hold control, as they are able to publish conditions in advance that will automatically apply to any deemed licence. That provides an additional layer of protection, so I kindly ask him to withdraw the amendment.

I am grateful for that last point on protection, which addresses the issue. Where there is a difference is that the Minister characterises this as a possible delay in the process. I would say that that is the whole purpose. Our interest is in ensuring that the public get the full time to have their say. It is welcome that there has been consultation with groups who take an interest in this matter. I would be slightly surprised if the consensus among them was that less time is better, or that the weird period where the application has started and they just do not know about it is a desirable use of the first two or three days of the 14, but I might have to test that with them outside the Committee. However, that is probably a point to return to in due course, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 203, in schedule 17, page 322, line 31, leave out paragraph 7 and insert—

“7 (1) Section 3 of the 2020 Act (determination) is amended as follows.

(2) After subsection (8) insert—

‘(8A) A local authority, in deciding whether to grant a pavement licence under subsection (3), shall have regard to the desirability of maintaining the free flow of pedestrians and other road users along the highway, and the avoidance of inconvenience to such persons.’.”

This amendment would confer discretion on a local authority to have regard to the needs of road users in deciding whether to grant a pavement licence.

As I said in the previous debate, under the 2020 Act the local authority can refuse to grant licences that prevent traffic from passing along the highway or that inhibit the passage of, say, mobility scooters. However, the Act is not clear—I want to test the Minister’s views on this—about whether a local authority can refuse a licence that inhibits or unduly influences the free flow of people or their enjoyment of the public amenity. For example, what if an authority believed that the use of the licence would substantially interfere with the free flow of pedestrians or cycles at a peak time or deprive people of the use of street facilities such as benches? If residents living nearby, or in flats above shops, would be disturbed by the use of the licence above and beyond what we would normally expect under the alcohol licensing process, would an authority be able to refuse the licence on that ground alone? The Government’s guidance states that

“1500mm clear space should be regarded as the minimum acceptable distance between the obstacle and the edge of the footway”,

but 1.5 metres is not a particularly generous allowance in a shopping street. Would the Minister be comfortable with a local authority seeking more than that?

The amendment proposes a solution to the examples I have listed. It proposes that an authority should be able to refuse a licence if the use of it would interfere with pedestrian flow—for example, if it would leave the pavement so narrow that pedestrians might feel they had to step into the carriageway to pass each other, which obviously is not very desirable. I am keen to test the Minister’s views on that, and to get on record the level of flexibility that local authorities have to balance the enjoyment of the amenity across various, possibly competing, interests.

I thank the shadow Minister for raising an important issue that local authorities must consider when determining applications, which is the continuing flow of pedestrians and other road users on the highway. The Business and Planning Act 2020 already requires that local authorities take that into consideration when determining applications through section 3(6), and it prevents licences from being granted where they would prevent pedestrians or other non-vehicular traffic from entering or passing along the highway or having normal access to premises adjoining the highway.

Ensuring that pavements remain accessible to everyone, including disabled people, is a condition of the temporary pavement licences issued by councils. Where that condition is not met, licences can be revoked. To provide some reassurance, we have worked with the Royal National Institute of Blind People and the Guide Dogs for the Blind Association to refine the guidance to ensure that local authorities consider the needs of people who are blind when setting conditions and making these decisions.

We have carefully considered the issue of minimum distances, which the shadow Minister raised, and we judge that we should leave some room for reasonable local discretion, given the different physical environments involved. However, we have made it clear that 1.5 metres will be the minimum acceptable width in most circumstances. We therefore resist the amendment on the basis that the existing legislative framework already requires local authorities to consider these issues, and they cannot grant a licence if pedestrians are prevented from using the highway as they usually would. I therefore kindly urge the shadow Minister to withdraw his amendment.

I am grateful for that answer. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 202, in schedule 17, page 322, line 32, leave out “14” and insert “28”.

This amendment would allow a local authority 28 days to determine the application, instead of 14.

If this feels a bit like a replay of the debate on amendments 200 and 201, I assure colleagues that it is slightly different—they might just have to squint to see that.

At the moment, the Bill retains the stringent regime whereby a local authority must determine an application for a pavement licence within a fixed period. Formerly, that period was seven days; it will now be 14 days. If the local authority fails to do so, the application is deemed to have been granted. Labour wanted to extend the period for consultation purposes, but we have not succeeded. I want to test the point of potentially amending it to give the local authority

“28 days to determine…instead of 14”,

as it says in amendment 202.

We remember well the quick passage of legislation during the early knockings of the pandemic. As the Minister said, the industry was struggling and we needed to support it, and quick action was integral to that. The times for consultation and determination in the 2020 Act reflected that, but now that we do not have such time pressures, it is reasonable to expect a little more time for determination, not least because local authorities are hard-pressed. They will probably have only a single person, not teams of people, working on these applications.

The two-week period would not align with most applications people might make to their local authorities. For example, it would certainly not align with an alcohol licence—ordinarily, that would not be determined in 14 days, and it definitely would not be deemed to be granted if the clock had run out. Labour feels that having a little more time—28 days, rather than that two-week period—would give space for creative solutions in line with those the Minister set out in the previous debate and would ensure a fair balance between the business, the public and the local authority.

We have worked closely with stakeholders, including groups representing disabled people, local community groups, businesses and local authorities, in considering the determination period when making the streamlined pavement licence process permanent. In working with those groups, we have sought to achieve a balance between a quick and streamlined process and ensuring that the process is sustainable for the long term and gives local authorities sufficient time to consider any issues and determine the application. That is why we are setting the determination period at 14 days—double that of the temporary process.

I refer the shadow Minister to comments I made on the previous amendment. Local authorities can publish conditions in advance, which will automatically apply to any deemed licence. However, even if a licence is granted, local communities will still be able to contact local authorities about any concerns they have, and authorities will have enforcement powers to tackle any issues raised. We deem that the period is lengthy enough, but local authorities will of course continue to have those enforcement powers should any issues arise. We fear that the amendment would create a slower process than that which it replaces. I therefore urge the shadow Minister to withdraw it.

It absolutely would create a slower process, but that was the intention. I will not press it to a Division, but I hope the Minister will reflect on the fact that it seems considerably out of kilter with other decisions of this nature that are made for licences and permits. I cannot think of another that would be as quick as 14 days, with a deemed acceptance if the clock runs out. In those others cases—say, for a parking permit or an alcohol licence—there is good reason to have a little time for reflection, and I think those reasons probably apply here.

This is perhaps not a point to labour any further today, but I hope the Minister will keep thinking about it. We could be in danger of being just a little too streamlined. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 206, in schedule 17, page 323, line 5, at end insert—

“(8A) (1) Section 5 of the 2020 Act (conditions), is amended as follows.

(2) After subsection (7) insert—

‘(7A) The conditions to which a licence granted by a local authority may be subject include—

(a) a condition that any furniture which may be placed on the highway under the licence must be removed from the highway at times when the premises are not open to the public;

(b) a condition that, where the furniture to be put on the relevant highway consists of seating for use by persons for the purpose of consuming food or drink, the licence-holder must ensure that smoking or vaping does not affect others.’.

(3) After subsection (8) insert—

‘(9) But regulations under subsection (8) must not prevent a local authority imposing a condition, nor affect a condition imposed by a local authority for the purposes of subsection (7A)(b).’”

This amendment would allow a local authority to require that furniture is removed from the highway when it is not in use, as well as imposing a condition to require the licensee to prevent smoke-drift affecting those in the vicinity.

Me again. Sections 5(4) to (6) of the 2020 Act cover the imposition in a licence of a “no-obstruction condition” and a “smoke-free seating condition”. These conditions require the licensee to avoid the effects specified in section 3(6), including

“preventing traffic, other than vehicular traffic, from…passing along the relevant highway”

and to make reasonable provision for seating where no smoking is permitted. The Bill does not affect these requirements, which the Opposition support. However, we might want to tighten up these provisions to ensure they have the desired effect.

Local authorities are already required to impose a smoke-free seating condition to ensure that reasonable provision is made to accommodate non-smokers. A smoke-free seating condition, however, does not give the public, people using the highway or neighbouring premises, or people living above the premises explicit protection to ensure that their enjoyment of the amenity is not affected by people smoking. Smokers are more likely to go to outdoor tables because they cannot smoke inside, and that can throw down a gauntlet, in that the public have to run through a cloud of smoke.

Amendment 206 would expressly enable local authorities not just to lay down conditions about smoke-free seating, but to require in those conditions that the licensed area should not affect passers-by, neighbouring shops or homes. If, for example, there are flats above a café, a condition could require steps to avoid the occupiers being affected by smoke drift. We are seeking a balance, so that people using a highway can do so peacefully and with the full enjoyment of the amenity. I hope the Minister will say that local authorities can already do that, but if that is not the case and if this amendment is not the right answer—though I think the principle is likely one that is shared—how do local authorities ensure that balance for people?

I thank the shadow Minister for his dedication on this point. Pavement licences may be granted subject to any condition that the local authority considers reasonable, as set out in section 5(1) of the Business and Planning Act 2020. We are aware anecdotally of conditions that would, for instance, require licensed furniture to be removed when not in use and that go further than our national smoke-free condition.

We are all about empowering local areas and relying on local leadership. That is why we consider that local authorities have the local knowledge and appropriate powers to impose such conditions, should they consider that necessary. A number of local authorities have already implemented local smoking ban conditions for outdoor seating, including the City of Manchester, Newcastle and North Tyneside, so it is clear that local conditions can be implemented where it is appropriate and desired. On that basis, we do not think it is necessary or appropriate to create national conditions, and there are circumstances where it may not be necessary or appropriate on a local level. I would therefore ask the shadow Minister to withdraw his amendment.

I am grateful for that very clear answer. There are areas where this is still a point of debate. I think the Minister’s answer alone will resolve that. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 207, in schedule 17, page 324, line 19, at end insert—

“(4A) If the person leaves or puts removable furniture on the relevant highway in contravention of the notice, the local authority may issue a fixed penalty notice of £500 to the person in accordance with guidance issued by the Secretary of State.

(4B) Subsection (4A) applies whether or not the local authority has taken the action specified in subsection (4).”

This amendment would enable local authorities to issue £500 fixed penalty notices to persons who leave or put removable furniture on a street in contravention of a notice.

With this it will be convenient to discuss amendment 208, in schedule 17, page 324, line 19, at end insert—

“(4A) It is an offence to leave or put removable furniture on the highway in contravention of a notice issued under subsection (3).

(4B) A person guilty of an offence under subsection (4A) is liable on summary conviction to a fine.

(4C) A person may be prosecuted for an offence under subsection (4A) notwithstanding whether or not the local authority has taken action against the person under subsection (4).”

This amendment would make it an offence to contravene a local authority notice requiring a person to remove furniture or to refrain from putting it on the highway.

This is my final amendment to schedule 17. This is a really important point, and I hope to find the Minister in listening mode. The provisions in part 10 of the Bill have addressed many of the problems with the temporary regime for pavement licences and have given local authorities a bit more say and strength in this matter. That is very welcome.

However, under the temporary regime we are seeking to replace, many licensing authorities highlighted the challenge of not being able to adequately enforce the regime they are overseeing, with district councils issuing licences under the temporary regime, while enforcement powers remain with county councils under the Highways Act. A couple of the answers the Minister has given have relied on enforcement, so the enforcement point is important. For example, if a premises puts tables and chairs outside its business without a licence, the licensing authority is not the one that can take action; it needs the highways authority to do that, so it already gets a little complicated.

That can have an impact because there have been cases across the country where, seeing a change in culture—suddenly all these tables and chairs are springing out—businesses that did not know that they had to apply stuck tables and chairs out in good faith. However, they had not gone through the processes, so they have not looked at passage, particularly for disabled people, noise nuisance and possibly even customers being at risk if they have to go into the road. Again, there is a reason why there is a regime around this.

Under the current provisions, if a business breaches its licence, licensing authorities can remove the furniture and store it, require the person to pay the authority’s reasonable costs for removal and storage, and refuse to return the furniture until those reasonable costs are paid. If, within the period of three months, the person does not pay the reasonable costs or recover the furniture, the authority may dispose of it by sale or in any other way it thinks fit, and retain any proceeds of sale for any purpose it thinks fit.

For some licensing authorities, particularly bigger ones, those powers will be workable, but others have concerns about the logistical challenges involved and that those provisions will not be effective for them. For example, many councils have said that they will not have the capacity to collect or store that furniture and that removing it could place licensing or other officers in a confrontational situation with business owners and create other drama. There is therefore a case for licensing authorities to have alternative powers, which is what these amendments are designed to address.

Mr Hollobone, you, like many colleagues in this room, have done a lot of service in local government, and “works in default” is important for local authorities to be able to use. If a house is going to fall over and bring its neighbours down with it, the local authority must be able to do something about it, and those who ought to pay must be the ones liable for that final bill. However, getting that money is a real pain, and those who are inclined not to do the right thing in general will often not do the right thing in that instance. So perhaps having a slightly different tool in the armoury would help.

Amendments 207 and 208 would make it an offence to contravene a local authority notice requiring a person to remove furniture or to refrain from putting it on the highway. That would enable authorities to issue £500 fixed penalty notices to persons who leave or put removable furniture on a street in contravention of a notice.

The amendments will also offer licensing authorities an alternative approach to tackling non-compliance, by creating an offence of breaching a pavement licence or operating without one, and by giving councils the ability to issue a fixed penalty notice for those offences. Councils will then have a range of different enforcement approaches, such as seizing the furniture or issuing a notice, depending on the circumstances of each case.

I am pleased to have support on this issue from the Local Government Association, the Institute of Licensing and the National Association of Licensing and Enforcement Officers. They support these amendments, so I think we are in the right place regarding practicalities. I hope the Government, either today or at a later stage, will also back this approach, because it would give just a little more flexibility.

The Government recognise the importance of having a system that can be properly enforced to deter and tackle the unauthorised placement of furniture. Powers introduced in the Bill enable local authorities to serve notice requiring that businesses remove furniture that has been placed on the pavement without a licence. If that notice is contravened, local authorities can remove furniture themselves or issue an instruction to have it removed, and can then recover the costs of that and go on to sell the furniture and retain the profits.

The Government’s position is that the introduction of the powers proposed will lead to appropriate protection of our communities by giving local authorities powers that work as a deterrent and to directly tackle issues where notices are ignored, ensuring that the licensing system operates appropriately. Ultimately, local authorities will still have the power to revoke a licence.

It is also important to note that highways authorities already have powers in the Highways Act 1980 to tackle obstructions on the highway. That includes section 148, which creates an offence of depositing, without lawful authority or excuse, things that cause interruption to users of the highway.

The shadow Minister mentioned some of the groups that he has worked with, and I would be delighted to sit down with him to discuss their response. However, at this stage, I ask him to withdraw the amendment.

I am grateful for that. It is of note that those who know of what they speak in this area, particularly on a day-to-day basis, feel the way they do. However, the Minister’s offer is a good one and I will take her up on it. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 17 agreed to.

Clause 185

Historic environment records

I beg to move amendment 130, in clause 185, page 190, line 2, leave out “an historic environment record” and insert

“or have access to an historic environment record and adequate specialist advisory capacity”

This amendment is intended to ensure that all current models for service provision of HERs are covered by the provisions of Clause 185 and that HERs have access to specialist archaeologists and conservation officers.

It is a pleasure to serve with you in the Chair, Mr Hollobone. We are making good progress. Although the provision in the legislation on historic environment records is good in itself, it simply does not go far enough. My amendment calls for specialist archaeologists and conservation officers to be engaged in the planning process to a greater degree.

Historic environment records extensively map the physically accessible historic environment and archaeological areas. However, they do not come with a voice, a brain or context. The amendment, which is supported by those who work in the field, recognises the unique importance of specialist archaeologists and conservation officers in the process and the need to draw on their skills and expertise to advance the understanding of a site, which often is missed when just looking at historic records.

Although HERs are an important starting point, it is about the interpretation of the relevance of a site and using that specialist knowledge combined with the records that makes a significant impact on the site and makes it significant. Eighty areas in England are covered by HERs; two thirds of records are held online and are accessible via local authorities. An archaeologist can interpret the HER data, bringing it to life, placing it into context and giving the site relevance, weighing the possibilities and asking the challenging questions about that site: why is it there? What is it about? How does it impact on us, past and present?

I use York as an example of the discoveries made, because there have been so many incredibly significant finds in the city that have led to further exploration and understanding of the context of our history. Ensuring that we engage specialist archaeologists and conservation officers extends the understanding of our past and the influences on us. In York there have been so many finds on the Coppergate site. People think about the Jorvik centre, but behind that is the understanding of our city as an international place of trade, and what that meant then and today for diversity in our country and where we all come from. Those issues are so important in the archaeological context, but we would not get that from an HER. That is why it is so important to extend the legislation to ensure that we have those minds and that knowledge applied to the records, to ensure that there is significance.

I think about the Richard III finding in Leicester. Had the minds not been there, that site could have so quickly been missed. Yet the discovery of Richard III has given a huge economic opportunity for that city, not least from tourism. It is important that the skills that we have educated people in, which they have applied in their science and their art, can be brought into the process. That will ensure that we have the specialist archaeological and conservation officers’ engagement with the historic environment records, which will give real value to this process and ensure that we are not just looking at a paper exercise, but using the science and arts of archaeology and conservation to ensure the value of that site and build it into the identity of the community.

It is a pleasure to serve under your chairmanship, Mr Hollobone. I am grateful to the hon. Member for York Central for introducing this amendment. We agree that historic environment records are an important source of information about the historic environment of any given area, especially its archaeology. I defer to the hon. Member for York Central in terms of her knowledge of the history, particularly in her area. HERs can help the public learn more about where they live and ensure that local plans and planning decisions are informed by an understanding of an area’s history. I am glad that the hon. Lady and others have broadly welcomed clause 185 and the fact that we are putting historic environment records on a statutory footing for the first time. I know that the heritage sector has warmly welcomed that as well.

I completely understand the sentiment behind the hon. Lady’s amendment. The first philosophical question we have to deal with is not whether this is a good thing in principle, but whether it is necessary to have it in primary legislation. My gentle challenge to the hon. Lady—and the reason that in a moment I will ask her to withdraw her amendment—is that I am not convinced this necessarily needs to be put forward in primary legislation in this instance, given what I am about to outline and the fact that there will be other opportunities for her to make her case and for the Government to consider what is possible.

Furthermore, though I understand the intent behind the amendment, we are concerned that the wording may potentially water down some of the statutory duties of local authorities, if it is looked at in certain ways. It may also be inconsistent with the current drafting of subsections (4) and (5), which provides for how the duty should be discharged by a local authority. I know that is not the intention of the hon. Lady, but it is something that has been raised by officials in discussion and appropriate assessment of this. Consequently, I will ask the hon. Lady if she would be minded to withdraw her amendment. She may be aware that we intend to publish accompanying guidance alongside the intention of putting HERs on a statutory footing. That will give some clearer views about how those records can be maintained. If she is willing, we will be happy to receive more detail about her concerns, and I will ask that officials give those concerns complete consideration when we are creating that guidance. I hope that some of the understandable concerns she has outlined today can be assuaged through that process. Therefore I will ask the hon. Member if she is content to withdraw her amendment.

I welcome the Minister to his place. I take the challenge straight on. First, I reiterate the point that records themselves do not have application—they are presented in the way they are but they do not have a voice, they do not have context and understanding and they certainly do not have a brain, though they are written by those who do. Of course, archaeology is about a process and a journey; it is not static, but is moving the whole time. Therefore that context is really important to engage with.

I issue a challenge back to the Minster on the matter of watering down the role of local authorities. We all have a huge responsibility to preserve our heritage, understand our history and ensure that we are using the science of that. I know that archaeologists know more about science than we do, but we draw on the opportunities that that presents, which takes us into a stronger future as well as having commercial benefits. However, I am heartened to hear that there will be guidance that looks specifically at HERs and their application. I hope that when drafting the guidance the Minister ensures that specialist archaeologist resources are drawn on, as well as that of conservation officers, so that the maximum opportunity can be derived from looking at the historical context within the planning system. I will closely examine that guidance. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

I will not detain the Committee for long. Historic environment records are, as we have just discussed, an information service that provides access to comprehensive and dynamic historic environment resources. They relate, as the hon. Member for York Central indicated, to a defined geographical area, for public benefit and use. They are important sources of information for plan makers and applicants, as well as for the public and other Government bodies. We seek to put them on a statutory basis in order to provide clarity for the sector and those who wish to use the records. The clause will make it a statutory requirement that all local authorities maintain a historic environment record, which must be kept up to date, be maintained to an agreed standard, contain specified information as a minimum, and be publicly accessible.

Question put and agreed to.

Clause 185 accordingly ordered to stand part of the Bill.

Clause 186

Review of governance etc of RICS

Question proposed, That the clause stand part of the Bill.

The clause enables the Secretary of State to commission, from time to time, reviews of the Royal Institution of Chartered Surveyors. RICS, as many hon. Members will know, is the leading professional body for surveyors. Its members work across the UK, and RICS plays a vital role in these sectors. The guidance RICS publishes is valued by surveyors, industry and members of the public. The clause will enable reviews into RICS’s governance and its effectiveness in meeting its objectives. The clause does not prescribe the frequency of reviews, but gives the Secretary of State the necessary power and flexibility to further specify the scope and timing of any review that is required.

The Government do not envisage enacting a review of RICS on a regular or specified basis, so long as RICS demonstrates its effectiveness and is reviewing its own performance to the satisfaction of Government and Parliament, but should a review be required the clause sets out that the person the Secretary of State appoints to carry out the review must be independent of both the Secretary of State and RICS. The reviewer must submit a written report setting out the results and any recommendations of the review to the Secretary of State, who will publish a copy of the report. The clause does not include powers for the Secretary of State to act on any such findings or recommendations; they would need the explicit approval of Parliament. That will ensure that the Government have the ability in law to review whether RICS is performing in the public interest, and I commend the clause to the Committee.

It is a pleasure to serve with you in the Chair, Mr Hollobone. I thank the Minister for that explanation of the purpose of the clause, but he will be aware that the Royal Institution of Chartered Surveyors has expressed deep concerns about its precise wording, not least in terms of the precedent that it would set in relation to Government interference in other royal chartered bodies.

The issue is not the need for RICS to undergo periodic reviews of its governance and performance. Following the September 2021 publication of the Levitt report into the events that took place within the institution in 2018 and 2019, and the subsequent independent review undertaken by Lord Bichard, which examined its purpose, governance and strategy, RICS’s governing council accepted that regular independent reviews should take place, with their findings laid before Parliament and the devolved nations. The case for periodic independent reviews is therefore uncontested.

From what the Minister said, I think what remains the point of contention is whether the Secretary of State should be given the power to commission reviews of RICS, the scope and frequency of which are not clearly defined in the Bill, or whether the clause should be revised to reflect the commitments made by the institution in the light of Lord Bichard’s independent review. Given the serious concerns expressed by RICS, I will probe the Minister further on the Government’s rationale for the clause’s wording. Can he set out more clearly why, given that RICS’s governing council has made it clear that it accepts recommendation 14 of Lord Bichard’s review in full and will implement it subject to Privy Council approval, the Government believe that they still need to legislate to ensure that the Secretary of State can initiate reviews of RICS whenever they choose, as well as determine their scope?

Can the Minister also outline how such periodic reviews initiated by the Secretary of State using the powers in the clause would differ, if at all, from the parameters of independent reviews as outlined in paragraph 3.22 of Lord Bichard’s review, and accepted in principle by RICS? Can he reassure the Committee that the Government have given serious consideration to the potential impact of approving this clause unamended on not only RICS’s independence and ability to act in the public interest but the status of royal chartered bodies more widely?

As I say, we have no issue with the clause in principle, and we do not suggest that it should be removed from the Bill entirely; there is clearly a need to act to ensure that RICS is subject to regular independent review. However, we want the Government to properly justify the inclusion of the clause as worded in the Bill, rather than amending it to reflect developments following the publication of Lord Bichard’s review. I look forward to hearing the Minister’s response.

I am grateful to the hon. Member for his questions, which are entirely reasonable and on which I hope to provide some assurance. First, he asked why the Government are asking for this power, given that the Bichard review has outlined a process to resolve the current situation. The view of the Government and of previous Ministers who instigated this was that a process was likely to be under way, but equally there is value in the Secretary of State having this power, should it ever be necessary in the future, which obviously we hope it would not, and we have indicated that it would be used extremely sparingly. The principle of having the ability to instigate a review is one that the Government believe is reasonable and proportionate.

Secondly, the hon. Gentleman asked how the terms of reference would differ from an independent review. That question would have to be asked in individual circumstances, so I hope he will accept that it is a difficult one to answer. However, I understand the sentiments behind the point he makes.

Finally, the hon. Gentleman asked whether the Government have given serious consideration to the impact of this approach on the ability of RICS and other bodies to operate. I am happy to confirm that the Government and I will engage in discussion with RICS about this in the coming weeks before further stages of the Bill, and I will be keen to discuss with RICS all elements of the Bill, to understand its concerns and to see what reassurances I can provide.

Question put and agreed to.

Clause 186 accordingly ordered to stand part of the Bill.

Clause 187

Vagrancy and begging

Question proposed, That the clause stand part of the Bill.

We recognise that this is an issue on which there is a great deal of passion and heart. The Government agreed that the Vagrancy Act 1824 was antiquated and not fit for purpose. That is why we committed to repeal the Act once an appropriate and modern replacement was in place. I pay tribute to those who have campaigned so passionately on this issue, such as my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken).

It is important that we balance our role in providing essential support for the most vulnerable with ensuring that the police and other agencies can protect communities, while embedding rehabilitation and support at the heart of our approach. We launched a public consultation to seek views and inform any replacement for the Vagrancy Act. This placeholder clause will allow Government to introduce appropriate legislation once the results of the public consultation have been analysed.

In the meantime, the Government have made the unprecedented commitment to end rough sleeping within this Parliament. We remain steadfastly committed to that goal. By autumn last year, rough sleeping levels were at an eight-year low, having reduced by 49% since 2017. In September we published a bold new rough sleeping strategy, backed by £2 billion of public money, which sets out how we will end rough sleeping for good. I commend the clause to the Committee.

We are extremely concerned about the implications of this clause, and the explanation just given by the Minister does not reassure me one bit. Clause 187 is a placeholder clause that allows for a substantive clause to be introduced via Government amendment at a later stage in the Bill’s passage. Its effect is to disregard the full repeal of the Vagrancy Act 1824 that the House approved via amendments to the Police, Crime, Sentencing and Courts Act 2022.

There are two fundamental problems with the clause. First, in approving section 81 of the 2022 Act, the House made it clear that it wished the Vagrancy Act to be repealed in full, so that homelessness would no longer be criminalised. It did not seek to qualify the effect of that measure by stipulating that the repeal of the 1824 Act should be delayed until replacement legislation was brought forward, which appears to be the Government’s intention in inserting this placeholder clause in the Bill. The House voted purely and simply for repeal in full.

Secondly, precisely because clause 187 is a placeholder clause, we have absolutely no idea as we debate it today what the “suitable replacement legislation” will look like. It could include positive measures that featured in the consultation that the Minister mentioned, which was launched in April, such as multi-agency outreach, but there is a clear risk that any replacement regime introduced via the powers provided for by this clause could once again criminalise people who are begging or sleeping rough. We take the view that replacement legislation is not required at all. Existing legislation—including the Anti-social Behaviour Act 2003, the Modern Slavery Act 2015 and the Fraud Act 2006—already provides the police with sufficient powers to tackle harmful types of begging, harassment, antisocial behaviour and exploitative activity. By expressly allowing for the reintroduction of criminal offences or civil penalties for conduct that is the same or similar to that under sections 3 and 4 of the Vagrancy Act, clause 187 enables the effective re-criminalisation of homelessness and rough sleeping, with all the damaging and counterproductive implications that that entails.

As the Minister has recognised, the Vagrancy Act is an embarrassing remnant of Georgian England’s approach to the poor and destitute. It deserves to be consigned to the dustbin of history in its entirety, rather than being surreptitiously restored in a modern form to enable the criminalisation of rough sleeping or passive begging. As I said, the House made its views on this matter clear during the passage of the Police, Crime, Sentencing and Courts Act, but if the Minister is in any doubt about the strength of feeling on this issue, she need only look at the long list of names of Members from her own Benches who have signed amendment 1, in the name of the hon. Member for Cities of London and Westminster (Nickie Aiken).

We do not intend to oppose clause 187 today, but if the Government do not voluntarily withdraw it from the Bill, we will work with Members from across the House to ensure that it is removed on Report. I hope that the Minister can give some indication today that that will not be necessary, and that the Government will reconsider their position.

Likewise, I am appalled and deeply troubled by this provision. Clause 187 feels gratuitous—unnecessary. As we have heard, plenty of provisions already exist to allow the police to deal with antisocial behaviour that could be associated with rough sleeping and people who are begging. This clause feels unnecessary and counterproductive. Above all, it feels like an act of bad faith, given what the Government have committed to doing—both from the Treasury Bench in the Commons and from the Dispatch Box in the other place.

Tomorrow, we will either celebrate or mourn the 100th anniversary of the last Liberal leaving No. 10 —notwithstanding the current sleeper agent, obviously. The legislation that is brought back to life by this clause was nearly 100 years old, and out of date, back then, but even saying that is not going far enough, because if something is morally wrong, it is morally wrong no matter how old it is—whether it is 200, 100 or new, and whether it is from Georgian England, Lloyd George, or the current era. It is morally wrong to criminalise people for being homeless. It is pointless as well.

I have spent a number of nights over the years raising money for our local homelessness charity, Manna House in Kendal. We do a night sleeping rough in January up at Kendal castle. Some of the people who work with Manna House have slept rough in reality—in many cases for years. As we went through the difficulties of one night out in the open, the casual way they would speak about their experience on the street I found more chilling than the night air. It was not just the poverty, the hardship, the hunger and the cold; it was the sense of shame, the sense of not being fully human. A Crisis poll of people who are street homeless found that 56% felt that laws that criminalise them added to that sense of shame.

People who are in desperate housing need, and are on the street, need more than just a roof over their head—though they need that. They need sustained help in rebuildibng their life. Often there are addiction and other mental health issues that partner their homelessness, and may even have fuelled it. The last thing that they need is to be criminalised. There is no value to society in doing so. All that happens is that they are displaced to somewhere else. Instead, our society should be compelled to do something to meet their needs.

At the beginning of the pandemic, the Government did good work—let us give them credit—in ensuring that the majority of people who are street homeless became not street homeless in a matter of weeks. That showed what we can do if we put our minds to it. However, even considering reinstating the essential principles behind the 1824 Act, through clause 187, is morally wrong in any era. The Government should withdraw the clause immediately.

I, too, rise in disgust at the piece of legislation before us today, and I urge the Government to think again. It is an insult not only to Parliament, which strongly voted to abolish the Vagrancy Act 1824 just this year, but to those incredibly vulnerable people who find themselves on our streets, for whatever reason. It is not for us to judge them; we should provide support and pathways for people out of that situation.

Yesterday at the Dispatch Box, the new Chancellor announced a new era of compassionate Conservatism. Today, we have this legislation before us, which is anything but. It is about othering people—the most vulnerable people in our society. It is about calling them out, and using despicable language to describe them: “vagabonds” and “rogues”. These people are incredibly troubled. Today, language has moved on. We recognise that people who have serious mental health problems or addictions need support. We recognise people who simply do not have the money to survive in our society. That population is growing. There are three people officially registered as on the streets in York, yet when I went out the other morning, there were 23 people sleeping rough.

This is not just about people who are sleeping rough. Many people who are living in hostel accommodation, sofa surfing, and so on find themselves begging on the street. Many people I talk to—and this is where the Government must engage with the community—simply find applying for social security too complicated. They are fed up of being rejected by the complex process of getting access to the public money to which they are entitled. They therefore turn to begging as a mechanism by which to survive, feed themselves and get through the day or night. Many people have multiple challenges pressing down on them, including financial debt and other things that they owe.

To put into legislation once again, having just repealed them, measures that criminalise people who are trying to find their pathway through life—trying to survive—is an abomination. It is completely unacceptable to criminalise those individuals. This measure is not just about civil penalties; it is about the criminalisation of the most vulnerable people. Any compassionate Government would reach out and recognise their duty, and would recognise their blame and responsibility for allowing people to fall into that state. The language used is horrific. It is a horrific piece of legislation. I urge the Government to U-turn on it, and will praise them for it if they do. It is prejudicial and insulting, and it is certainly not beign done in my name, or in the name of my hon. Friends who are signed up to the amendment, which is significant.

Although the Conservative party is desperately trying to rebrand itself, deep down the roots of prejudice seem to continue to exist. If this Government spent time with those vulnerable people across our society, and understood their pathways and stories, they would not write such appalling pieces of legislation. It is not for any of us to judge those individuals, or to place our prejudices on them. It is for us to provide support and pathways out, so that they have the future that we have been afforded, and the opportunities we have had the privilege of having. We need to enable people to have that fresh start, however many attempts it takes. We need restitution and opportunity, not blame and criminalisation of the most vulnerable people in our communities. It is therefore disgraceful to see this measure before us, and I trust that the Minister will withdraw the clause.

The hon. Lady made a very good point when she said that it is for us not to judge, but to provide support and pathways, and the Government are absolutely committed to that. I have already outlined the rough sleeping strategy, which was announced just a few weeks ago.

I want to reassure the Committee that the Government are absolutely committed—we have repeatedly been clear about this—to not criminalising anybody simply for having nowhere to live. The intent of any replacement legislation will not be to criminalise people for being homeless. I want to put that point very firmly on the record.

On our support for rough sleepers, we want to ensure that rough sleeping is ended in a way that is sustainable in the long term. That means preventing people from needing to sleep rough where possible and, where rough sleeping does occur, ensuring that those spells are rare, brief and non-recurring. We recently published our strategy, which is backed by more than £2 billion of funding over the next three years. As part of that, we announced the new £200 million single homelessness accommodation programme, which aims to provide up to 2,400 supported homes for rough sleepers by March 2025, and £500 million to provide 14,000 beds for rough sleepers and 3,000 staff to provide tailored support across England. That support is absolutely crucial in ensuring that those who are homeless can get back on their feet. The support includes helping individuals to find work, manage their finances and access mental and physical health services. We will fully enforce the landmark Homelessness Reduction Act 2017, which we believe is the most ambitious reform to homelessness legislation in decades.

The Minister is asking us to have faith that the Government do not want to criminalise rough sleeping, but is asking us to approve a clause that will allow them to do just that. We are not debating what the Government are doing on rough sleeping; we are debating this legislation.

That is why I made the point about the consultation we are running. We want to make sure that we get this right, which is why we sought views on this issue in a public consultation that closed in May. Analysis of those responses is ongoing and will form the backbone of our response to any new legislation. The measure is a placeholder until we can bring something forward. I recognise that it is not an ideal situation, but that is where we are.

I want to challenge the Minister on that point. If I heard her correctly, I think she said that the intention behind the clause is not to recriminalise homelessness.

Can she explain why subsection (2) allows regulations to include provision to create criminal offences, in similar ways to sections 3 and 4 of the Vagrancy Act 1824, which the House voted to repeal? It effectively will allow for the recriminalisation of homelessness. I think she is wrong on that point, but if she could provide further clarification, I would appreciate it.

As I outlined, this is a placeholder, and we are analysing the consultation responses. The commitment I have given is that no criminalisation will result from the fact that someone is homeless. I want to put that point on the record incredibly strongly.

I cannot pre-empt the outcome of the consultation, but I have spoken to the Minister with responsibility for rough sleeping, who has committed to writing to Committee members to outline the next steps. As I say, this issue does not usually sit within my brief, but we are limited by the number of Ministers we can have in Committee today. Hopefully, that Minister will be able to provide additional reassurance.

This measure was not brought forward in the Police, Crime, Sentencing and Courts Bill, so we have had a period in which the Government have not had the opportunity to criminalise people for being homeless or begging on our streets. Nothing has changed since Parliament as a whole gave the Government a clear indication that it wanted to see off a 200-year-old piece of legislation, yet today, Government are trying to resurrect the opportunity to criminalise people.

The Minister says that there is no need for the measure, but it is hardwired into the legislation. It is the text of the statute, not what the Minister says, that decides what the Government have the capacity to do. The clause is completely unnecessary, yet the Government push it before us. Will the Minister explain the context of having such measures written into the Bill? We have not had them for the past six months; indeed, she says, while still analysing her consultation, that we will not need them moving forward. The measure is seen as a draconian move, and should be taken out of law.

I genuinely thank the hon. Member for her passion on this issue, which is prevalent in the City of York, and she has campaigned on it well and strongly in recent years. The best thing that I can do is ask the Minister with responsibility for homelessness to write to her directly. Indeed, he has committed to writing to all Committee members to set out the next step. I hope that he can provide some reassurance. However, at this stage, I ask that the clause remain part of the Bill.

Question put and agreed to.

Clause 187 accordingly ordered to stand part of the Bill.

Clause 188

Data protection

Question proposed, That the clause stand part of the Bill.

The clause stipulates that any duty or power in the Bill, or provision made under the Bill, to disclose or use information must be in accordance with data protection legislation. This is subject to an exception, which I will come to, that provides for “data protection legislation” to be interpreted in line with the definition in section 3 of the Data Protection Act 2018. This is a standard provision to make it clear that relevant provisions in the Bill are subject to data protection legislation. As was discussed in the debate on the planning data clauses, the Government are clear that nothing in the Bill should jeopardise the proper protection of data.

Hon. Members will note the exception from the clause: they will immediately recall that clause 77, which is part of our digital powers, will enable the open publication of prescribed planning information to anyone for free. Clause 77(2) ensures that planning authorities cannot publish planning data that is otherwise restricted in law, including under the DPA. The exclusion in clause 188 preserves that position. There is therefore no intention to allow our digital powers to operate outside the framework of data protection legislation.

Clause 189 provides that the Bill will bind the Crown, except where it amends legislation that does not bind the Crown. There are two exceptions to that: part 8 does not apply to the Crown in relation to land that is Crown land for the purposes of part 13 of the Town and Country Planning Act 1990; and part 9 does not apply in relation to land belonging to His Majesty in right of his private estates.

Clause 190 is a technical provision that sets out the abbreviations used throughout the Bill in order to ensure that the abbreviations used are clear and consistent. Finally, clause 191 provides a power to make consequential provision, which includes the power to amend primary legislation to ensure that the statute book remains coherent and legally operative as a result of the provisions made in or under the Bill through regulations. It confers no power to make policy changes.

Question put and agreed to.

Clause 188 accordingly ordered to stand part of the Bill.

Clauses 189 to 191 ordered to stand part of the Bill.

Clause 192

Regulations

I beg to move amendment 77, in clause 192, page 195, line 7, at end insert “(fa) under Part 8;”.

This amendment corrects a drafting omission by applying the negative procedure to regulations under Part 8 (unless they amend primary legislation, in which case the affirmative procedure will apply under the existing drafting of the clause).

The amendment relates to the high streets rental auctions measures in part 8 of the Bill and seeks to correct a drafting omission. Clause 192 prescribes the parliamentary process applicable to the regulation-making powers of the Secretary of State. Under the existing drafting, the affirmative procedure applies to regulations made under clause 176, or where they amend primary legislation, which is the case for regulations made under clauses 152 and 160.

Clause 192 does not, however, specify that regulations made under other clauses in part 8 are subject to the negative resolution procedure, which is the drafting omission. That includes regulations made under clause 162 making provision about the rental auction process, and regulations made under clause 164 making provision for the terms of the contract for tenancy. That is the position set out in the delegated powers memorandum for the Bill, but it was not reflected in the Bill’s drafting. Government amendment 77 corrects that omission, and I commend it to the Committee.

Amendment 77 agreed to.

Question proposed, That the clause, as amended, stand part of the Bill.

This series of clauses covers a number of technical matters in the Bill. Hon. Members will have noted the number of delegated powers taken by the Bill. Clause 192 deals in particular with the parliamentary procedure to be followed in making certain of those regulations. It also allows those regulations, for example, to deal with incidental or transitional matters arising from them. It is a standard provision found in legislation, and allows us to protect against unintended disruption of the legal position.

The Committee has already debated specific delegated powers in the substantive clauses. My predecessors and colleagues have already committed to consulting on various regulations to be made under powers in the Bill. That will ensure that the public and sector stakeholders are brought into the detailed design of the new policies that the Bill will introduce. The delegated powers memorandum published alongside the Bill sets out the Government’s view on the necessity of the powers, and the approach to scrutiny as a result.

Clause 193 authorises the spending of money for the purposes of this Bill. It is a standard provision included in Bills that incur costs on the public purse. Hon. Members will note that clause 194 sets out the territorial extent of the provisions in the Bill and whether each part of the Bill extends to England and Wales, Scotland and Northern Ireland. The devolution position has been debated in relation to each part during the discussion of that part. As a consequence, I commend the clauses to the Committee.

Question put and agreed to.

Clause 192, as amended, accordingly ordered to stand part of the Bill.

Clauses 193 and 194 ordered to stand part of the Bill.

Clause 195

Commencement and transitional provision

I beg to move amendment 197, in clause 195, page 197, line 1, after “sections 107” insert

“, (Power to shorten deadline for examination of development consent order applications)”.

This amendment provides that the clause inserted by NC60 will come into force two months after the Bill is given Royal Assent.

With this it will be convenient to discuss Government new clause 60—Power to shorten deadline for examination of development consent order applications.

The Government and the country need to ensure that world-class sustainable infrastructure can be consented to, vitally, in a manner that can support our ambitions for economic growth. To achieve that, we must have a robust planning system that is able to accelerate infrastructure delivery and to meet the forecast demands and complexity of projects coming forward in order to attract strong investment in infrastructure. Through these changes, the planning system can continue to lead in its approach to supporting the delivery of nationally significant infrastructure, which incentivises investment and makes it quicker to deliver that infrastructure.

The Government have an ambition in the national infrastructure strategy for some development consent applications entering the system from September next year to go through the process up to 50% faster from the start of pre-application to decision, but to achieve that a national infrastructure planning reform programme was established to refresh how the nationally significant infrastructure project works and to make it more effective and deliver better and faster outcomes. New clause 60, as a consequence, will amend the part of the existing NSIP process that concerns the examination of a development consent order application. Under existing legislation, the relevant Secretary of State can set an extended deadline for the examination of an application for development consent, but there is no corresponding legislative power to enable the same Secretary of State to set a shorter deadline for such an examination.

Our measure will rectify that, providing the means for the Secretary of State to set a shorter examination period for projects that meet quality standards as part of wider NSIP reform and the fast-track consenting route that we plan to put in place, as set out in the energy security strategy. The mechanisms and criteria that could trigger the exercise of that power by the Secretary of State will be set out in supporting guidance and we will commit to consulting on that in due course. I commend these measures to the Committee.

We have serious concerns about the potential implications of Government new clause 60, which, as the Minister has made clear, will provide the Secretary of State with the power to impose a shorter statutory timeframe for the examination stage of some NSIP applications.

In the policy note entitled “Improving performance of the NSIP planning process and supporting local authorities”, which was published in August to accompany the tabling of the Government new clause, the rationale cited for its introduction is specifically the need significantly to reduce the time it takes to gain consent for offshore wind projects in order to realise the commitment set out in the British energy security strategy. That objective is entirely laudable, but while we support efforts to improve the overall performance of the DCO system—a reform, after all, introduced by the last Labour Government to expedite decisions on large-scale infrastructure projects—the Government have not provided any convincing evidence that the length of the DCO examination stage is the reason why project consents can take too long to secure.

As the Minister will know, the DCO system already specifies a fixed timeframe of nine months for the planning inspectorate to make a final decision, with only six of those months being allocated to the examination stage. The Minister might have some convincing evidence that he can share with the Committee to explain why the six-month examination process is the reason why the Government believe that offshore wind projects are taking up to four years to gain consent, but we are not aware of any such evidence that has been published.

Allowing an appropriate time for a DCO examination is important not only because that enables inspectors to gather and analyse all the available evidence and the social and environmental impacts of projects properly to be interrogated, but because it is the part of the statutory process in which communities have a say over developments that are often likely to have a significant impact on their lives. If the Government want to hand themselves the power to curtail the timeframe in which that important part of the DCO process takes place, we feel strongly that they need to bring forward the evidence to justify such a measure, and they have not done so yet.

However, beyond that in-principle concern over reducing the time available for the public to engage with a detailed process, there is a further reason why we are concerned about the possible implications of the Government new clause, which is that its scope is not limited simply to offshore wind projects. Instead, the powers provided to the Secretary of State by the measure will seemingly apply to all DCO applications and any large-scale infrastructure project that meets as-yet-to-be-specified qualifying criteria.

To take a topical example, the powers could be applied to schemes for hydraulically fractured shale gas production, which I know is of deep concern to the new housing Minister and other Government Members. With the Government having abandoned their manifesto commitment by signalling the end of the fracking moratorium and with UK onshore oil and gas already gearing up to convince Ministers to designate fracking projects as nationally significant, the obvious concern about Government new clause 60 is that the Government will use it to facilitate fracking applications with only the most limited opportunity for local communities to have their say on them. That concern is made more acute by the fact that Ministers have so far failed to provide any detail on precisely how it will be determined that local consent for fracking schemes exists.

Given the serious nature of those concerns, I would be grateful if the Minister answered the following questions. First, what evidence do the Government have that the examination phase of the DCO process is unduly holding up consent for offshore wind and other large-scale renewable energy projects? Secondly, given that the new clause allows the Secretary of State to set an unspecified date for a deadline below the current six-month timeframe for DCO examinations, can the Minister give us a sense of how much shorter the Government believe the examination stage should be under the proposed fast-tracked DCO application process? Thirdly, when will the Government tell us what the qualifying criteria will be for large-scale infrastructure projects subject to shorter examination stage timeframes via this route? Lastly, do the Government intend to designate schemes for hydraulically fractured shale gas production as “nationally significant” and bring them within the purview of this new fast-tracked DCO process—yes or no? I look forward to hearing from the Minister and to returning no doubt to this matter as we consider the Bill further.

I am grateful to the hon. Gentleman for his questions. Again, they are entirely reasonable and I will answer as many of them as I can. We recognise that this is a change to the approach, but it is a change that comes directly from a recognition, which I hope we all share, that where there is a desire to move quicker on important infrastructure for this country that we are able to do that. We have an in-principle ability to extend this process, which has been in place for a number of years, and—although I do not know the history—presumably ever since the Labour party started this process a number of years ago, as the hon. Gentleman indicated. Given that, it is not necessarily conceptually problematic that we have the ability to vary that in the other direction, while accepting the understandable challenge of ensuring that there are appropriate reassurances within the process that mean that it will be used in a reasonable and proportionate manner.

While I understand the hon. Gentleman’s point about the evidence base and working through all the detail and ensuring that it is reasonable and proportionate, we are trying to establish the principle that while there is already an ability to vary this timeline in one direction, we can also vary it in another direction. In that narrow sense of what we are trying to achieve, that is a reasonable thing to do. I will try to answer the hon. Gentleman’s questions as directly as I can. On evidence, I am happy to have a further discussion with him—either verbally or in writing, whatever his preference—going through why the Government think this is reasonable and proportionate. This is all part of a broader attempt to improve this in aggregate, and I hope that the Opposition will accept that pulling multiple levers to try to secure incremental improvements in all parts of the process is a laudable aim to pursue.

On the hon. Gentleman’s specific questions on the length of time the stage should take and the qualifying criteria, that can be dealt with in guidance. I will ensure that the officials have heard his concerns and I hope we can deal with them at the guidance stage. In addition, because we have given a commitment to consult, there will be an opportunity for that. We have an interest in providing that information in the detail that is sought, so that the Government can consider it in appropriate detail as well.

Finally, on fracking, I have strong views on hydraulic shale gas and hydraulic fracturing, which I have put on the record many times in this place, and I will continue to share those views. At the same time, and I hope the hon. Gentleman accepts that there are times and places to debate policies like this one, I am no longer a Minister in the Department for Business, Energy and Industrial Strategy. I am sure that there will be regular opportunities to develop this matter, but my own position is known and understood. On his specific question, hydraulic fracturing is not within the NSIP process. There was a consultation in 2018-19 in which the Government decided not to put it in the NSIP process at the time. Should that change, I would be happy to debate with him at the appropriate moment.

Amendment 197 agreed to.

I beg to move amendment 198, in clause 195, page 197, line 1, after “sections 107” insert—

“, (Additional powers in relation to non-material changes to development consent orders)”

This amendment provides that the clause in NC61 will come into force two months after the Bill is given Royal Assent.

With this it will be convenient to discuss Government new clause 61—Additional powers in relation to non-material changes to development consent orders.

A key benefit of the NSIP regime in the Planning Act 2008 is that it puts forward statutory timeframes for consideration and determination of applications concerning NSIPs, thereby providing a degree of certainty to developers and others in order to ensure a timely outcome, as we discussed in the previous debate. The outcome of a successful application is the granting of a DCO. Subsequent changes to a scheme after a DCO is granted—regardless of whether they are material or non-material changes—require consent from the relevant Secretary of State. Although there are statutory timeframes in place for the consideration and determination of DCO applications for material change, there are none currently for non-material change.

Unlike the previous amendment, which was designed to provide greater clarity in another part of the NSIP regime, we are seeking here to ensure that there is greater clarity around non-material amendments. Feedback from stakeholders has highlighted that there is an inconsistency here and a desire to rectify this and to provide certainty of outcome in respect of non-material change applications, just as there is for material change.

Consequently, amendment 198 and new clause 61 will enable the Secretary of State to introduce regulations that relate to the decision-making process associated with non-material change applications, which will allow for the introduction of time limits in respect of non-material applications, together with the ability to extend the timescales if necessary, among other things. Alongside this, we are exploring non-legislative reforms to support the non-material change process, to see how these can achieve a reduced timescale prior to the introduction of any statutory timeframe. I commend the amendment and the new clause to the Committee.

Amendment 198 agreed to.

Question proposed, That the clause, as amended, stand part of the Bill.

This group contains the two final clauses in the Bill. Clause 195 governs the commencement or coming into force of the various provisions. It enables certain provisions to commence immediately on the Bill gaining Royal Assent—for example, some devolution measures, notably clause 42, which allows proposals to establish combined county authorities to be made. That will facilitate proposals coming into effect as rapidly as possible. Other provisions commence two months after Royal Assent—for example, the levelling-up missions in part 1. The remaining provisions will come into effect on a day appointed by regulations. In all cases, clause 195 provides additional powers to make such transitional, transitory or saving provision as appropriate in connection with the coming into force of any provision in the Bill. The final clause, clause 196, contains the short title for the Bill. I commend both clauses to the Committee.

Question put and agreed to.

Clause 195, as amended, accordingly ordered to stand part of the Bill.

Clause 196 ordered to stand part of the Bill.

New Clause 60

Power to shorten deadline for examination of development consent order applications

“(1) Section 98 of the Planning Act 2008 (timetable for examining, and reporting on, application for development consent order) is amended as follows.

(2) After subsection (4) insert—

‘(4A) The Secretary of State may set a date for a deadline under subsection (1) that is earlier than the date for the time being set.’

(3) In subsection (6), after ‘subsection (4)’ insert ‘or (4A)’.”—(Lee Rowley.)

This new clause allows the Secretary of State to set a shorter deadline for the examination of applications for development consent orders and makes related provision. The new clause will be inserted after clause 110.

Brought up, read the First and Second time, and added to the Bill.

New Clause 61

Additional powers in relation to non-material changes to development consent orders

“In paragraph 2 of Schedule 6 to the Planning Act 2008 (non-material changes), after sub-paragraph (1) insert—

‘(1A) The Secretary of State may by regulations make provision about—

(a) the decision-making process in relation to the exercise of the power conferred by sub-paragraph (1);

(b) the making of the decision as to whether to exercise that power;

(c) the effect of a decision to exercise that power.

This is subject to sub-paragraph (2).

(1B) The power to make regulations under sub-paragraph (1A) includes power to allow a person to exercise a discretion.’”—(Lee Rowley.)

This new clause gives the Secretary of State the power to make provision about the decision-making process for non-material changes to development consent orders (for example, by setting time limits for making decisions). The new clause will be inserted after clause 110.

Brought up, read the First and Second time, and added to the Bill.

New Clause 62

Prospects of planning permission for alternative development

“(1) The Land Compensation Act 1961 is amended as follows.

(2) In section 14 (taking account of actual or prospective planning permission in valuing land)—

(a) in subsection (2), for paragraph (b) substitute—

‘(b) of the prospect of planning permission being granted on or after that date for development, whether on the relevant land or other land, other than development for which planning permission is in force at the relevant valuation date.’;

(b) for subsections (3) and (4) substitute—

‘(2A) If a description of development is certified under section 17 as appropriate alternative development in relation to the relevant land (or any part of it), it is to be taken as certain for the purposes of subsection (2)(b) that—

(a) planning permission for development of that description would be (or would have been) granted on the relevant valuation date, and

(b) the permission would be (or would have been) granted in accordance with any indication given under section 17(5B).

(2B) In relation to any other development, the prospects of planning permission are to be assessed for the purposes of subsection (2)(b)—

(a) on the assumptions set out in subsection (5), and

(b) otherwise, in the circumstances known to the market at the relevant valuation date.’;

(c) in subsection (5), in the words before paragraph (a), for ‘subsections (2)(b) and (4)(b)’ substitute ‘subsection (2B)(a) (and in section 17(1B)(a))’;

(d) in subsection (9), in the words before paragraph (a), for the words from ‘to’ to ‘15(1)(b)’ substitute ‘in subsection (2) to planning permission that is in force’.

(3) In section 17 (certification of appropriate alternative development)—

(a) in subsection (1), for the words from ‘containing’ to the end substitute ‘stating that a certain description of development is appropriate alternative development in relation to the acquisition’;

(b) after subsection (1) insert—

‘(1A) Development is “appropriate alternative development” for this purpose if it is development—

(a) on the land in which the interest referred to in subsection (1) subsists (whether alone or together with other land),

(b) for which planning permission is not in force at the relevant planning date, and

(c) in respect of which the following test is met.

(1B) The test is whether, had an application for planning permission for the development been determined on the relevant planning date, the local planning authority would have been more likely than not to grant the permission—

(a) on the assumptions set out in section 14(5),

(b) on the assumption that it would act lawfully, and

(c) otherwise, in the circumstances known to the market at the relevant planning date.

(1C) For the purposes of subsections (1A) and (1B), the “relevant planning date” is—

(a) the relevant valuation date, or

(b) if earlier, the date on which the application under this section is determined.’;

(c) in subsection (3), for paragraphs (a) and (b) substitute—

‘(ba) must set out the applicant’s reasons for considering that the description of development given in the application is appropriate alternative development, and’;

(d) for subsections (5) to (8) substitute—

‘(5A) The local planning authority may issue a certificate under this section in respect of—

(a) the description of development given in the application for the certificate, or

(b) a description of development less extensive than, but otherwise falling within, the description given in the application.

(5B) A certificate under this section must give a general indication of—

(a) any conditions to which planning permission for the development would have been subject, and

(b) any pre-condition for granting the permission (for example, entry into an obligation) that would have had to be met.

(5C) The test to be applied for the purposes of subsection (5B) is whether the local planning authority would have been more likely than not to impose such conditions, or insist on such a pre-condition, on the assumptions, and otherwise in the circumstances, referred to in subsection (1B).’

(e) in subsection (10)—

(i) for ‘there must be taken into account any expenses reasonably’ substitute ‘no account is to be taken of any expenses’;

(ii) omit the words from ‘where’ to ‘favour’.

(4) In section 18 (appeals to Upper Tribunal)—

(a) in subsection (2)—

(i) after paragraph (a) (but before the ‘and’ at the end) insert—

‘(aa) must consider those matters as if, in subsections (1B) and (5C), the references to the local planning authority were references to a reasonable planning authority,’

(ii) in paragraph (b), after sub-paragraph (ii) insert—

‘(iia) cancel it, or’;

(b) after subsection (2) insert—

‘(2A) Where the local planning authority have rejected an application for a certificate under section 17, the person who applied for the certificate may appeal to the Upper Tribunal against the rejection.

(2B) On an appeal under subsection (2A)—

(a) paragraphs (a) and (aa) of subsection (2) apply as on an appeal under subsection (1), and,

(b) the Upper Tribunal must—

(i) confirm the rejection, or

(ii) issue a certificate,

as the Upper Tribunal may consider appropriate.’;

(c) in subsection (3), for the words from ‘the preceding’ to the end substitute ‘subsection (2A) applies as if the local planning authority have rejected the application’;

(d) after subsection (3) insert—

‘(4) The references in sections 14(2A) and 17(5A) and (5B) to a certificate under section 17 include a certificate issued, or as varied, by the Upper Tribunal under this section.’

(5) In section 19 (applications by surveyors)—

(a) in subsection (3), for ‘paragraphs (a) and (b)’ substitute ‘paragraph (ba)’;

(b) after that subsection insert—

‘(4) In the application of section 18 by virtue of subsection (1)—

(a) subsection (1)(a) of that section is to be read as if it included the surveyor, and

(b) subsection (2A) of that section is to be read as if the reference to the person who applied for the certificate included the person entitled to the interest.’

(6) In section 20(a) (power to prescribe time limit for issuing certificate under section 17), for the words from ‘time’ to the end substitute ‘period within which an application under that section is to be determined’.

(7) In section 22 (interpretation of Part 3), after subsection (2) insert—

‘(2A) The completion of the acquisition or purchase referred to in the applicable paragraph of subsection (2) does not affect the continued application of that subsection.’”—(Lee Rowley.)

This new clause (to be inserted after clause 149) changes how prospects of planning permission are taken into account when assessing land value for purposes of compulsory purchase compensation. Planning permission will be taken for granted only if the planning authority certifies that it would have granted it, and such certificates will be reduced in scope.

Brought up, read the First and Second time, and added to the Bill.

New Clause 1

Independent body to monitor levelling up missions

“(1) The Secretary of State must assign an independent body to assess the Government’s progress on levelling-up missions and make recommendations for improvements to delivery of them.

(2) The body must prepare parallel independent reports for each period to which a report under section 2 applies.

(3) Each parallel independent report must—

(a) assess the progress that has been made in the relevant period in delivering each of the levelling-up missions in the current statement levelling-up missions, as it has effect at the end of the period, and

(b) make recommendations for what the Government should do to deliver each levelling-up mission in the following period.

(4) The Secretary of State must lay each report under this section before Parliament on the same day as the report under section 2 which applies to the relevant period.”—(Alex Norris.)

This new clause would require the Secretary of State to establish an independent body that can provide reports on the Government’s progress on levelling-up missions and outline recommendations for their future delivery.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

Ordered, That further consideration be now adjourned. —(Nigel Huddleston.)

Adjourned till this day at Two o'clock.

National Security Bill (Thirteenth sitting)

The Committee consisted of the following Members:

Chairs: Rushanara Ali, † James Gray

† Bailey, Shaun (West Bromwich West) (Con)

† Bell, Aaron (Newcastle-under-Lyme) (Con)

† Dines, Miss Sarah (Lord Commissioner of His Majesty's Treasury)

† Eagle, Maria (Garston and Halewood) (Lab)

† Elmore, Chris (Ogmore) (Lab)

† Everitt, Ben (Milton Keynes North) (Con)

† Hart, Sally-Ann (Hastings and Rye) (Con)

† Higginbotham, Antony (Burnley) (Con)

† Hosie, Stewart (Dundee East) (SNP)

† Jones, Mr Kevan (North Durham) (Lab)

† Jupp, Simon (East Devon) (Con)

† Lynch, Holly (Halifax) (Lab)

† McDonald, Stuart C. (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)

† Mumby-Croft, Holly (Scunthorpe) (Con)

† Phillips, Jess (Birmingham, Yardley) (Lab)

† Sambrook, Gary (Birmingham, Northfield) (Con)

† Tugendhat, Tom (Minister for Security)

Huw Yardley, Bradley Albrow, Simon Armitage, Committee Clerks

† attended the Committee

Public Bill Committee

Tuesday 18 October 2022

(Morning)

[James Gray in the Chair]

National Security Bill

Welcome back to the consideration of the National Security Bill.

Ordered,

That the order of the Committee of 7 July be varied as follows—

1. In paragraph (1)(g), leave out “13 September” and insert “18 October”.

2. In paragraph (4), leave out “13 September” and insert “18 October”.—(Tom Tugendhat.)

On a point of order, Mr Gray. I welcome everyone back; it is very nice to see them. My point of order concerns the explanatory notes on foreign agent registration. It is customary that we have such notes at least before the Committee meets, but there do not appear to be any explanatory notes or a detailed impact assessment. I know some people think that Committees are just tick-box exercises, but they are not; we are allowed to scrutinise the Bill. Given that the foreign agent registration scheme has had a gestation period longer than that of an African elephant, there should have been time at least to make some explanatory notes.

I am most grateful to the right hon. Gentleman for giving notice of his points of order—neither of those matters is a point of order. They are points of information, which the Minister will no doubt have heard, and will doubtless wish to act on during the course of the day. They are not matters for the Chair.

Yes, it is definitely different. Mr Gray, you will remember that, when we were discussing clause 23, a commitment was given by this Minister or the last Minister—whoever it was. The Minister could not give the Committee details about why the agencies needed clause 23 because of the secret nature of that, and a commitment was given that the Intelligence and Security Committee would be given examples of why the clause was needed.

I am told that the examples were received late last week, yet a date has not been set for me to be briefed formally by the agencies. The reason being put around for that, I am told, is that the Chair of the ISC has made it difficult. I put on the record that that is not the case. We received them only last week, and I, and other members of this Committee who are not members of the ISC, have not yet been in a position to read those examples. If someone gives commitments, it is not good enough to have such delays.

Although that is an important matter for the ISC and for this Committee, it is not a point of order. The Minister and others, however, will have heard the right hon. Gentleman’s point, and will no doubt take it into consideration in the future.

New Clause 8

Disclosure orders

“Schedule (Disclosure orders) makes provision for disclosure orders.”—(Tom Tugendhat.)

This new clause introduces the new Schedule inserted by NS1.

Brought up, and read the First time.

With this it will be convenient to discuss Government new schedule 1—Disclosure orders.

Thank you very much for chairing this sitting, Mr Gray. It is a pleasure to be here under your chairmanship, and a great pleasure to introduce new clause 8 and new schedule 1, which introduce a suite of measures to allow law enforcement officers to apply to the courts for orders to gather information that will assist investigations into foreign power threat activity. As with the other police powers in the Bill, the Government have carefully considered relevant existing legislation, and looked to emulate it where it has proven effective in investigating other serious crimes. I will first speak more broadly about the need for the measures as a whole, before turning specifically to disclosure orders.

Most modern investigations include lines of inquiry into finances and other property, sometimes as a starting point and sometimes to enhance other leads. Financial investigations are often critical in developing evidence that is used in criminal proceedings where there is a financial element, by identifying and tracing criminal assets and uncovering the extent of criminal networks. Financial investigation has become increasingly important in criminal investigations in recent years.

In his recent letter to the Committee, the national lead for counter-terrorism policing, Matt Jukes, stated that it can be difficult for his officers to conduct effective investigations into state threats with the current powers and tools available, and that police would greatly benefit from the inclusion of financial investigative measures. The police have stated that these lines of inquiry are particularly important in state threats cases, where actors may be motivated by financial gain but also where they deploy sophisticated forms of tradecraft, meaning that their criminal conduct is even more difficult to uncover, disrupt and evidence than for other crimes. In many cases, financial and property investigations form an important part of establishing the link between the activity and the foreign power, particularly regarding investigations into obtaining material benefits from a foreign intelligence service.

Investigations into property and finances can take place in relation to any form of criminality, but Parliament has already recognised, in both terrorism legislation and the Proceeds of Crime Act 2002, that there are certain circumstances where it is appropriate for investigators to have access to broader investigatory powers. The Committee has also recognised, in particular during our debates on schedules 2 and 3, that state threats investigations are an area where it is appropriate for investigators to have access to enhanced powers. The addition of these new financial and property investigation powers in relation to foreign power threat activity will ensure that law enforcement has the tools it needs to effectively conduct state threats investigations, prevent and mitigate harmful activity and bring those responsible to justice.

The Committee will note that these new powers are available to National Crime Agency officers, reflecting the Government’s intention, as set out in the integrated review of defence and security, to ensure that the NCA has the capabilities that it needs and to pursue greater integration where there is an overlap between serious organised crime, terrorism and state threats.

I want to take this opportunity to inform the Committee that as we have finalised these provisions, we have identified other areas in the Bill where the drafting needs to be tailored to ensure that it is consistent regarding the availability of the powers to the NCA. These small amendments will be addressed on Report.

Turning to disclosure orders, as we have discussed in Committee, schedule 2 provides for a number of powers that law enforcement can use to obtain information in state threats investigations. Law enforcement investigators require disclosure orders for state threats investigations in order to access non-excluded material by compelling individuals or organisations to provide information to investigators. It is important to note that disclosure orders cannot compel someone to answer any question or provide information that is legally privileged, or to produce excluded material. Excluded material is defined under the Police and Criminal Evidence Act 1984 and includes personal records relating to physical or mental health obtained in the course of a trade or profession, human tissue held in confidence and taken for the purposes of diagnosis or medical treatment, and journalistic material held in confidence. If excluded material were required by investigators, a production order under schedule 2 would be required.

Much of the information that investigators seek under a disclosure order may be considered confidential in nature, such as payment details, but is not classed as excluded material. That may be required because the police have previously approached an organisation to ask for the non-excluded material to be provided, but the organisation has refused because it does not consider that it should disclose the information in the absence of a clear power of compulsion. It may be because the police are conducting a complex investigation involving several organisations that could require multiple requests for information over time. In such a scenario, which is likely to occur in state threats investigations, the police require a streamlined process whereby one order is available to cover separate requests for information from multiple organisations without creating an undue administrative burden on law enforcement, the courts or those who might receive such requests.

In the absence of a disclosure order, a schedule 2 production order, if applicable, would need to be made for every request for information, requiring a large amount of police resource as well as court time. Disclosure orders streamline this process and reduce the numbers of orders needed for requests for non-excluded material during an investigation. For example, if the police were conducting a state threats investigation into an individual and needed to access information from several airline companies regarding the suspect, the company may be willing to provide only basic customer information, such as the full name, without a formal court requirement. If the police required access to the suspect’s payment information used for a plane journey that is suspected of being related to state threat activity, the company may refuse to provide that information, even if investigators provided the company with reassurance that providing this information was in the interests of the prevention of crime. Executing a warrant on the company may be possible, but may not be an appropriate course of action by the police. In some cases, a production order under schedule 2 might be available, but that will not always be the case. Disclosure orders will provide a more proportionate and appropriate way of providing investigators with the information required.

In another example, the police may suspect that a person is purchasing a specialist piece of computer equipment to use in the commission of a state threats offence. The police suspect that the equipment has been purchased from one of a small number of possible companies. In that case, a single disclosure order could be sought, enabling the police to seek information from the companies in question, instead of the police needing to seek multiple production orders.

We recognise that these orders could enable the police to give a notice to a wide range of organisations. As such, senior authorisation is required within law enforcement before an application can be made to the courts. In addition to the requirement for senior authorisation, a disclosure can be made only in relation to an investigation into the identification of state threats property, which is defined as money or other property that could be used for the commission of foreign power threat activity, or the proceeds from such activity. This restriction to investigations into relevant property reflects the scope of the equivalent powers in terrorism and proceeds of crime legislation.

Furthermore, the judge must be satisfied that there are reasonable grounds for believing the information being sought would be of substantial value to the investigation, and for believing that it is in the public interest for the information to be provided, having regard to the benefit of the investigation. Disclosure orders provide for an effective and flexible means of obtaining information in a state threats investigation. Sitting alongside the powers of schedule 2, they would ensure that investigators have efficient and effective access to the information that they need to conduct their inquiries.

It is always a pleasure to serve under your chairmanship, Mr Gray. I also welcome hon. Members back to the final day of the Committee. We welcome new schedules 1, 2 and 3, and hope that they will reflect the complex and evolving nature of state threats, and the significant technical and financial resources that provide the capability for sustained hostile activity.

For too long, our police and security services have had to use blunted tools in this regard, not designed to address adequately the challenges posed by modern day espionage. We are grateful to Counter Terrorism Policing for submitting written evidence to the Committee, and making its support for the new schedules 1, 2 and 3 very clear. Frankly, the Met provided far more in its written evidence on the rationale of these provisions than the explanatory notes accompanying the new schedules from the Government—a point made by my right hon. Friend the Member for North Durham.

The fairly non-existent explanatory notes are a constant challenge from this part of the Bill onwards, affecting later amendments, which is disappointing for all hon. Members trying to follow the detail closely. As the Minister said, Assistant Commissioner Matt Jukes said in his written evidence to the Committee:

“We have requested financial investigation powers to support our investigations in this space. To this end we have articulated a clear requirement to emulate various investigatory powers within the Terrorism Act which centre on financial investigations as well as examination of material which can be used for investigatory purposes. We are assured that these will be introduced by way of a forthcoming amendment. If so, this will further ensure that we have the tools required to successfully investigate and disrupt state threat activity.”

We welcome the new schedules, and now that the long overdue Economic Crime and Corporate Transparency Bill has been published, no doubt the new schedules are intended to work alongside some of the part 5 provisions in that legislation. Currently, terrorism disclosure orders can be made under schedule 5A of the Terrorism Act 2000. Counter Terrorism Policing has called for an explicit disclosure order for state threats, stating that it will help investigators benefit from a streamlined process, whereby one order is available to cover separate requests for information from multiple organisations, without the need to return to court. I want to push the Minister on oversight. I have made the case for an independent reviewer of all the new measures in the Bill. As those will be investigatory powers, will the Minister confirm that the investigatory powers commissioner will have responsibility for overseeing their use?

Turning to paragraphs 7 and 17 of new schedule 1, paragraph 7 outlines offences in relation to disclosure orders. Sub-paragraph (3) states that a person commits an offence if

“in purported compliance with a requirement imposed under a disclosure order, the person—

(a) makes a statement which the person knows to be false or misleading in a material particular, or

(b) recklessly makes a statement which is false or misleading in a material particular.”

By comparison, paragraph 17(1) states that a

“statement made by a person in response to a requirement imposed under a disclosure order may not be used in evidence against that person in criminal proceedings.”

I cannot quite square that off. I am keen to better understand why the information provided by a person under a disclosure order could not be used as evidence in criminal proceedings.

Before concluding, as I have said before, I accept that it is standard to refer to a police officer as “constable” in legislation, despite the fact that in doing so we are referring to police officers of any rank, not the rank of constable, which seems problematic. New schedule 1 is a prime example of where it gets messy. Paragraph 1(5) says that an appropriate officer for the purposes of these powers is either a constable or a National Crime Agency officer. It is not until paragraph 2(10) that the provision states that an appropriate officer must be a senior officer or authorised by a senior officer. Not until paragraph 9(4) does it confirm that “senior officer” must be a superintendent or above. Would it not be clearer to be explicit about the stipulated rank required to exercise certain powers at the earliest opportunity, instead of allowing for the ambiguity of the word “constable”? The last thing any of us want is for any ambiguity to be exploited by defence lawyers in the courts.

It is a pleasure to serve under your chairmanship, Mr Gray. My apologies for missing the previous Committee sitting. I can now welcome the Minister to his place at this very interesting and challenging time. I do not doubt that we wish him well. We have a tricky job in Committee today. We are looking at fairly substantial new schedules and new clauses for the first time. It would be helpful to hear what the Minister has to say about them. On the whole, we are supportive of most of what we will be discussing today, but we will have to take away what the Minister says and consider it further. Ultimately, we reserve our position until the Bill reaches its final stages in the House of Commons.

The Minister has outlined a number of case studies and scenarios to illustrate how this new clause and new schedule would work. More of that information would be really helpful to understand what the Government are getting at. With that proviso in mind, we would say that new schedule 1 seems to provide the necessary powers to investigate foreign threat activity. The Minister referenced the fact that this was based on other provisions, which is interesting to know, but I two have two or three questions about precisely what statute and provisions these measures are modelled on. Some of them seem fairly unusual, so it would be useful to know where else they can be found in order to analyse how they work there.

The Minister provided some examples of how the new clause and schedule would work. The first question is how is it to be decided that property is

“likely to be used for the purposes of foreign power threat activity”

or proceeds of that? Is that essential analysis to be based on the nature of the property, or is more required, such as intelligence about who may have had ownership or possession or some other link to it? Again, the illustrations which the Minister gave during his introductory speech may answer that question. I will have to go away and have a think about that, but the more illustrations we can have, the better. Otherwise, his scheme seems pretty reasonable.

I have a couple of questions about some of the supplementary provisions. Is there not an issue with being able to ask questions that could lead to self-incriminating answers? I think the shadow Minister almost had the opposite concern from me. She asked why that would be protected from use in a criminal trial. My question is about whether the safeguard goes far enough. The Government are basically saying that someone can be asked a question that may lead to a self-incriminating answer. There are protections elsewhere in paragraphs 8 and 17 of the new schedule about the non-use of those statements, but is this formulation used in other legislation? It would be useful to have a specific reference to a provision in another Act of Parliament.

In a similar vein, what is the thinking around ensuring that disclosure orders have effect, despite restrictions in another enactment? That seems a very broad provision. Again, is that found elsewhere in another piece of legislation? What other Acts of Parliament are going to be impacted or undermined by this? Finally, part 2 includes the provisions in relation to Scotland and how these would be put into practice. I wanted to check that there has been consultation with the Scottish Government. The broad thrust of new schedule 1 seems fine, but there are one or two questions for the Minister.

I have a minor point to raise with the Minister in respect of part of the supplementary provision in new schedule 2, which the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East has referred to, about disclosure orders—

Order. I am sorry to interrupt you, but we are discussing new schedule 1 rather than new schedule 2.

Sorry; it is in new schedule 1. That was my mistake, Mr Gray, and I apologise. I am not seeking to confuse proceedings any more; it is confusing enough to have to scrutinise the provision without an explanatory memorandum. That makes this kind of provision very difficult to scrutinise with any real sense. The point I wanted to make is about paragraph 3(4) of schedule 1, which says,

“A disclosure order has effect despite any restriction on the disclosure of information imposed by an enactment or otherwise.”

The words “by an enactment” seem to make it pretty clear that unless it excludes material, the provision is designed to enable the investigating authority to look at anything. Can the Minister give an example of what that aims to remedy? What lacuna is it aimed at preventing? We are talking about waving through a provision that allows a disclosure order to ignore another enactment, and that seems to me to be a large power.

The provision goes on to say, “or otherwise”, which is an absolute catch-all phrase. Can the Minister can explain why the provision is drafted so widely, as well as what kind of “otherwise” arrangement it seeks to get around and why? It seems to me to be extraordinarily wide. We might have seen the rationale for that in an explanatory memorandum, had there been one, but we do not have one to hand. Perhaps the Minister can tell us whether we will have an explanatory memorandum before the completion of the Commons stages of the Bill. I think that waving through extraordinarily wide arrangements is cause for concern if we are trying to scrutinise what the Government seek to do and why.

I thank hon. Members for their comments so far. I will first touch on the point that has been raised about the explanatory notes. I am told that it is normal procedure for that to be published before the Bill is introduced to the Lords—

That is complete nonsense. Usually, there are explanatory notes for amendments, so I do not know where that suggestion has come from.

The right hon. Gentleman knows that I would never do such a thing. In response to the provision on oversight, we discussed in the last sitting that we are looking at different forms of oversight. While that has not yet been clarified, I will engage with the hon. Member for Halifax to ensure that we have a form of oversight that works, be that from one of the existing oversight bodies or from another body. There are various different arguments, so I will come back to the hon. Member on that.

The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East asked what the measures were based on. The Bill is based on the Terrorism Act 2000, but we also looked at the Proceeds of Crime Act 2002. We sought consistency in the schedules by using the so-called TACT and the Proceeds of Crime Act as their basis. It is important to note that Police Scotland has been involved in this endeavour and is content. It has been a very important part of the conversation.

The hon. Member for Halifax asked where these orders could come from. Police need to compel individuals or organisations to answer questions. Because of the different natures of potential production orders, they may involve not just a single individual, but multiple sources; that is why I mentioned multiple companies. In this case, one may be following a particular individual but not be certain which airline they travelled on. Therefore, this could include either multiple companies that may have produced a good or a service, or multiple agencies that have supplied it. That is where it comes from.

Question put and agreed to.

New clause 8 accordingly read a Second time, and added to the Bill.

New Clause 9

Customer information orders

“Schedule (Customer information orders) makes provision for customer information orders.”—(Tom Tugendhat.)

This new clause introduces the new Schedule inserted by NS2.

Brought up, and read the First time.

With this it will be convenient to consider Government new schedule 2—Customer information orders.

I beg to move, That the clause be read a Second time.

New clause 9 and schedule 2 seek to insert customer information orders into the Bill as part of the suite of investigatory measures. Those who engage in state threats activity are highly trained individuals who have knowledge of tradecraft that can obfuscate their identity and real intentions.

For example, the tradecraft could be used to conceal transactions by creating secret bank accounts under false identities, or accounts registered to different addresses, in order to send or receive money for conducting activity. The operational objective of a customer information order is to enable an investigator to identify accounts and other account information in relation to state threats investigations. For example, this could be where a foreign agent is paying others to conduct state threats activity in the United Kingdom and police need to identify where the agent’s account is held, or it could be where a suspect is using a covert account under a false identity to receive funds to use for the purposes of state threats activity.

The customer information order is therefore intended for use as a tool of discovery during an investigation, often in the early stages. Once accounts have been identified through a customer information order, they could, where appropriate, be subject to further monitoring or investigation through a schedule 2 production order or an account monitoring order. Without customer information orders, accounts used by those conducting state threats activity may go unidentified, reducing investigative opportunities and, in turn, the ability for law enforcement to disrupt harmful activity and bring offenders to justice. We recognise that such orders could potentially require any financial institution to provide information about relevant customers. As such, senior authorisation is required within law enforcement before an application can be made to the courts.

We expect that, in practice, the powers will be used by police and NCA officers who have received relevant financial investigator training, and we are continuing to work with the police and NCA on creating the relevant guidance. Again, we have modelled the provisions on the terrorism equivalent and the measures used in the Proceeds of Crime Act 2002, and the consistency of these processes will ensure that law enforcement officers can make the most effective use of the powers. As I have set out, the customer information orders are another important investigative tool, opening new lines of inquiry and ensuring that law enforcement can run effective state threats investigations.

New clause 9 and new schedule 2 establish customer information orders, which authorise the police and NCA officers to obtain customer information from financial institutions. In its written submission to the Committee, for which we are all grateful, Counter Terrorism Policing has welcomed the provision, stating that it will

“enable investigators to identify accounts in relation to state threat investigations, or where an individual is using a covert account under a false identity to receive funds to use for the purposes of state threats.”

As the Minister outlined, the tool has been available to law enforcement for terrorism investigations thanks to schedule 6 to the Terrorism Act 2000, and it has been available for criminal investigations through the Proceeds of Crime Act. However, according to Counter Terrorism Policing, it has not been possible to use either Act in relation to state threats investigations, so we welcome the provision. It prompts the question of why we have not addressed this issue sooner.

Subsection (2) states that the judge may grant the order if they are satisfied that

“the order is sought for the purposes of an investigation into foreign power activity”,

and that

“the order will enhance the effectiveness of the investigation.”

We have spoken a lot about the value of an independent reviewer, and I welcome the substance of the Minister’s comments. It is worth keeping under review the threshold of a judge being satisfied that the order is sought for the purposes of investigation into foreign power activity. We cannot use these orders without good cause, but if we need them to be able to find evidence of foreign power activity, will investigators be able to satisfy a judge prior to that? It will be interesting to see how many applications are granted and rejected once we start to work with the orders. Aside from those points, I am happy with new schedule 2.

I will make a couple of brief points. The broad thrust of the new schedule and the intention behind it seem absolutely fine, but I am interested in the tests that must be satisfied before an order is made. Under the previous schedule on disclosure orders, the judge has to be satisfied that there are reasonable grounds for suspicion, that there is substantial value in the information gained under the order and that the order would be in the public interest.

In contrast, here in new schedule 2, the judge has to be satisfied only that the order is sought for the purposes of an investigation and that it will enhance the effectiveness of that investigation. That seems a pretty low bar to allowing this pretty invasive procedure to be gone through. Why that choice of language? I guess it is modelled on the provisions that have been mentioned. I have probably not been as diligent as the shadow Minister has in doing my homework and tracking through the previous bits of legislation, and I will now do that. The information gained under these orders could be pretty intrusive, so we need to ensure we are not giving carte blanche to all sorts of intrusive investigations. I am a little bit concerned about the low level of test, compared with the test for disclosure orders.

My second, brief point is that paragraph 4 of the new schedule suggests that the person whose records are about to be trawled through can seek to vary or discharge the order. It is not clear to me how they would go about doing that, given that I suspect most orders will be made without any notice, and they can even be made by a judge in chambers. What assurance can we have that people will be able to challenge this potentially intrusive investigation?

The question as to why we have not addressed this sooner is a fair one. The UK’s investigation legislation is complex, as the hon. Member for Halifax knows only too well from the homework she has obviously done for our sittings. For example, in the Proceeds of Crime Act there are more than seven investigatory orders used in criminal and civil investigations. The consideration that has gone into this has naturally been complex, and it has required a lot of time and input. This Bill, as she knows very well, has been some years—and, indeed, some Ministers—in the making.

Let us see. The fact that there are no recorded uses of the information orders in TACT demonstrates how sparing the use of these provisions will be.

Question put and agreed to.

New clause 9 accordingly read a Second time, and added to the Bill.

New Clause 10

Account monitoring orders

‘Schedule (Account monitoring orders) makes provision for account monitoring orders’.—(Tom Tugendhat.)

Brought up, and read the First time.

With this it will be convenient to consider Government new schedule 3—Account monitoring orders.

My apologies; I meant new schedule 3. New clause 10 and new schedule 3 provide for account monitoring orders for certain investigations into state threats. Police need to be able to obtain information relating to accounts held by a suspect in real time in order to identify and act on disruptive opportunities related to state threats activity. An account monitoring order will require a financial institution to provide specified information in relation to an account—for example, details of all transactions passing through the account—for a specified period not exceeding 90 days.

The information will normally be provided in the form of a bank statement at regular intervals, which could be every few hours. That provides police with real-time information that can be used to react quickly and intervene if necessary, potentially stopping the state threats activity from taking place.

For example, if police were investigating an individual for foreign power threat activity and had intelligence to suggest that the suspect was being paid by a foreign power to conduct the activity, the account monitoring order would be a key investigative tool for police to monitor if and when the money had been transferred by the foreign power. That would provide key evidence regarding whether the foreign power condition had been met for use in a future prosecution of the suspect, but it would also provide police with the real-time intelligence to suggest that the activity might be imminent, which would identify the need for disruption.

As well as payments from a foreign power, account monitoring orders might identify other activities of concern, such as a person purchasing a travel ticket, which might require immediate intervention. In the absence of an account monitoring order, the police would need to rely on other powers, such as a production order under schedule 2. That could require a financial institution to hand over the financial records it has in its possession, for example a monthly statement. However, that could mean a significant delay in police identifying and being able to respond to an activity of concern.

The process for applying for an account monitoring order will broadly follow that used in terrorism cases and investigations under the Proceeds of Crime Act 2002. That means that applications are subject to judicial approval and only available where the judge is satisfied that the order will enhance the effectiveness of an investigation into foreign power threat activity. Police have stated that this order is a critical tool required to successfully investigate offences within the National Security Bill, and that account monitoring orders may assist investigators in preventing harmful activity from occurring.

In our debates on new schedules 1 and 2, we have been through arguments similar to those that apply to new schedule 3. Once again, CT Policing states that these account monitoring orders will provide:

“investigators with real-time information that can be used to react quickly and intervene if necessary, potentially stopping the state threat activity from taking place.”

Of course, that is enormously welcome. I draw the Minister’s attention to one small matter, concerning the use of the word “constable”. For account monitoring orders, new schedule 3 stipulates that an appropriate officer is a constable or an officer of the NCA under paragraph 1(3). When we get to interpretation, paragraph 7(2) states:

“‘Appropriate officer’ has the meaning given by paragraph 1(3)”,

which refers us back to the word “constable” with no stipulation about rank whatsoever. That is very different from the requirements in new schedules 1 and 2, which stipulate that the officer needs to be a senior officer, meaning a superintendent or above. Is this an oversight? Should the officer be a senior officer, in line with new schedules 1 and 2, or can a police officer of any rank apply for an account monitoring order?

These are sensible proposals to give our law enforcement agencies the powers they require, but I would like clarification about definitions. The Minister referred to a bank, and it is clear that this is about monitoring bank accounts. The explanatory statement, expansive as it is—I think it is one line—says:

“These orders may require financial institutions to provide specified information relating to accounts.”

I want to clarify the definition of financial institution. If we go back 20 or 30 years, it was quite clear: we had bank accounts and financial products. Today, though, there is a complex environment of organisations that work and deal with financial accounts. For example, Bitcoin is now traded between organisations, some of which are covered by the Financial Conduct Authority and others not. I am trying to get some understanding of how widely this will go.

The other issue is about bank accounts that are not in the UK. I am particularly thinking about bank accounts in the overseas territories, and what happens there. We need clarification about the remit. The measure might work very simply with banks and other financial institutions, but in an ever-changing world we have a lot of organisations that deal with people’s “accounts” where they are not regulated.

The hon. Member for Halifax asks again about the term “constable”. She is right to ask, but that is not an oversight; it is accurate. There are different levels at which different officers are allowed to warrant things. As she rightly identifies, “constable” is the generic term, and then at various points different ranks of officer are required for different levels of authority. That is in line with the TACT powers. This area of authorisation is considered less intrusive, and that is why a lower-ranking officer is allowed to ask for it.

On financial institutions, the right hon. Member for North Durham identified that banking has changed somewhat since he and I had post office accounts in the early—I will leave that there. Schedule 3 uses the same definition as that used in paragraph 6 of schedule 6 of the Terrorism Act 2000; it is designed to align. The definition of financial institution in the Proceeds of Crime Act 2002 can be found in paragraph 1 of schedule 9. Account monitoring orders can be used as part of a broader set of purposes, such as civil recovery, and they are applicable to a broader range of financial institutions. Such breadth is unnecessary in respect of state threats, which is why that is slightly narrower, but the definition is there.

Obviously, these powers cannot be used to compel institutions overseas, so we are asking for co-operation from police forces.

I appreciate that in terms of overseas bank accounts, but there has been a lot of controversy about individual using overseas territories. If the Minister does not know the answer, he can write to the Committee to clarify the point. I just want to see how far these orders could go in terms of their effect.

The right hon. Gentleman knows very well that overseas territories come under slightly different jurisdictions, whether they are Crown dependencies or overseas territories. It depends on the jurisdiction, but I will be happy to write to him.

Question put and agreed to.

New clause 10 accordingly read a Second time, and added to the Bill.

New Clause 11

Requirement to register foreign activity arrangements

‘(1) A person (“P”) who makes a foreign activity arrangement must register the arrangement with the Secretary of State before the end of the period of 10 days beginning with the day on which P makes the arrangement’

(2) A “foreign activity arrangement” is an arrangement with a specified person pursuant to which the specified person directs P—

(a) to carry out activities in the United Kingdom, or

(b) to arrange for activities to be carried out in the United Kingdom.

(3) “Specified person” means—

(a) a foreign power specified by the Secretary of State in regulations;

(b) a person, other than a foreign power, specified by the Secretary of State in regulations.

(4) The regulations may specify a person other than a foreign power only if—

(a) the person is not an individual, and

(b) the Secretary of State reasonably believes the person is controlled by a foreign power.

(5) A person is controlled by a foreign power if—

(a) the foreign power holds, directly or indirectly, more than 25% of the shares in the person,

(b) the foreign power holds, directly or indirectly, more than 25% of the voting rights in the person,

(c) the foreign power holds, directly or indirectly, the right to appoint or remove an officer of the person, or

(d) the foreign power has the right to direct or control the person’s activities (in whole or in part).

(6) In subsection (5) “officer”—

(a) in relation to a body corporate, means a director, member of the committee of management, chief executive, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity;

(b) in relation to a partnership, means a partner or person purporting to act as a partner;

(c) in relation to an unincorporated association other than a partnership, means a person who is concerned in the management or control of the association or purports to act in the capacity of a person so concerned.

(7) The Secretary of State may make regulations specifying a foreign power or a person other than a foreign power only if the Secretary of State considers it reasonably necessary to do so to protect the safety or interests of the United Kingdom.

(8) The requirement in subsection (1) does not apply to a foreign power.

(9) Regulations specifying a foreign power or a person other than a foreign power may provide for subsection (1) to apply, with modifications specified in the regulations, in relation to a foreign activity arrangement made with the specified person before the regulations come into force.

(10) A person who fails to comply with subsection (1) commits an offence if the person—

(a) knows, or

(b) ought reasonably to know,

that the arrangement in question is a foreign activity arrangement.’—(Tom Tugendhat.)

NC11 to NC28 require certain arrangements with, and activities of, foreign powers and foreign persons to be registered. They are intended to form a new Part 2A, referred to in explanatory statements as the registration scheme. This new clause requires registration of arrangements with specified persons to carry out activities in the UK.

Brought up, and read the First time.

With this it will be convenient to discuss the following:

Government new clause 12—Offence of carrying out activities under an unregistered foreign activity arrangement.

Government new clause 13—Requirement to register activities of specified persons.

New clauses 11, 12 and 13 are the first of a series of amendments relating to the foreign influence registration scheme announced by the Home Secretary on Second Reading. I will come to the new clauses shortly, but first I want to make some introductory remarks about the scheme itself.

In the 2020 Russia report of the Intelligence and Security Committee, it was recommended that future counter-state threats legislation should address the issue of those acting on behalf of a foreign power and seeking to obfuscate their links or relationship. The director general of MI5 strongly emphasised the importance of legislating to ensure that those acting covertly could be pursued through criminal means to make the operating environment harder for those who intend to disguise or obfuscate who they are acting for. The ISC’s report identified the need for stronger transparency legislation, akin to that in place in the United States—namely, the Foreign Agents Registration Act 1938, known as FARA.

FARA requires any person, regardless of nationality, to disclose to the Department of Justice where they represent the interests of foreign powers in a political or quasi-political capacity, as described by the report. It is a disclosure requirement that applies far beyond a situation in which a person acts for a foreign intelligence service, extending to activities undertaken for foreign powers as well as other entities and individuals.

Only four years ago, the Australian Parliament passed its contemporary equivalent to FARA, the Foreign Influence Transparency Scheme Act 2018. The Australian scheme requires the registration of political influence activities undertaken for, or on behalf of, a foreign power or other individuals or entities subject to foreign power control. Both schemes contain a range of exemptions, offences and enforcement powers to further shape and support enforcement of the scheme. Although not like-for-like schemes, they share the principle of tackling covert influence through greater transparency.

There is evidence of the value of these schemes. A submission from the Australian Attorney-General’s Department to an ongoing review of FITS, which commenced in August last year, describes the behavioural changes that it has seen as a result of the scheme’s implementation: some organisations and individuals have adopted better transparency practices, while others have seemingly ceased activities that would be registrable. Enforcement of the US’s FARA has increased in recent years. That has also resulted in behavioural change, as well as prosecutions for non-compliance, including of one very high-ranking former military officer.

I am delighted to be before the Committee today to talk through the proposed UK scheme. This is an important piece in our package of measures and is the area of legislation that calls on sectors to play their part in making it difficult for foreign powers to operate covertly in the United Kingdom. Similar to the position with the precedents that I have just described, its overarching aim is to deter foreign power use of covert arrangements, activities and proxies by requiring greater transparency around certain activities that they direct, as well as where those activities are directed or carried out by entities established overseas or subject to foreign power control.

Put simply, where a foreign state deploys its influence in the UK, either directly or through third parties, that will now be subject to registration and more transparent. I must stress that the scheme’s requirements are not identical to those of the United States and Australian schemes. Although we have worked with our US and Australian colleagues to understand the lessons learned from implementation of their schemes, our scheme’s requirements reflect our own experience and the threats that we face.

The overarching aim of the scheme is to be delivered through two separate objectives and requirements. The first is to strengthen the resilience of the United Kingdom’s political system against covert foreign influence. Openness and transparency are vital to the functioning of our democracy. Where covert influence is deployed by foreign powers, directly or through third parties, it undermines the integrity of our politics and institutions. The scheme will therefore require the registration of political influence activities where they are to be undertaken within the United Kingdom at the direction of any foreign power or foreign entity, or by a foreign entity itself. I will refer to these obligations as the “primary registration requirements”.

Certain registered information will be made available to the public via a scheme website, similar to the position with the schemes of our Australian and US partners. This requirement is deliberately state and sector agnostic, as the source of foreign influence should be transparent no matter where it originates or manifests. The only exceptions, which I will come to, are where exemptions are necessary to protect existing obligations.

The second objective is to provide greater assurance around the activities of specified foreign powers or entities. The scheme contains a power to specify a foreign power, part of a foreign power, or an entity—such as a company or organisation—subject to foreign power control, where the Secretary of State considers it necessary to protect the safety or interests of the United Kingdom. It would require a person acting within the United Kingdom at the direction of a specified power or entity to register with the scheme. It would also require a specified entity to register activities to be undertaken within the UK with the scheme. I will refer to this as the “enhanced registration requirement”. Its use will be limited and subject to parliamentary approval.

These requirements will apply to certain arrangements and activities, regardless of the nationality of those carrying out the activity, and will be enforced through a range of offences and penalties, as well as powers to request information.

I also want to tell the Committee about the scheme’s exemptions, which are as follows.

Before the Minister tells us about the exemptions, it would be helpful to know how the enhanced registration—let us call it tier 2 —will actually work. So far, we are in the dark. The basic registration seems eminently sensible, but what will the procedure be to specify a country, entity or person to whom enhanced registration will apply? How will it work? We need to know that before we find out who might not be expected to register in that way.

The right hon. Gentleman will see that I have a number of pages of text that I will be coming to. If he will forgive me, I will explain all these elements as we get to them.

The scheme’s exemptions are as follows: individuals to whom privileges and immunities apply in international law, as provided by, for example, the Vienna convention on diplomatic and consular relations; legal services, as well as information subject to legal professional privilege; domestic and international news publishers, including confidential journalistic material and sources; and arrangements to which the UK Government are party.

The scheme has also been designed to uphold the letter and spirit of the Belfast/Good Friday agreement. To that end, any arrangement with Ireland, or with a body incorporated or associated under the laws of Ireland, will be exempt from registration, as are activities to be carried out by such entities. That will avoid interference with the rights of citizens of Northern Ireland who identify as Irish, as well as the activities of cross-border entities and institutions.

I want to close my opening remarks—that is right; we are just starting—by mentioning George Brandis, the former Attorney General for Australia who was responsible for passing the Australian scheme. He was recently reported as commenting on the announcement of the UK scheme:

“This ought not to be in the cockpit of political controversy in the U.K. It ought to be something, because it is necessary for the protection of the national interest, that commands bipartisan support.”

That is certainly the sentiment that I have taken from Second Reading and our deliberations in Committee so far, and I look forward to working with all sides to ensure the requirements are effective and proportionate.

With that, I turn to the group of new clauses relating to the enhanced registration requirement. Each of the new clauses is substantive and so, after setting out the benefits of the enhanced requirement, I will take each in turn. The enhanced registration requirement will provide greater scrutiny of the activities of specified foreign powers or entities while deterring the use of covert arrangements. I describe it as “enhanced” because it creates wider requirements to register than the primary registration requirement, which we will come to later. That is proportionate to the aim of this part of the scheme: to provide greater assurance around the activities of specified foreign powers or entities.

The enhanced registration requirement will provide three principal benefits. First, it will provide the Government and the public with a greater understanding of the scale and extent of activity being undertaken for specified foreign powers and entities within the United Kingdom. Secondly, the offences and penalties for non-compliance will increase the risks to those who seek to engage in covert activities for foreign powers, either directly or through specified entities. Finally, the requirement offers potential for earlier disruption of state threats activity, where there is evidence of a covert arrangement between a person and a specified foreign power or entity but it is not yet feasible to bring charges for a more serious state threats offence.

If the Minister wants to come here and just read his speech to us, that is fine, but that is not what scrutiny is. I am fully supportive of the proposals under tier 1, but I find it difficult to understand how tier 2 will work in practice. Putting countries or companies on the list will cause huge diplomatic incidents. Let us say we put Huawei on the list, for example; I am sure there would be fallout from that. As well-meaning as tier 2 is, practically, I do not think it will ever be used.

The right hon. Gentleman and I have had many debates on the nature of different foreign influence in the seven years that I have been here. We have discussed many different companies and countries in various ways. I know he shares my absolute passion for protecting the United Kingdom from foreign influence and knows the difficulty that that causes in diplomatic areas. He appreciates better than almost anyone how difficult it is sometimes to match the economic needs and requirements of the United Kingdom with the need to protect ourselves from foreign influence. He is right that this will cause difficulty. There is no getting around the fact that making a decision on the enhanced tier will have diplomatic repercussions. But the reality is that if we do not make those decisions, the implications for our economy and domestic security will be very high.

The right hon. Gentleman is absolutely right that there are companies that some of us have stood up to and made a point of identifying as actors for a foreign state—he mentions Huawei; there are others—and which are in many ways difficult examples. I am not going to say whether Huawei would or would not be subject to the enhanced tier, as we have not looked at any determinations on that, but it is quite clear that there are some countries—Russia is a good example today—that would absolutely require the enhanced tier. Different elements of Russian business would no doubt fall within it.

Yes, but the Minister knows that there are many countries in the world that, although they are not comparable with Russia, would also cause economic harm but are not in the higher tier. Would it not be better to have a broader scheme that mirrored tier 1, with tight definitions of what needs to be registered, and apply it to all countries? We would then give ourselves protection and avoid the diplomatic pitfalls every time we wanted to follow this process.

People have to register under tier 1 anyway. That will be a public scheme that already identifies many areas. Tier 2 will make sure that there is an enhanced aspect that allows us to be clear what exactly is going on, rather than relying on a general identification. That is an important distinction.

Is my understanding correct that tier 1 is about capturing arrangements and activity undertaken for the purpose of influencing a political event or decision, but that the second tier will capture all other behaviour beyond political influencing, such as acting as a foreign intelligence officer? Is it correct that the scheme as set out at present is aimed at making everyone apply at the lowest level—the political influencing level—but that only more serious incidents will be dealt with by designating individual countries or companies? We are going to immediately run into the difficulty of upsetting diplomatically any person, company or country that is designated for more serious activity.

The hon. Lady is not noted for her shyness. I am surprised that she feels that the diplomatic repercussions of designating a company or country should dissuade the UK Government from defending themselves. I know she does not think that, and I know the right hon. Member for North Durham does not think that.

The different schedules identify the different natures of influence being used. As the hon. Lady rightly identifies, schedule 1 is about political influence. As I think we all appreciate in this House, that should be public. Those who seek to influence anyone in this House or anyone else by political means, whether through lobbying or in different ways, should identify on whose behalf they are doing so. I do not think that is a very contentious provision.

I am glad to see the hon. Lady nodding. The second point is the enhanced scheme. That is where influence may come in different ways, where co-operation and interaction with different businesses that pose a particular and distinct threat may be required. That is why—we will come to this later—the political register will be public and the second register will be private, but the identification of those who are required to be registered will of course have to be public and there will be a political and a diplomatic decision that will go with that.

I sympathise with what the Government are trying to do, and I think my hon. Friend the Member for Garston and Halewood does too, but I am never in favour of putting things on the statute book that look tough but that, frankly, will never be used. There must be a more direct way of doing this—a broader measure that applies to all countries, which is then used against relevant countries. My fear is that the measure as it is written at the moment looks tough but will not be usable.

The right hon. Gentleman raises a fair point, but I simply do not believe that if he were in my position, he would not use the powers. I would use them, and I am sure he would use them in a situation where they were required. I know that he has never shrunk from a fight or diplomatic argument, but I think that this is important. The problem is that if the enhanced power were to be used for every nation, the volume of data produced would be enormous and the imposition on companies would be huge.

I agree with the Minister, but he has a problem. He and I have dealt with the Foreign Office and other diplomatic entities over many years: he knows that the pressure that the power will come under, and the competing arguments against security, will make it unusable.

I do not accept that, so I think we will have to end this discussion with an agreement to disagree.

Indeed. But I entirely respect the right hon. Gentleman’s position, and I do understand the point he is making.

New clause 11 will require Ministers—specifically, the Secretary of State—to be willing to engage in a strong discussion with other Departments that rely on investment or, indeed, diplomatic leverage. Yes, I am afraid that is a balance that the Government have to make; the right hon. Gentleman is absolutely right to identify it, but I simply do not accept that that means the power will not be used. It is true that the power will be constrained, but that does not mean that it will be unused—Ministers who see the threats before them will be willing to use the powers that they have. We will no doubt continue this discussion later.

New clause 11 will provide three principal benefits. The first is that it will provide the Government and public with a greater understanding of the scale and extent of activity being undertaken for specified foreign powers and entities within the United Kingdom.

The Minister explained just a few moments ago that the tier 1 registrations would be public but the tier 2 enhanced registrations would be private. I am not sure how he can argue that the tier 2 enhanced registration would give the public much more confidence if it is a secret.

The nature of the registration will not be a secret, but who has had to register will be kept private at the moment. I am already keeping this matter under discussion, so I am glad that the hon. Gentleman sympathises with my concerns. He and I are fully aware that journalism is a very powerful force in many of these areas.

This baffles me, as it does the hon. Member for Dundee East. Tier 2 registration will not be private, will it? The order will have to be moved to put them on the list in the first place. Everyone will know, so what is the problem with providing transparency? I do not think you can have two tiers with different levels of transparency.

Let me clarify. Whoever is identified as being on the enhanced tier will be identified publicly. It is those companies that may be co-operating; at the moment, there is a discussion as to whether that should be public or private. The reason for that discussion is that some companies will be co-operating and we may feel that we wish to see that co-operation continue, even though we wish to have the compliance and registration so that we know who is doing what. The argument is that the Government should have the ability to have that information.

If I am the CEO of a company and the Government put my company on the list, surely that will get out anyway. I would have to report it to my shareholders or board, so I am not sure about the benefits of keeping it a secret.

Forgive me, but I think the right hon. Gentleman has got this slightly the wrong way round. By definition, the company that would be identified would be a foreign company, not a UK company.

Yes, but if I headed a French company—I am not suggesting that we use this power against the French for one minute—and had shareholders, surely I would have to tell them, and report at board meetings, that I had been on the list. It will get out anyway, so what is the point of keeping it quiet?

We are clearly speaking at cross purposes. The state that is on the enhanced register would be public. The company would be public. Those UK companies that are registering may not be. The right hon. Gentleman has it the wrong way round.

Okay. I am going to carry on, but I am very happy to continue this discussion on a later occasion.

New clause 11 will provide three principal benefits. First, it will give the Government and the public greater understanding of the scale and extent of the activity. Secondly, the offences and penalties for non-compliance will increase the risk to those who seek to engage in covert activities for foreign powers, either directly or through specified entities. Finally, it offers potential for earlier disruption of state threat activity where there is evidence of a covert arrangement between a person and specified foreign power or entity but it is not yet feasible to bring charges for a more serious state threat offence.

I want to be clear that we expect use of the enhanced registration requirement to be limited. It is an additional tool of assurance to bolster the package of measures within the wider Bill. The power to specify a foreign power or entity will be available to the Secretary of State when the Secretary of State considers it reasonably necessary to do so to protect the safety or interests of the United Kingdom. It will be subject to the affirmative procedure.

It is also vital to stress that the use of this requirement should not be taken to imply that every national of a specified foreign power or person associated with a specified foreign entity is to be mistrusted. The message here is quite the opposite: any person who complies with the obligation to declare an arrangement with a specified foreign power or entity is contributing to the safety and security of the United Kingdom by being open and transparent about that arrangement.

Although I am sure that members of the Committee will be keen to understand which foreign powers will be in scope of the enhanced registration requirement, I am sure they appreciate that it would be premature—if not damaging—to make undertakings on that at this stage. The Government will decide when the scheme is ready to be brought into force. For now, I will cover each amendment.

New clause 11 is the requirement to register foreign activity arrangements. A foreign activity arrangement is where activity is to be carried out, or arranged to be carried out, within the United Kingdom at the direction of a specified foreign power, part of a foreign power or an entity subject to foreign power control. The requirements could apply to any activities, but subsection (9) provides for this to be modified through regulations where necessary.

I wish to bring four key points to Members’ attention. First, I want to reflect on what we mean by a person required to register in this context under subsection (1). A person can be an individual, regardless of their nationality, or an entity. However, if a company or organisation is being directed by a foreign power or entity, the company or organisation would be responsible for registering the arrangement, not its individual employees.

We will shortly discuss new clause 13, which includes a requirement for specified entities to register their own activities. That is important because it makes clear our intention that an employee of a specified entity cannot be considered as being in a registrable arrangement with that entity. The approach was taken in response to sector feedback during our public consultation as a means of reducing the potential registration burden on companies and other organisations that may have many employees all engaged in the same activities.

Importantly, subsection (8) clarifies that there is no requirement for a foreign power itself to register. The scheme intends to increase assurance and transparency of activities being carried out for a foreign power where the involvement of that power might otherwise not be apparent.

In new clause 11(1), “A person (‘P’)” might, as the Minister said, be an individual, an entity or a business. This is not at all clear. Is this the UK individual, entity or business or is it the overseas individual, entity or business that is directing a UK citizen? Is it a combination of the two?

Let me be completely clear, because subsection (8) makes it completely clear: there is no requirement for a foreign power itself to register. We cannot compel foreign powers or entities to register; this is a compulsion on UK entities or individuals.

The scheme intends to increase assurance and transparency to activities being carried out for a foreign power, where the involvement of that foreign power might otherwise not be apparent. As such, we would not expect other Governments to register with the scheme in respect of activity that they themselves are undertaking. As the later “interpretation” clause will make clear, that includes any person acting in the capacity of an office holder, employee or other member of staff of the foreign power, or a person whom the Secretary of State reasonably considers to be exercising such functions.

This scheme has been designed to avoid interference with our obligations under international law regarding the diplomatic and consular relations between countries, as well as the need to protect routine Government-to-Government engagement—the official visits of officials, military and other agencies of a state, for example.

Secondly, subsection (2) sets out the definition of “arrangement”, which requires there to be direction from a specified foreign power or entity to a person. That element of direction is important because it envisages a power relationship between the specified foreign power or entity and the person. The specified foreign power or entity has told the person to carry out the activity, or arranged for it to be carried out. While in practice it is entirely likely for a direction to be delivered in the language of a request, the context of the relationship between the specified foreign power or entity and the person being directed will ultimately determine whether it falls within scope.

What happens if an intermediary is involved? What if a designated state power says to someone locally, “You arrange for these activities”, rather than saying to someone in the United Kingdom, “I want you to undertake these activities”? That falls within the terms of the new clause. That intermediary then instructs people in the United Kingdom to undertake activities. Does that not mean there is a gap in the clause and that people in the UK undertaking those activities would not have to register anything? It would be almost impossible to enforce against that intermediary requirement to register. Is there not a potential problem there?

My understanding is that—in fact, I will come back to that when I sum up, because the hon. Gentleman has raised an interesting point.

We consider a power relationship to include, for example, where the specified foreign power or entity has formally contracted a person’s support for an activity, or where it is paying a person to deliver a service. It could also include a situation where a specified entity is making a request of its subsidiary—again, the direction might be in the language of a request, but the power relationship would make it a direction. Where such formal structures are not established, a direction should include where a person is requested to act, but through the promise of compensation or coercion—for example, future payment, benefit or favourable treatment.

To be clear, though, it would not be enough for a specified foreign power or entity to simply provide funding in support of an activity—through subsidy or donation, for example. Nor could a generic request from a specified foreign power or entity be considered a “direction”—a request made through a public communication to a large distribution or mailing list, for example.

A power relationship, whether formal or informal, is necessary to ensure that unilateral activity on the part of the person is not within scope and nor is activity that is part of a collaboration and absent a power relationship. We shall set out in guidance what we intend by a direction so that it is clear to the public and to the courts what arrangements are registrable.

An arrangement also captures where a person is to arrange for activity to be carried out at the direction of a specified foreign power or entity, as well as where the person is to carry out the activity themselves. That is to ensure that a person in a direct arrangement with a specified foreign power or entity cannot avoid registration by simply contracting out the activity to a third party, creating a degree of separation between the specified foreign power or entity and the ultimate person who will carry out the activity.

Thirdly, I turn to the definition of “control”, where a specified entity is said to be subject to foreign power control. It is important that we capture the commonly used practice of foreign powers channelling state threat activity through private entities. To capture this effectively we have defined “control” under subsection (5) as being where a foreign power holds, be it directly or indirectly, more than 25% of the shares or voting rights of the entity, or the foreign power can appoint or remove officers of the entity.

Control can also be demonstrated where the foreign power has the right to direct or control the entity’s activities, allowing the Secretary of State flexibility if foreign powers exercise other significant forms of control that fall below those thresholds. The more than 25% threshold is in line with existing legislation on substantial control over an entity.

I appreciate that it is difficult to identify control, but how would we get around the situation of a Russian oligarch who is clearly under the influence of the Kremlin, but whose company is owned through myriad different offshore companies? Would it have to be proven that the ultimate beneficiary was that individual to fall under this legislation? Those people, and even states, are very clever and hide who ultimately controls that company.

The right hon. Gentleman is identifying a problem that we have had with foreign ownership of companies for a very long time. That is why the Economic Crime and Corporate Transparency Bill is very important, because the ownership of companies is something that has been a challenge and he is correct to identify it. This Bill addresses certain elements of that control, but he is right that it does not address the totality, although it provides an important brick in the wall that we are building. That is why the Economic Crime and Corporate Transparency Bill and the companies registration are important.

So, really, what we are enacting in this legislation will have to be dovetailed with the Economic Crime and Corporate Transparency Bill. The issue around Scottish limited partnerships has been quite controversial. Is the Minister saying that when the two come together, they will form the toolkit to tackle these individuals?

The right hon. Gentleman knows that there is not a single tool to deal with every task. The Bill will certainly help with a lot of things that already exist; the Economic Crime and Corporate Transparency Bill will add to it, and no doubt, in future years, different Governments will add further tools.

May I finally come to my fourth point? [Interruption.] I hear the hon. Member for Birmingham, Yardley chuntering. I will briefly summarise the procedural element of the new clause. The requirement is to register a foreign activity arrangement within 10 days of its being made, or otherwise before the activity is carried out. That is important because it may not be obvious to the Government under whose direction the person is acting. The prior registration of arrangements offers some opportunity for the Government to be informed before an activity pursuant to a foreign activity arrangement takes place. It also offers an opportunity to enforce the requirements of the scheme prior to an attempt to carry out covert influence activity.

Subsection (10) makes clear that an offence is committed if a person fails to comply with the requirement to register, and knows—or ought reasonably to know—that the arrangement is a foreign activity arrangement We will discuss the proposed range of offences shortly.

The offences relating to the other part of the scheme—where the registration of political influence activities are concerned—come with a higher bar for the prosecution to meet. Given the likely attention that the measure will receive if a foreign power, part of a foreign power or an entity subject to foreign power control is specified through regulations under subsections (3) and (4), a person should not be capable of avoiding prosecution by claiming they were unaware of the requirement to register. That said, we are mindful that a person who is unwittingly acting for a specified foreign power or entity should not be criminalised. That is why the test is such: a person can be prosecuted only if they ought reasonably to know that they were acting for a specified foreign power or entity.

New clause 12 makes it an offence to carry out activities, or arrange for an activity to be carried out, in the UK pursuant to a foreign activity arrangement that has not been registered. The requirement to register a foreign activity arrangement, which is an arrangement with a specified foreign power, part of a foreign power or entity subject to foreign power, applies to the person who is party to that arrangement—in such a case, that is the person directed by the specified person.

In practice, many other people could be involved in the activity or activities pursuant to that arrangement. For example, if the person party to an arrangement with a specified foreign power is a company, multiple employees could be all engaged in registerable activities within the UK under the arrangement. While I have already explained that the responsibility for registration would rest with the company in this example, and that that is necessary to avoid the burden of each individual employee being required to register separately, the effect of the new clause is to make it an offence to carry out an activity, or arrange for the activity to be carried out, pursuant to a registerable arrangement that has not been registered.

There are two main justifications for the offence. First, it will reduce the likelihood that activities pursuant to an unregistered arrangement with a specified person will be carried out, supporting the overall aims of the scheme. It makes it clear that all individuals have a role to play in ensuring that the requirements of the scheme have been complied with. Where there is doubt that an organisation or company has registered its arrangement with a specified person, it is a good outcome if its employees take necessary steps to clarify that their registerable activities are covered by registration.

Secondly, the offence will provide an important means of disrupting all levels of an organisation that has been identified as being engaged in a covert arrangement with a specified foreign power, part of a foreign power, or entities subject to foreign power control. If there was solely an offence for failing to register an arrangement, with the organisation solely liable for registration, a prosecution could be brought only against the organisation and its directing mind. The offence allows for a prosecution to be brought at any level.

The offence will be subject to a knowledge test that a person knows or ought reasonably to know that they are acting under the direction of a specified person. That will guard against the prosecution of individuals who could not have known that they were being directed by a specified person, and so could not have been expected to take steps to check whether their activity was pursuant to an unregistered arrangement before carrying it out.

There is no intention for the offence to obstruct or stifle the daily activities of businesses or organisations. Rather, it is to encourage a culture of responsibility and compliance. Clearly, where employees of a company or members of an organisation could not know they are acting under the direction of a specified foreign power or entity—for example, if they are at a level in the company where they would not ordinarily be privy to such information—they would not be in danger of committing an offence

The offence is important for cases in which there is evidence that an organisation is complicit in acting covertly for a foreign power. Being able to pursue the prosecution of the organisation and its directing mind is clearly beneficial, but being able to act against any level of an organisation will help to strengthen the deterrent and disruptive benefits of the scheme against very capable adversaries.

How does the Minister define “foreign power control”? What would be the evidential test? I have heard him argue, for example, that all Chinese companies are ultimately under the control of the Chinese Communist party. Is that the evidential test? Or to take the Russian example, would the evidential test be a company being owned by an oligarch who is close to Putin? Clearly, if the Chinese Communist party wants to control a Chinese company, it can. Would that be the threshold at which a company would be caught by the measures?

The right hon. Gentleman is right to ask. Control over an entity means 25% of a shareholding—that is one thing that we have already identified—or it could also be formal mechanisms within the company, including voting power or other forms of control. Some foreign powers enact legislation to oblige entities to comply with their security services or intelligence agencies—the right hon. Gentleman knows what I am referring to—giving them a right to exercise an element of control over those entities outside formal governance structures.

Further to the point made by the right hon. Member for North Durham, the control criteria could be indirect control of more than quarter of the stock, indirect control of more than a quarter of the voting rights, or an indirect ability to appoint or remove an officer of the entity. That is dreadfully subjective. Unless the criteria are really nailed down, people could absolutely fall foul of the measures without knowing that they are being controlled in any way.

I do not think that is the case. The hon. Gentleman should realise that foreign control of any kind is under the general provision of the so-called ordinary provision, while the enhanced provision would be specifically identified, so individuals required to register under the enhanced provision would be aware that they are contracting within an organisation or entity that falls under it. All those contracting with a foreign entity will know that they have to register under the ordinary provision, so the legislation covers both cases.

That does not clear things up for me. I have mentioned China. I am sure if I googled long enough I would find a speech that the Minister has given where he suggests that all Chinese companies are controlled by the Chinese Government, if they wish to have foreign influence. There is clear, direct evidence about doing business in Russia—it is not the law, but there is coercion regarding the individuals around Putin. If we are saying that the Chinese Communist party can control most companies, is the Minister saying that all those companies will have to register?

The right hon. Gentleman knows very well that what we express in private and what we say from the Dispatch Box cannot always be absolutely aligned. I am not going to identify every single Chinese company in one go. He knows that there are different elements of control. The Companies Act 2006 sets out the nature of those different elements.

I am sure the Minister will get some China hawks on the Back Benches of the Conservative party arguing that all Chinese companies should have to be registered under the scheme. I think the measure needs some clarification before it goes any further. There are also certain individuals that the Minister’s party has taken money off who very clearly have connections with the Kremlin and who control companies in this country through front people; the ownership is actually individuals who we would not want to be associated with.

The right hon. Gentleman knows very well my own views on foreign influence on political parties. Sadly, we have seen such influence in all political parties, where parties or members of political parties have unwisely, sometimes rashly and often extremely foolishly, taken money off Chinese, Russian or other individuals. That is completely wrong and I know he and I share complete revulsion at it. I am very glad that we are sorting some of that situation out. It is a problem that the whole of the United Kingdom and many other political parties around the world have to face. We need to deal with it, and that is what the Bill is doing.

New clause 13 is the second aspect of the enhanced registration requirement. It will require the registration of activities to be carried out within the United Kingdom by a specified person. The first aspect of the enhanced measure, which we dealt with earlier, was the registration of arrangements with a specified person. Although arrangements are important, we recognise that activities within the United Kingdom will be carried out by the specified person themselves and not just those they direct. I should be clear: “specified person” in the context of the requirement can only be a specified entity subject to the foreign power control. I have already explained that foreign powers themselves are not required to register under the foreign influence registration scheme. We are therefore proposing that the specified entity subject to foreign power control, for example a company or organisation, be required to register its activities within the United Kingdom before they are carried out. An offence would be committed where the specified entity had failed to register its activity and it knew or ought reasonably to know that the activity in question was not registered.

To ensure that the requirement is practical and proportionate, the requirement to register is to be fulfilled by the entity and not its individual employees. Although we recognise that an employee is also capable of being directed by its employer to engage in the same registerable activities, we considered it disproportionate to require each individual to register in such a scenario. There would also be practical difficulties, not just in administration but also in consistency. If each individual employee were required to register the same activity, that increases the likelihood that the information provided is materially different and possibly even contradictory.

Finally, hon. Members may wonder why, compared with the requirement to register an arrangement, there is no 10-day period within which the registration must be made. The requirement to register an arrangement within such a period is necessary, as it may not be immediately clear that a person is acting at the direction of a specified person, as the person receiving the direction is separate to the specified person directing the activity. Where the specified person—the entity subject to foreign power control—is acting itself, it should already be clear and it is therefore enough that the registration takes place before the activities are carried out.

I want to finish my remarks by reiterating that if we did not include that requirement there would be a clear gap. A person who is separate from the specified entity, for example a different organisation, would be required to register an arrangement that involves being directed to act in the United Kingdom, but there would be no requirement for the specified entity itself to register its own activities. Leaving such a gap would not make sense in the context of countering state threats. I also want to stress again that we intend the use of the enhanced measure to be limited. It is there as an additional tool of assurance and its use will be subject to parliamentary approval through affirmative procedure. I ask the Committee to support the clauses.

Before we move on to the debate, may I raise a matter to the Committee that has been brought to my attention? The 1922 Committee elections for Select Committees happen at 2 o’clock this afternoon, which is an obvious clash with the meeting of this Committee. I understand that it would be possible for the Minister to move an amendment to the sitting time this afternoon to 2.15, if he wished to do so. Any objection from any member of the Committee would of course make that fall. Before we enter a discussion—although I would rather not discuss it too long—would the Minister be prepared to move that the Committee should sit at 2.15?

Would it be possible to extend the sitting by 15 minutes, so that no time is lost? If we were to do that, I would have no objection.

If the Minister so moves, it would be a question of starting 15 minutes later and ending 15 minutes later this evening.

Ordered, That the Committee shall meet at 2.15 pm until no later than 5.15 pm.—(Tom Tugendhat.)

I have listened very carefully to everything the Minister has said. I will speak to all of the new clauses in the group, which is the first of several additions to the Bill concerning the foreign influence registration scheme, as well as raising some more general issues which will need ironing out about the scheme as we move into this section of the Bill. First, I assure our Australian friends that beyond making sure that we have provided our scrutiny and ensured that the registration scheme does everything that we need it to do, we are very much in support of the introduction of it.

I appreciate that the Minister is not responsible for the publishing of the provisions after Committee stage has already started, but I am going to have to come back to the issue of explanatory notes. To assist the Minister, I suspect that the feedback he has had from his officials is that it would appear we only get a technical explanatory statement when an amendment is published on the amendment paper. The more complex explanations are in the explanatory notes published alongside the Bill. I expect that that is the way it has happened in the past, in anticipation of Governments not tabling substantial additions to pieces of legislation so late in the Commons scrutiny process. That may be the feedback he has had from his officials. However, so important are the types of explanations and examples that we are asking for, I do not think that there would be anything out of order if those examples were provided to Members of the Committee directly, or that anything prevents that.

Also, a commitment was given on the Floor of the House on Second Reading that those notes would indeed be introduced. There is no real reason why those explanatory notes could not have been produced.

My right hon. Friend is quite right. Let me turn to the explanatory notes provided with the Bill as examples, for instance. If person A is contacted by person B to organise activity X, those examples are on page 14, 16, 17, 18 and so on, to try to add some colour and operational understanding of part 1. We have then got nothing to accompany an outline in real-world terms of how so many of these provisions about the foreign influence registration scheme, which is complicated, for the reasons that hon. Members have already outlined, would work in effect. I just put it on the record that that has been a real frustration for Committee members and is disappointing. We understand from officials that efforts will be made to correct it by the time the Bill gets to the Lords, but that is of no use to us, so let me gently suggest that some of those examples be provided before we get to Report, which I know would be enormously welcome.

Government new clause 11 is the first of the new clauses that will make up a new part 2A of the Bill. This is the introduction of the long-awaited registration scheme. I have already said that, generally speaking, the registration scheme is very welcome—although complicated, for the reasons that right hon. and hon. Members have raised. It is worth reflecting on. It has been one of the key recommendations of the Intelligence and Security Committee’s 2020 Russia report.

New clause 11 requires registration of arrangements with specified persons to carry out activities in the UK. Subsection (1) states:

“A person…who makes a foreign activity arrangement must register the arrangement with the Secretary of State before the end of the period of 10 days beginning with the day on which”

the person “makes the arrangement.” As it stands, there is potential for loopholes all over the place, but it is clear that we are expecting much more detail to be outlined in regulations, so we will be following that process very carefully.

New clause 11(4) states:

“The regulations may specify a person other than a foreign power only if…the person is not an individual, and…the Secretary of State reasonably believes the person is controlled by a foreign power.”

Subsection (5) then outlines the conditions that need to be met in order for a person to be controlled by a foreign power, including the foreign power holding

“more than 25% of the voting rights in the person”

or

“more than 25% of the shares in the person”.

Those quite formal thresholds do not really reflect some of the murky ways in which this type of activity manifests. As my right hon. Friend the Member for North Durham has already pointed out, in relation to Chinese companies, the lines are even more blurred because of new laws under the CCP. It very much seems that we are talking about businesses, entities and bodies corporate, as they are referred to in subsection (6). I can only imagine that the Government have taken legal advice on the drafting, but I do not know why we cannot be clearer when distinguishing between individuals and entities and businesses when describing a “person” in these provisions of the Bill. These are exactly the types of areas where those examples would have been incredibly helpful.

Returning to the point about registering within 10 days, I would like to push the Minister for absolute clarity that it is 10 days after the arrangement has been made, not the activity commencing. My reading is that someone would have to register no later than 10 days after the agreement is made, and before the activity commences, but there is no set period as to how long is required between registering the activity and commencement of the activity. My concern is this. If an arrangement is made on something that we would be very unhappy to see go ahead, it is registered on day 9 and the activity starts on day 10, where is the opportunity for our agencies to have properly had a look at that arrangement and to intervene if necessary? Should there not be a buffer, so to speak, to prevent what we would be concerned about from happening? I am talking about a specified period between registration and commencement, to give the agencies the space to do that work.

On new clause 12 and the new offence of carrying out activities under an unregistered foreign activity arrangement, we need absolute clarity as to exactly when an arrangement is deemed to have been registered. This has been one of the lessons of the American scheme under the Foreign Agents Registration Act—FARA, as it is known—which was first enacted in 1938. From speaking to partners, we know that criticisms have in the past been publicly made of an arrangement that appears to be unregistered because the details are not in the public domain, yet the responsible party will be able to demonstrate that they have made the appropriate registration within the specified timeframes. Here in the UK, will an arrangement be registered at the point at which the documentation is submitted? Will it be at the point at which the submission is acknowledged? Does it need to be approved? Or does it need to be published in some form before someone has the necessary green light?

The Economic Crime and Corporate Transparency Bill is currently between Second Reading and Committee and is partly born out of necessity, it having been realised that if Companies House is to act solely as a registration scheme for companies, it is wide open to abuse. The Second Reading debate last week was rife with examples of that abuse. My concern about the foreign influence registration scheme is that, unless someone is truly evaluating the arrangements registered under new clause 11, what confidence will it give us about the foreign activity arrangements being undertaken?

That brings me to resourcing. The efficacy of this scheme relies on its being properly resourced. I would be grateful if the Minister explained what the back-office function will be. Who will oversee the roll-out of the scheme? Will it be the Home Office leading, and what resources will the team have? We only need to look at business questions on Thursday last week, or any week for that matter, to see the number of colleagues raising complaints about how long it takes the Home Office to deal with anything. The Department has publicly said that it does not believe it can return to its 20-day service standard until March next year.

That is why we need clarity on when an arrangement is registered—to prevent anyone from inadvertently committing an offence under new clause 12 and to ensure that legitimate arrangements are not stuck in limbo forever, unable to progress because of delays and backlogs in the Home Office, despite, I am sure, the best efforts of civil servants. I think it is the minimum we can expect from the Committee process to understand from the Minister exactly when a scheme is registered under these proposals.

We are now turning to some of the most important provisions in the Bill. I do not think anybody here would argue that we do not need some sort of foreign influence registration scheme. The question for us today is, is this the right scheme? This debate gives us a lot of food for thought, and we will have to go away and think about it further. We have had the benefit of some very useful meetings with officials, for which I am extremely grateful.

I understand the thinking behind the two-tier system, with a broad primary political tier followed by a narrower but all-encompassing enhanced one. Obviously, the Minister is right about political transparency being essential and something we all support. It is the enhanced tier and how it would operate that challenges Members slightly more. Designating states or organisations for the enhanced tier will clearly be an incredibly serious issue, with profound implications for everyone impacted, as well as the diplomatic challenges highlighted by Members.

Many of the questions raised are ones that I would have asked, so for the moment I want to focus on the question I posed in my intervention, which is about precisely how this would work in circumstances where there are various intermediaries. Again, the hon. Member for Halifax made a very valid point: this could be helped by real-world case studies and examples, otherwise we are just using our imagination to try to come up with examples of how this will apply in practice, and my imagination is probably not up to the task. However, I will try to give a fairly mundane example of where this legislation might have implications.

A specified Government or institution in country X decides that they want a sympathetic professor or tech boss in the UK to try to corral some experts in a particular industry into an association or team, with the purpose of providing regular updates on developments in said industry in the United Kingdom. They might have longer-term goals for how they could use that information and these people. That seems exactly the type of situation that the clause is aimed at. At the stage that the professor or tech boss is tasked with putting together this team on behalf of Government X, he is under an obligation to register that arrangement, as I understand it. That then enables people to keep an eye on that activity, if it is thought necessary, in an attempt to stop anything untoward happening before it is too late. If he does not register, that obviously raises a big red flag, perhaps if the security services are aware of some of his other activities.

That all seems pretty straightforward. The problem is what happens if that professor or tech boss is not situated in the United Kingdom but is in country X? There seems little prospect of enforcing these rules against him in country X if he does not register the arrangement. If I have interpreted it correctly, the new clause does not put any obligation on the people in the UK who are undertaking the activity to register the arrangement. That seems to be a potential gap, because that seems a far more likely scenario than a simple instruction straight from a specified Government or company to people in the United Kingdom saying, “You do this”. There will always be intermediaries involved, and that potentially sets up a problem.

I appreciate that there will be issues with what the state of knowledge of the persons in the UK who are doing this via the intermediary might be. Other parts of the Bill, including new clause 11 itself, refer to a person who

“knows, or ought reasonably to know”.

That formulation might be used to fill the gap—if I have interpreted the measures correctly and there is a gap. Basically, my point is that if persons further down the line know full well that they will be asked to do activities for Government X—albeit via an intermediary—perhaps that obligation should be placed on them.

It is not clear how the criteria specified in new clause 12 would amount to an offence. Clearly, the intermediary would be committing an offence for arranging various activities without having registered them, but they are away in country X, so there is no chance of our enforcing the law against him or her. Are industry experts in the UK who have been corralled into the organisation by that intermediary committing an offence by undertaking activities that the intermediary has not registered? That comes down to the question of whether they are acting

“pursuant to a foreign activity arrangement”,

but it is not clear that they are. A little more clarity on that would be useful. Would it depend, for example, on their state of knowledge?

The Minister suggested that new clause 13 could close a gap, but it does not apply to Governments for a start, so it does not fill the hole that we are talking about. If it is not a Government who have been specified but another company, there are questions about whether that company would bother to comply with the measures and about how the measures would be enforced anyway.

More profound concerns about the enhanced tier, including the diplomatic issues and what impacts the measures might have on research and collaboration, have been raised by organisations such as Universities UK. The Government may well say, “That’s something we have to weigh in the balance, and if it is required for the security of the United Kingdom, tough—so be it.” However, there is provision for regulations to tailor precisely the list of activities that could be exempted on a country-by-country basis, and I would be interested to know the Government’s thinking on that.

What will be the process leading up to a decision to take this very serious step of designating either a foreign Government or another institution? I guess that there would have to be significant consultation about that—or would there? Would the list of activities that have to be registered be tailored depending on the country, or will the list be for everything?

The Minister said that he was delighted to bring the new clauses to the Committee. I think it is disappointing that we did not have sight of them on Second Reading. It is not as if the Government have not had time to come up with the scheme. In 2020, we on the Intelligence and Security Committee reported that the United States have had a system since 1939 and that the Australians brought in their legislation in 2018. I am delighted that we have it, but it has taken too long, and I am surprised that, even at this stage, we are still scrabbling around on the detail.

One thing that concerns me a little is that Committee stage has become a tick-box exercise. We should be able to scrutinise the proposals in detail. Most of the provision will be introduced as secondary legislation, so even when the Bill receives Royal Assent, we will not have the detail of how it will operate in practice. I say gently to the Minister that we should have more detail before the Bill reaches Report and the other place, where it will quite clearly be torn to shreds because of the outstanding issues.

The Minister referred to the former high commissioner of Australia, who said that he hoped the provisions had cross-party support. That is the problem with the way the Government have approached this entire Bill. I am not suggesting for a minute that the Minister would, but other people try to score political points by saying that one party is more concerned about national security. Certainly, my hon. Friend the Member for Halifax, my party and I have known for many years that we would not do anything that would weaken our national security. We want to enhance it. There have been missed opportunities throughout the Bill. I know that is not the Minister’s fault, because the succession of Ministers has not helped. I hope that with current things happening, we do not get another Minister before the Bill reaches its final stages.

The first part of the Bill is very sensible. Tier 1—the primary tier—is very simple. The only thing I would like to understand relates to the Australian and US systems. I hate to use a David Cameron phrase, but disinfectant is the best sunlight. Sorry, transparency’s best disinfectant is sunlight. Sorry, sunlight is the best disinfectant.

I am sorry; it is an odd quote. That will be the test for tier 1: to make sure that it is publicly available and people know it and can see. That has worked in both those systems.

I have real problems with the secondary tier. I understand what the Government are trying to do, but they are making it very complicated. I worry that we are putting in provisions that will not be helpful in practice. It goes beyond political influence, for which I think there is a need. One example is acting as a foreign intelligence officer. Those arrangements need inquiry, but we are left not really knowing, because a lot of that will be looked at in secondary legislation, and it does not apply to all countries. That will create some problems. I have already mentioned the diplomatic problems when a country is added to that list.

When I met officials yesterday I used the analogy of being put on the naughty step: there is no real understanding of what criteria would be used to do that. I have no problem with the Minister’s robustness in using this measure, but because it is getting into economics and other areas, there will be huge problems with pressures from the Department for Business, Energy and Industrial Strategy, the Foreign and Commonwealth Office and others. I would like to understand what a country would have to do to get on the naughty step.

On named countries, I am sure the Minister will not mention the exact countries today, but once the Bill secures Royal Assent, are there any countries that will automatically be added? I am sure no one will be surprised to see North Korea on it. The more problematic country is China, on which I know the Minister has strong views. That will create some problems. I am struggling to understand which countries will end up on this tier.

How will the list work in practice? If the Minister were to put a country that is hostile to us on this list, that is one thing, but what happens if the relationship with that country changes? The example I gave to officials was Iraq. During the Iran-Iraq war, it was our ally. When it invaded Kuwait, it was certainly not our ally. What would be threshold to take someone off that tier? What is the practical way in which that will be done?

My right hon. Friend is making a powerful case for doing things slightly differently. In the conversations we have had with officials, one of the issues we have worked through is, if our relationship changes with a country at quite a pace, how quickly could we make additions to that enhanced tier to reflect that? Some of the feedback was that it could take a number of weeks, if not months, to address that through the enhanced tier. Is that another area of consideration that we would like to get a grip on?

My hon. Friend makes an interesting point. That is why I do not think the provision will be used in practice. That is the problem and, as I have said, I am never in favour of putting such provisions on the statute book. A more narrowly defined set of criteria applied to all countries would be better than the complicated system that we have here.

The other point is about transparency. Clearly, the public record for tier 1 will be there—it is published. Why the second tier should be done differently, I do not know. The information is going to get out anyway. It is not going to be a great surprise if a company is on this list. If I was running a company and was suddenly put on the register, I would not tell people that—I would not tell the investors and shareholders. I do not understand why the Government are treating the second tier differently from the first tier.

May I interrupt with a point of fact? Any company that is designated under the highest tier will be public by definition. That element will be public. It is the UK element that is having to register. The right hon. Gentleman gave an example of a completely spurious French company, which would of course never be on the enhanced list, as we are such good allies with the French. That company would be publicly declared. That is not the bit that is being kept out of the publication. It is the UK element registering it.

Why not include the UK company? I do not understand why there are different levels in the two schemes.

I support the measure—when we did the Russia report, the right hon. Member for Dundee East and I were very clear that there was a gap, where international partners had provisions and we did not, so this is welcome. I just think that the Government are making it unnecessarily complicated.

I press a final point about secondary legislation. More information about how the measures are going to work in practice before the Bill gains Royal Assent would help the process.

I endorse what my right hon. Friend has just said about the complexity of the proposed scheme, which concerns me as well. I very much favour our having a scheme, and I think we should have had one sooner. It is a shame that we were not able to see on Second Reading what was being proposed, because we could have had some of these debates at an earlier stage, when there was still a chance to make changes.

I have a concern about the two tiers being different. It is confusing and complex—much more confusing and complex than it needs be. It might have been more effective to have one tier applying to all countries, and a broader range of covert activity specified as having to be registrable. That might have then meant we would have needed more exclusions, but it would have had the benefit of being simple, straightforward, transparent, all on a level and more obvious, both to those to whom it applies and to those who wish to see the benefit of being able to consult the publicly available information, from a transparency point of view.

It is hard to understand the need for this level of complexity, particularly when it comes to the second tier. Why is the registration of harmful activity outside political influencing, some of which is worse than political influencing, only registrable when a foreign power is set out in the secondary legislation? What we are doing is putting an additional burden on the Government. The Security Minister might always be up for registering the right companies and organisations and countries, but he has got to persuade the whole Government. Other Departments have their own interests and their own work to pursue, which could be made much more difficult by designating in this manner. We seem to be setting ourselves a barrier that might be quite hard to overcome. The eventual outcome of the discussions within Government might not be in accordance with the best security interests. I am not talking about this particular Minister or this particular Government, but there are always competing issues and concerns.

Ordered, That the debate be now adjourned.—(Miss Sarah Dines.)

Adjourned till this day at quarter-past Two o’clock.

Trade (Australia and New Zealand) Bill (Third sitting)

The Committee consisted of the following Members:

Chairs: †Mark Pritchard, Derek Twigg

Afolami, Bim (Hitchin and Harpenden) (Con)

† Bowie, Andrew (West Aberdeenshire and Kincardine) (Con)

† Britcliffe, Sara (Hyndburn) (Con)

† Clarkson, Chris (Heywood and Middleton) (Con)

† Duddridge, Sir James (Minister of State, Department for International Trade)

† Esterson, Bill (Sefton Central) (Lab)

† Fell, Simon (Barrow and Furness) (Con)

† Gibson, Peter (Darlington) (Con)

† Greenwood, Lilian (Nottingham South) (Lab)

† Griffith, Dame Nia (Llanelli) (Lab)

† Hendry, Drew (Inverness, Nairn, Badenoch and Strathspey) (SNP)

† Holden, Mr Richard (North West Durham) (Con)

† Jenkinson, Mark (Workington) (Con)

Lloyd, Tony (Rochdale) (Lab)

† Mullan, Dr Kieran (Crewe and Nantwich) (Con)

† Qaisar, Ms Anum (Airdrie and Shotts) (SNP)

† Russell-Moyle, Lloyd (Brighton, Kemptown) (Lab/Co-op)

† Thomas, Gareth (Harrow West) (Lab/Co-op)

† Vickers, Martin (Cleethorpes) (Con)

Sarah Thatcher, Huw Yardley, Committee Clerks

† attended the Committee

Public Bill Committee

Tuesday 18 October 2022

(Morning)

[Mark Pritchard in the Chair]

Trade (Australia and New Zealand) Bill

Before we begin, may I make a few announcements? Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes@parliament.uk. Please make sure your phones and other electronic devices are switched to silent mode.

We will now begin line-by-line consideration of the Bill. The selection list for today’s sitting is available in the room. It shows how the selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or similar issues. Please note that decisions on amendments do not take place in the order they are debated, but in the order they appear on the amendment paper. The selection and grouping list shows the order of debates.

Decisions on each amendment are taken when we come to the clause to which the amendment relates. A Member who has put their name to the leading amendment in a group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments within that group. A Member may speak more than once in a single debate.

At the end of a debate on a group of amendments, I shall call the Member who moved the leading amendment again. Before they sit down, they will need to indicate whether they wish to withdraw the amendment or to seek a decision on it. If a Member wishes to press any other amendment in a group to a vote, they need to let me know.

Clause 1

Power to implement government procurement Chapters

I beg to move amendment 19, in clause 1, page 1, leave out subsections (2) and (3).

It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the Minister on being knighted. [Hon. Members: “Hear, hear!”] It is a pleasure to see him and, indeed, his fellow members of the anti-growth coalition in their places this morning.

Labour Members had hoped that the Bill would provide an opportunity for a much bigger debate on the entirety of the trade agreements with New Zealand and Australia. Sadly, however, the way in which the Bill has been drafted means that it is only the procurement chapters of those agreements that we will be able to debate. I shall illustrate why this is a restrictive approach. There are more than 2,500 pages in the Australia deal—a member of my staff has counted them—but only 30-odd of them are on Government procurement. The New Zealand trade deal has fewer pages, but there are more than 500 of them, with only 30-odd pages on Government procurement. Our opportunities to scrutinise are, therefore, far more restrictive than the House would have liked. None the less, we will raise one or two of the concerns that have been put to us about the Government procurement chapters of both deals.

I should stress at the outset that we welcome increased trade with Australia and New Zealand. They are key allies led by strong, progressive, effective leaders in Anthony Albanese and the incomparable Jacinda Ardern. Their legal systems and value systems are similar to ours, and it makes enormous sense to deepen the economic ties between us.

Our concerns about the procurement chapters arise from the fact that the now Prime Minister appeared to be in a bit of a rush when negotiating both deals. Perhaps one or two mistakes were made and a deal of insufficiently high quality was secured. Members will remember the context in which the Australia deal in particular was negotiated. The flaws in the deal that the now Prime Minster had negotiated with Europe were becoming very obvious, and Ministers were clearly desperate to divert attention from them by negotiating a deal with Australia.

Amendment 19 seeks to delete subsections (2) and (3) from clause 1. Those subsections allow Ministers to extend specific provisions that are included in the UK-Australia and UK-New Zealand agreements, and which go beyond provisions of the Government procurement agreement to all covered procurement. They also bring procurement within the scope of the GPA and other UK trade treaties. These GPA-plus provisions of the UK-Australia free trade agreement could be made part of domestic law and would apply to all suppliers, not just those from Australia. On the GPA-plus elements of FTA clauses relating to estimating values of contracts without a fixed term, the UK-Australia FTA requires that all contracts with unknown value are deemed as covered procurement. Other examples of the so-called GPA-plus provisions that this clause makes available to all suppliers include the advertisement of procurement opportunities and the termination of awarded contracts.

Our amendment seeks to prevent Ministers from quietly slipping into law measures that they have negotiated as part of the trade agreements with Australia and New Zealand, in particular the procurement chapters, that they suddenly think should apply generally. The specific concern that has been brought to our attention relates to contracts of unknown value and length.

Let me go into more detail, to help the Minister and the Committee to understand those concerns. Under current UK rules, contracts of an unknown duration or without a fixed term are advertised only if their estimated cost over 48 months exceeds the relevant value threshold. Under the free trade agreement with Australia, those contracts always have to be advertised. To give effect to the FTA, our domestic UK law will have to be reformed as a result of this Bill.

That surely raises two issues. First, more contracts will have to be advertised, and that will benefit not only Australian tenderers but all tenderers in countries that are members of the Government procurement agreement. That is because the contract opportunity will be advertised online and will be in English. I will explain shortly why that raises concerns. Secondly, domestic legislation is being reformed as a result of free trade agreement, which gives rise to the question whether a trade discussion is the most appropriate way in which to address reforming UK contract law. It certainly gives rise to the question of how much consultation Ministers have had, not only across Government but with business, industry and others who might be affected.

Why does the Minister think it is a good idea to extend to very other member of the GPA the so-called GPA-plus provisions negotiated as part of the Australia trade deal? That gives rise to an obvious question: does it mean that every other member of the GPA will offer us the same arrangement?

I have been describing the concerns in technical detail, so let me give some specific examples to bring the concern to life. On contracts of unknown value, a contract for office printing—a pay-as-you-go service—would come under the scope of the concerns put to us. Let us imagine that a local authority did not want to buy or lease printers, but rather preferred an all-inclusive service comprising availability of equipment, maintenance, help-desk services and supply of paper and other consumables. The contractor would be remunerated on a per-printed-page basis—a pay-as-you-go price. Let us say that the contract was for five years and that the contracting authority—a council on its uppers, perhaps, one like Northamptonshire that had either gone bust or very nearly gone bust—had provided an estimate of the average number of pages printed over the last few years, so as to allow tenderers to price their offers up. However, the contracting authority would not know the total value of the contract at the time of advertising because future consumption could vary.

We have been given similar scenarios that could emerge from cloud computing services. In the cases that I have described, regulation 6(19)(b) of the Public Contracts Regulations 2015, which apply at the moment, requires the contracting authority to calculate a likely monthly value of the contract and multiply it by 48 months. If that estimate exceeded the relevant threshold, which is currently just over £213,000, the contract would have to be advertised. If the estimate was below that threshold, it would be possible that no advertisement was required. If the contract was estimated at below £25,000 in value for the next 48 months, there would be no obligation to advertise the contract opportunity at all. The contract could be directly awarded by the local contracting authority, perhaps following a request for tenders to two or three local small and medium-sized enterprises.

Conversely, under the requirements of the UK-Australia free trade agreement’s procurement chapter—paragraph 9 of article 16.2—given that the total value of the contract over its entire duration is not known in the example I gave, there would be an obligation to advertise the contract. Surely that would reduce the chances of local small and medium-sized businesses getting the contract. There seems to be a clear negative potential effect for SMEs that seems at odds with the Government’s declared policy of boosting SME access to public contracts. Paragraph 13 of the national procurement policy statement refers to that, and paragraph 10 notes as a strategic priority the need to improve

“supplier diversity, innovation and resilience”.

It explicitly refers to the goal of creating a more diverse supply chain to deliver the contracts that will better support start-ups and small and medium-sized businesses in doing business on public sector contracts.

The Minister will remember the clear evidence we heard last Wednesday from Lucy Monks, the Federation of Small Businesses representative, who said:

“Small businesses have problems accessing public procurement in the UK as it stands, because they find it technically difficult. They obviously do not have the ability to take the same kind of risks as larger businesses. They might not have the technical departments, lawyers or whoever might support them through that process.”

She went on to spell out, in even starker terms, that

“small and medium-sized enterprises are basically underserved in the UK procurement processes”.––[Official Report, Trade (Australia and New Zealand) Public Bill Committee, 12 October 2022; c. 5.]

SME representatives are already expressing serious concerns that the people they represent are struggling to win sufficient UK Government contracts. It appears that under clause 1(2) and (3), Ministers are about to make the situation even more difficult for SMEs. That is particularly the case because it is not just Australian and New Zealand businesses that might want to try to win these contracts in future; every other member of the Government procurement agreement could also bid for these contracts.

Although it might seem unlikely that GPA members such as firms based in Hong Kong would want to bid for contracts of unknown value, a business based in the Republic of Ireland, which is part of the GPA, could conceivably think, “Well, now we’ve got an opportunity to bid for a contract in Northern Ireland, Scotland or Wales. It is within the realms of possibility that we could win that contract and offer it for our purposes.” I gently emphasise to the Minister that he needs to explain not only to the Committee but to SMEs across the UK, which are at the moment able to secure contracts of unknown value and length, why he thinks it is in the interests of our country to make it more difficult for them to do so.

If the printing example has not helped the Committee enough, let me give another example from a different economic sector. The Minister will understand just how important procurement is as a means of supporting the UK’s food and agricultural industries. To be fair to the Prime Minister, even she understood that role very clearly when she was in a previous role as the Secretary of State for Environment, Food and Rural Affairs. She published a plan for public procurement, which was designed to help SMEs to win contracts, especially SMEs from the food and agricultural sector.

Public procurement in this type of situation could sometimes involve the direct delivery of agricultural products, perhaps bought in bulk by local government, but that is less likely than the outsourced provision of meal services for schools or the NHS. With that in mind, tenders for meal services can and increasingly tend to include supply chain considerations that can support local agricultural industries through criteria in the contracts that schools and local NHS hospitals set. That involves shortening the supply chains, perhaps as a way of reducing carbon footprint. Again, that is something that one would have thought we all wanted to continue supporting.

Contracts for meal services can be very difficult to price at a tender stage, especially if there is an element of price competition, which is the norm. It might be surprising that school meals are very difficult to price. However, my own offspring often change their minds over whether they want a school meal or a packed lunch, and I imagine that that scenario is mirrored in families across the country. That makes it difficult for those who are setting the tender terms for meal services to be able to guarantee a set amount of products.

I followed the hon. Gentleman’s printing example, in the main, but on school meals, is he just being illustrative? I cannot quite see how the meals that my children have at their school might be contracted out and delivered from Australia or New Zealand.

Let me come on to the example. I am not saying that at all; absolutely, it is highly unlikely that an Australian firm will decide that it wants to rush over and provide schools in Southend or Harrow with meals. That is difficult to see. But it is not difficult to see that a business based in Ireland might think it could provide services in Northern Ireland. It is also not beyond the realms of possibility that it might think it could offer the same terms in Scotland and Wales, such is those countries’ relative proximity.

The Minister is saying that, under the agreement that the Government have negotiated, the opportunity to advertise contracts of unknown value will be extended not only to Australia and New Zealand but, effectively, to every GPA country. Businesses based in the Republic of Ireland will be made aware of contracts across the UK, and more easily able to bid for them as a result, making it that little bit more difficult for small and medium-sized enterprises based in Northern Ireland, or in Scotland or Wales, to win those contracts.

The other concern that has been put to me in relation to these examples is that the activation of the FTA could generate significant legal uncertainty about the compatibility of supply chain considerations that prefer UK produce over Australian produce, especially where the Australian produce has been given extensive market access under other chapters of the FTA. The practical impact of the duty to advertise would be a risk of a reduction in the likelihood of UK-based SMEs, offering UK-grown produce, winning the contract. The Minister might think that is a good thing, but given the difficulties that SMEs have in winning contracts for Government procurement, why has he made the judgment that all contracts of unknown value should be advertised online and in English, and therefore available to all members of the Government procurement agreement to bid for? Why are we making it that little bit more difficult for British SMEs to win contracts?

I want to ask the Minister some other questions related to the clause, and in particular to the issue of contracts of unknown value and length having to be advertised online and in English. What consultation did his Department have with SMEs about the clause? Is it the case that we were rule takers, and the Australians insisted on its inclusion in the FTA? Given that the benefits will extend to every other GPA country, has he had any discussions with those countries about whether they might now offer the same terms to the UK? What assessment have the Government made of the impact of contracts of unknown value and length being advertised online and in English to all GPA members? What impact does he think that will have on the desire of all of us to see more buying of British produce, goods and services? We on the Labour Benches are strong enthusiasts for “buy British” campaigns, so it would be good to hear the Minister’s assessment of the damage to that aspiration.

I briefly flagged the issue of legal uncertainty. The Minister will know about, and may be directly involved in, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership accession talks. Does the CPTPP procurement chapter include similar provisions? If we accede to the CPTPP, that will trump the Australia and New Zealand FTAs; businesses that have got used to operating in this new context might suddenly find there is a whole series of new rules they have to adjust to very quickly, and may not realise that the Australia and New Zealand FTA provisions that were negotiated under the procurement chapter have been jumped as a result of our accession to the CPTPP.

I am interested to hear the Minister’s responses to the concerns that have been put to us about the extension beyond Australia and New Zealand of this series of provisions. No doubt they were negotiated with the best of intentions, to improve opportunities for Australian and New Zealand businesses here, and for UK businesses in Australia and New Zealand, but they might—inadvertently or otherwise—have a series of other consequences that could damage the ability of British SMEs to win procurement contracts here.

If colleagues would like to remove their jackets, they can—it is rather warm in here. I remind colleagues to put their electronic devices on silent. I call Bill Esterson.