House of Lords
Monday 7 February 2022
Prayers—read by the Lord Bishop of Chichester.
Building Safety Defects
To ask Her Majesty’s Government, further to their announcement on 10 January that property developers must pay for remedial work to fix unsafe cladding, how the new measures will help residents of properties with building safety defects that are not related to cladding and for which the residents are not responsible.
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I am sure the whole House will join me in congratulating Her Majesty on her 70 years on the Throne and her service to our country and the Commonwealth. I draw attention to my interests as set out in the register.
My Lords, industry must fix the buildings that it was responsible for developing. The Building Safety Bill will protect leaseholders from remedial costs beyond the removal of dangerous cladding by providing a legal requirement for building owners to exhaust all ways to fund essential building safety works before passing on costs to leaseholders. Building owners must provide evidence that this has been done. If this does not happen, leaseholders will be able to challenge these costs in the courts.
My Lords, I have been raising these matters for some considerable time, so I thank the Minister and acknowledge that progress has been made. Having said that, more needs to be done. I heard what he said about the courts, but I want to hear what the Government are going to do. What specific enforcer measures will be deployed to deal with building owners and developers who refuse to take reasonable action to correct mistakes and poor construction, to deal with fire safety failures, to make their buildings safe and to protect the people living in them—whatever tenure they hold?
My Lords, I salute the tenacity of the noble Lord. He will understand that next Monday will be a very special day: it will be the day he writes a card to his wife, the noble Baroness, Lady Kennedy, but it will also be the date when we will see a series—a slew—of amendments from, I am sure, the Labour Party, the Liberal Democrats, the Cross Benches, my noble friends behind me and also from the Government as we reach Committee on the Building Safety Bill. We have two objectives in mind: to protect leaseholders and to ensure that the polluter pays. We are starting a process to encourage voluntary contributions, but we are very clear that, if they do not pay up, there will be measures in law to make sure that they do.
My Lords, I welcome the very positive statement that my noble friend has just made, and his personal role in making the progress that has just been announced. On 10 January, the Secretary of State said in another place:
“First, we will make sure that we provide leaseholders with statutory protection—that is what we aim to do and we will work with colleagues across the House to ensure that that statutory protection extends to all the work required to make buildings safe.”—[Official Report, Commons, 10/1/21; col. 291.]
Can my noble friend confirm that that is the case and that protection extends beyond cladding replacement?
My Lords, I do not want to pre-empt 14 February, but it is very clear that, from Florrie’s law, which sought to protect leaseholders from high-cost building safety and remedial works, there will be a principle which protects leaseholders. I thank my noble friend for raising this issue.
But there is still nothing in law, is there? The Government are talking large and saying, “From round the House, there’ll be lots of good ideas and householders can take these companies to court”. But why does the Government not set the law? Instead of expecting us to do their work, why not do the work themselves and make the rules?
My Lords, I am used to the interventions from the noble Baroness. I had four years of it in City Hall and it is nice to join this great place and continue where we left off in 2016. However, I believe there is a process, which is getting Royal Assent. It is very clear that the passage of the Building Safety Bill is critical to ensure that we have those protections for leaseholders and that the polluter pays.
My Lords, there is a big difference between protecting leaseholders and ensuring that they do not pay a penny piece for wrongdoings that were none of their making. Will the Minister give an absolute guarantee that leaseholders will not have to pay a penny piece, whether or not it is after the Building Safety Bill has passed into law? As for leaseholders who have been forced into bankruptcy or those who have already paid their bills, will they still have to pay or will there be compensation?
My Lords, it is very clear that we must differentiate the need to protect leaseholders from finding the funds to pay for these buildings. That is why my right honourable friend in the other place has sought to raise, voluntarily in the first instance, some £4 billion for medium-rise cladding. But we need to look at how we protect the leaseholder and get the polluter to pay. For the detail, as I say, noble Lords will have to wait until Valentine’s Day.
My Lords, have the Government learned their lesson about being so dependent on the industry when they are making building regulations? Is there not a need now to increase the public ability to set these regulations and not depend on the industry itself?
My Lords, that is a very good point, in the sense that we need to have a proper relationship with industry. We need to recognise that, in order to build homes—frankly, we do need great developers and good construction companies to do that—but we need to ensure that the regulatory system works. One of the reasons for Grenfell was the total failure in the regulatory system, from Whitehall right through to local authorities. Again, that is why we need the Building Safety Bill.
My Lords, while we all hope that the Government will hold developers and industry to account for paying for the remedial work, not just in due course but promptly, will that include and be backdated for waking watch payments that were and are required because of the unsafe cladding and other safety defects and which do not appear to be covered by the Secretary of State’s announcement of £27 million for fire alarms on 27 January?
My Lords, I cannot give a guarantee around retrospective application, but through these measures we are ensuring that many hundreds of thousands of leaseholders do not face eye-watering bills. These measures are about ensuring that that does not happen.
Is my noble friend aware that this problem has been with us for over four years? Is he confident that this demand that Her Majesty’s Government are making on the construction industry is the right way forward? Using the law, as every Member of this place knows, takes an awfully long time. Would it not be better if everyone sat down round the table and found an answer without implying the use of a new law?
My Lords, that is an incredibly helpful point, because in fact it is exactly what I did on Friday. On Friday we sat down to a virtual meeting with the developers and sought precisely that: to understand how we could ensure that we brought resolution to this crisis, which has taken over 30 years to evolve. In seeking voluntary contributions, that is precisely what is happening: engagement at every level.
My Lords, has the Minister consulted Barratt Developments? At one time, it found the premises where I live full of cladding defects and, having removed the cladding, found structural defects. The result of all this was that Barratts paid full compensation for almost all 70 tenants who were living on the premises. If it is possible for Barratts, why is it not possible for others?
There are examples where Barratt has behaved very honourably and provisioned quite a considerable sum of money. A number of the other major developers have also put provisions forward and acted, to the tune of some £1 billion. But that is not nearly enough—£1 billion will not deal with a crisis that extends far beyond that. Some estimate that there has been £15 billion or more in costs. We have to recognise that this is a failure and that the polluters are very much broader than the Barratts of this world. We have to make sure that they pay.
Would the Minister accept that many of us in this House would not take the same view that he has taken about the plethora of amendments that the Government feel obliged at this stage to make to their own proposals, or about welcoming the many other amendments that have been presented by other Members of this House? Surely it is the Government’s job, when they face a problem as acute and long-lived as this one has been, to produce legislation that is implementable almost immediately.
My Lords, I respectfully disagree. The original purpose of the Building Safety Bill, which remains its primary purpose, is to fix the regulatory system that patently failed in 2017 for future buildings, and essentially to create in law a high-risk regime for high-rises, where we have seen these tragedies approximately every 10 years. We also recognise, as has been raised by many noble Lords, that we need to ensure that we protect leaseholders and get polluters to pay. That is why we are bringing forward these amendments at this time. They are two wholly different matters.
My Lords, is the Minister aware that, although some progress has been made for England under the sustained and excellent pressure of my noble friend Lord Kennedy of Southwark, there is not the same kind of progress in Scotland, which is falling behind? Will the Minister have a word with Ministers in Scotland and use his—I was going to say use his not inconsiderable weight.
My Lords, this problem extends to all four nations. I meet regularly with my counterparts in Scotland, Wales and Northern Ireland. In fact, there is quite a lot to be learned from Wales, I have to say. Indeed, I will engage and take that advice forward.
Oil Tanker “FSO Safer”
My Lords, we continue to work closely with our international partners, including through the UN and in the region, to tackle the environmental threat posed by the FSO “Safer” to the Red Sea region. We have provided technical support and expertise to the UN, and we play a facilitating role between the UN, the private sector and regional actors to drive progress on mitigating the threat. We are also working with partners on contingency planning in the event of a spill.
I thank the Minister for that Answer. We have been talking about the principle that the polluter must pay. Does he agree with the assessment from environmentalists that, should this ship degrade further, we could be looking at a disaster greater even than “Exxon Valdez”? Will the Government put pressure on the backers of the Islamist Houthi regime, who are pulling the strings and preventing this ship being given the treatment it so urgently needs?
The noble Lord is absolutely right. This would be a really colossal disaster—probably four times worse than the “Exxon Valdez” spill. It would cause irreparable damage and require clean-up costing many billions. He is also right that we urgently need the Houthis to allow the UN to make a technical inspection of the vessel. Unless and until they agree to that, the international community cannot make any meaningful progress. Houthi co-operation is therefore absolutely critical if we want to make that progress.
My Lords, the UN humanitarian co-ordinator in the region warns that the risk of imminent catastrophe is very real. As the Minister will know, clearly such a spill would disrupt trade through the Red Sea and the Suez Canal, with global effects. Above all, as he has noted, it would be disastrous in the region, closing Yemeni ports, disrupting the food aid on which half the population of Yemen depends, and affecting all sides, including the Houthis. What strategies are being taken forward to try to deliver a safe resolution to this problem?
My Lords, in addition to the answer I gave to the previous question, that really is absolutely central. Our hands are tied until there is proper, meaningful co-operation. The UK has put this on the international agenda. UK-funded research identified the threat posed by the tanker and has been used by international partners, including the UN, to underpin their assessments. We have provided £2.5 million towards UN efforts. We are supporting the UN “Safer” working groups by providing a technical adviser to help them develop their mitigation and contingency plans, and much more besides. Fundamentally, we need to stop this happening, because the effects will take many years and costs vast sums of money to recover.
My Lords, I return to the fundamental question. The United Kingdom is a penholder on the UN Security Council. This ship has been there for five years and is being used as a weapon in itself. We have a responsibility at the Security Council to support the peace process, so can the Minister tell us exactly where we are now? What is the United Kingdom doing to ensure that we end this terrible humanitarian crisis in Yemen and move towards a peace process that works?
My Lords, there are numerous moving parts. It is worth pointing out that we remain one of the biggest donors to Yemen, contributing more than £1 billion since the conflict began. We remain very concerned by the situation there and continue to support the UN-led efforts to end the conflict. We believe that a negotiated political settlement is the only way to bring long-term stability to Yemen. To deal with this particular part of the conflict—this potential crisis—the UK is working closely with the UN donor group consisting of the Netherlands, Sweden, Norway, France and Germany to support UN efforts to resolve the risk posed by the “Safer”.
If I heard the question correctly, plans have been put together with UK support to do precisely that—to try to shift the oil from this tanker to another—but that is not possible without co-operation across the board. I refer the noble Lord to my first Answer.
My Lords, to follow on from the noble Lord, Lord Walney, the answer to this possibly lies through those who control the Houthis. We all know that they are dependent to a large degree on Iran. We have diplomatic relations with Tehran; we sometimes forget that. Can the Minister say what representations our ambassador in Tehran has made to the Government there to solve this crisis?
My Lords, the UK is using every avenue we can. The noble Lord mentions one; there are others. The UK is now playing an important role in supporting a commercial initiative to resolve the issue. We supported local Yemeni partners to develop a feasible initiative, which they have been negotiating directly with the Houthis in a way that others would struggle to do. Along with the Dutch Government, the UK has been foremost in rallying the international community behind that commercial initiative, including securing support from Saudi Arabia and the Government of Yemen.
My Lords, following on from the two previous questions, it is also worth noting that we must use every endeavour to ensure that no rockets or missiles land in Riyadh or any city in the Emirates. Is the Minister minded to say a word about that situation?
My Lords, the noble Baroness referred to many of the disastrous impacts that will happen if this oil leaks, spills or causes an explosion. I am sure the Minister is aware that the Red Sea is a crucial coral reef area. Indeed, with the warming climate and seas, it is a real area of refuge where, it is hoped, coral reefs could survive even if they die out in other areas. Is the Minister confident that enough is being done to contain the damage? It does not necessarily require Houthi agreement for containment mechanisms to be put in place in the region. More than that, we have heard lots of discussion about “polluter pays”. What contribution are oil companies making to the mitigation effort?
I will give the noble Baroness an example. There was a false alarm, if she remembers, a little over month ago, on 27 December, of a spill from the pipeline connected to “Safer”. The reaction to that—thankfully, false—alarm demonstrated how quickly the international regional community could respond if that were to occur. Due to our close co-ordination with, and support for, our allies, we were quickly able to confirm that there was no leak. I stress that, no matter how good the contingency plan, the disaster would be very real irrespective. Therefore, the priority has to be to try to stop it from happening.
Criminal Justice: Royal Commission
My Lords, as I said in answer to the noble Lord’s Question on 6 July last year, due to the pandemic, we slowed work to establish the royal commission. Significant new programmes of work were established to support recovery and build back a better system. In the last six months, we have undertaken several new programmes, and our focus is on delivering these priorities over the coming months.
My Lords, I thank the Minister for that reply. I make no apologies for asking the Question again, because, as I have said before, I regarded it as extremely discourteous of the Government to ask Her Majesty the Queen to make an announcement which they had no intention of implementing. I had no notice of the intention of the noble Lord, Lord Bach, to bring up this matter on Report on the police Bill. I invite the Minister to say what he said in reply to that intervention.
My Lords, since the Queen’s Speech in 2019, there has been the small matter of a global pandemic, which has affected the criminal justice system very substantially. We reacted to that: we put in place particular new ways of working. We have taken a lot of that work forward: there is the Second Reading this afternoon of the Judicial Review and Courts Bill, which contains more reforms to the criminal justice system. I therefore think, with respect, that it is a little unfair to say—in fact, it is inaccurate—that we have no intention of implementing that. As to what I said in response to the noble Lord, Lord Bach, in Committee, I stand by that, absolutely.
My Lords, in the Council of Europe’s recent report on penal matters, England and Wales scored very high in a number of categories, including prison population, prison density, suicide rates, the proportion of prisoners not serving a final sentence and the rate of admissions per 100,000 inhabitants. It is almost a world-beating record. Will the Minister ensure that the terms of reference of any royal commission that is set up include an in-depth consideration of sentence inflation in our courts?
My Lords, one of the other things on which we score extremely high internationally is the quality of our judges. That ought to be mentioned as well. So far as prisons are concerned, we published a prisons White Paper in the last six months, which deals with a number of the matters raised by the noble Lord. As to the terms of reference of any royal commission, of course I have heard what the noble Lord has said.
My Lords, I refer to my interest as director of the Sikh prison chaplaincy service. Reducing reoffending should be a central aim in any criminal justice system. Does the Minister agree that chaplains of all faiths can play an important role in this by giving purpose and direction to offenders? Does he further agree that there should be equal access to resources and pastoral support for all faiths in a truly multifaith chaplaincy and probation service?
My Lords, I am grateful to have the opportunity to express real gratitude for the work done by prison chaplains, particularly during the pandemic when the chaplaincy had to move from face-to-face to telephone or video conferencing. Access is of course ultimately a matter for prison governors, but if the noble Lord has particular concerns in this area, he knows that he can speak to me; I am very happy to have a discussion with him.
My Lords, disproportionate outcomes for racially minoritised people in the criminal justice system are well documented, including of course in the Lammy review. Does the Minister agree that care should be taken to prioritise these concerns through the royal commission?
My Lords, I have said on a number of occasions from this Dispatch Box that racial inequality in our criminal justice system goes back many decades. We are absolutely focused on it, and I am sure that any royal commission in this area would want to look at it.
My Lords, the pandemic demonstrated more clearly than ever the importance to prison morale and effective rehabilitation of family and other significant relationships. Benefits to prisoners of access to video-calling technology have also been proven. Building back better requires sharpening the emphasis on the third leg of the rehabilitative stool of relationships. Will this and access to technology, as an obvious requirement in a world that is being transformed daily, be key principles in the royal commission?
My Lords, we know that prisoners who maintain contact with their families and communities behave better in prison and have lower reoffending rates when out of prison. During the pandemic, we rolled out video-calling technology to all prisons. We have committed to retaining this long term.
My Lords, I am afraid that I cannot go further than what I have already said. We are looking at it, and we want to make sure that we maintain our current programmes. In the last six months we have published a victims consultation, the prison White Paper and national criminal justice scorecards. We have the Judicial Review and Courts Bill this afternoon, and there is a consultation on juries in the consultation on human rights. That is not too bad, for the last six months.
My Lords, a significant proportion of people on community sentences report having mental health or drug addiction issues, yet very few of those community sentences include mental health or drug treatment requirements, partly because these services are simply not available in many areas. This must change if we want community sentences to be fully effective in helping offenders turn their lives around. Will the royal commission on criminal justice include a review of community-based sentencing?
My Lords, I am reluctant to write the terms of reference for the royal commission from the Dispatch Box, but we do know that such services are absolutely essential for people who have come out of prison. My department works closely with the DHSC to ensure proper join-up when people leave prison, so that they can access services in the community.
My Lords, might it not have been sensible to write the terms of reference for the royal commission in 2019, when it was announced? I do not see how Covid would have prevented the establishment of a royal commission, or how any of the splendid initiatives my noble friend has mentioned would have prevented the commission operating. This an independent group to look at the whole thing across the board, and which does not reflect the Government’s views but looks at all the arguments, surely.
My Lords, as I understand it the royal commission would need significant resource from the department. The people working on the royal commission were deployed on other work during the pandemic, and that is what they are still doing. The last royal commission was one on this House, and it reported in 2000. I hope that that has not put us off royal commissions in principle. We are still focused on having a royal commission on criminal justice in due course.
My Lords, could we consider the possibility that we are looking at crime and prisons in the wrong way? There is a lovely printing term, arsy-versy—which is not a rude word. Can we not recognise that, for a specific period, we have a captive audience and we could change them? Many people who have come out of prison have been useful to the community. We need learned experience to help us in the world of crime.
My Lords, I can only agree with that. We have recently looked very carefully at our education programme in prisons, which has undergone an absolute revamp. Minister Victoria Atkins in the other place has had a lot to say about that. Prison is an opportunity to turn lives around. In addition to punishment, we must never forget that part of it is about rehabilitation.
My Lords, following parliamentary approval, the Highway Code was revised on 29 January 2022 to include alterations to improve safety for cyclists, pedestrians and horse riders. Changes relating to the use of hand-held mobile phones in vehicles were laid before Parliament on 1 February. Further changes covering the use of self-driving vehicles are planned and will be laid before both Houses of Parliament later this year.
My Lords, would it not be a good idea to present all the changes to the Highway Code and consult on them in one go to prevent a piecemeal approach? Do I not have the expectation as a pedestrian to be able to walk safely along a pavement without the risk of being mown down by e-scooters? For what reason are e-scooters still excluded from the Highway Code? When do my noble friend and the department imagine that death and injury caused by cyclists and e-scooters will be put on the same basis as other motoring offences?
Many questions, to which I hope to give at least some response; I am grateful to my noble friend. If we could bring everything together and lay it before Parliament all at once, that would be marvellous, but the reality is that these things happen over a period of time. We do not want to delay certain elements that we can get out of the door. For example, noble Lords will know that we changed the Highway Code back in 2021, making some alterations for smart motorways to include red X stoppages. We have changed and will continue to change the Highway Code, because the situation on our roads is developing very quickly. My noble friend raised the issue of e-scooters which, as noble Lords know, are currently illegal except for the temporary trials. That is why they are not in the Highway Code.
There has been a huge amount of coverage of the new Highway Code, for which we are extremely grateful, and there will continue to be coverage. But I am afraid there has been an awful lot of hot air as well, because the changes are actually not that significant. If, as a pedestrian, you start to cross the road, you already have priority; there has been no change in that regard. There was already guidance as to where cyclists should ride on the road; we are just clarifying what is reasonable and what is not. I am content that there is an awful lot of coverage at the moment. There will be more paid-for coverage by the department when we launch our campaign.
My Lords, it is reported that the Government are considering, as a so-called Brexit freedom, refusing to implement EU standards on better sight lines for buses and lorries so that they do not crush cyclists and pedestrians, and better braking for cars. Did taking back control mean more dangerous roads and less safe vehicles? This seems in direct contravention to the alleged purpose of the changes in the Highway Code.
I am grateful to the noble Baroness for raising that matter. I think what she is talking about—although I suspect there are a few things muddled up there—is the EU safety package. Of course, that has not yet been mandated in the EU. Ministers are considering what we will do, and we will make the right decision for the safety of everybody on British roads. It has got nothing to do with Brexit or otherwise, frankly; we will be deciding for ourselves.
I am grateful to my noble friend for raising one of my favourite topics. He will know that we have done an enormous amount of work on smart motorways. They are one of the most scrutinised types of roads in the country, perhaps even the world. We have committed that we will not continue to construct new smart motorways until we have all the safety data on those opened before 2020m, which will be in 2025. At that point, we will consider where we take smart motorways, but they are as safe, if not safer, in the vast majority of the metrics we use to look at safety on our roads.
Absolutely, and I am not sure I agree with my noble friend about criticism. The reality is that 21,000 people responded, for example, to the most recent change to the Highway Code and 70% of those self-identified as motorists. Between 68% and 96% of them agreed with the various elements that we put in place. I recognise that concerns have been raised. I am happy to address those concerns, but I do not think that this change is a poor one and, to answer my noble friend’s question, there will be more changes coming, as I have set out.
My Lords, can the Minister say why recommendations proposed by British Cycling to explain reasons for cycling two abreast and to protect the right to do it, which were rules 66, 154 and 213, were not adopted in full? Will this omission not lead to many drivers still questioning the right of people cycling side by side, which is safer for all road users? Will the Minister agree to meet representatives of British Cycling and Cycling UK to look at this again?
I am afraid that I will not commit to meet the cycling lobby again because there was an opportunity for all the stakeholders to input into the consultation. A correct balance has been met. The motoring organisations were there as well, and we are content with how we have resolved the situation around riding two abreast. We say that you can ride two abreast but be aware of drivers behind you and let them pass. It is about getting all people on our roads to act in a very safe and considerate manner.
My Lords, I am appalled that the Minister finds the criticism of the Highway Code and particularly how it has been introduced to be just hot air. I am very sorry that she is content; I believe she should be deeply dissatisfied. To dismiss the changes in the Highway Code as not significant is almost as if she has not read them. It is a very important modification. It requires road users to do things differently. It means that different people have different rights of way. The Minister should not shake her head—that is exactly what it requires. Where two road users both believe they have the right of way, it is potentially catastrophic.
The changes to the Highway Code are designed to make the roads safer but they are completely undermined by the lack of public awareness. The Department for Transport said it will begin launching an awareness campaign in February. Has this now been launched, and why did Minister not begin the campaign prior to the introduction?
My Lords, there is hot air and misinformation around this change to the Highway Code; I am not going to lie—that is absolutely true. There are also situations that have existed for decades—as I have pointed out, these are quite minor changes. Where the Highway Code says “should”, that does not mean that you are required to do anything, but, if it says “must”, you are required to it. There has always been a question, since the start of the Highway Code earlier in the last century, I believe, whereby different people will sometimes have to agree who will go first—that is just life.
The noble Lord will know that we have had quite a lot of coverage on non-paid-for communications channels, which is what we are focusing on at the moment. THINK!, a paid-for £500,000 campaign, will start very shortly, and we will continue over the summer, as various different modes tick up in their usage.
I agree with my noble friend: some cyclists are absolutely outrageous when they look at red lights and assume that they are not compulsory. The Government are of course doing the roads policing review, which we will publish in due course. But the whole point about these changes to the Highway Code is that they make things safer for pedestrians. As I have pointed out, they already had priority if they had started to cross the road—there was no change there—but there have been some other minor changes that will make things clearer and safer for pedestrians.
Many noble Lords will have heard me raise this point before. I am extremely concerned about rural roads: my view is that, sometimes, motorists seem to think that they have precedence on them, but they do not, and that really concerns me. We are very clear about cyclists: if you are riding on a rural road, or indeed any road, ride in the centre if it is quiet, if there is slow-moving traffic or if you are approaching a junction. If you are on a rural road, of course you would move aside at some point, if there were a car waiting behind you. But, if you are travelling in a car at 30 miles per hour behind a cyclist who is travelling at 15 miles per hour and you are delayed for one mile, you have lost just two minutes of journey time. I sometimes think that we need to be more cognisant of the users on rural roads especially—not only cyclists but horse riders.
Private Notice Question
My Lords, the resignation of the First Minister of Northern Ireland is deeply disappointing. The Secretary of State has spoken to the Northern Ireland party leaders and the Irish Government to urge a return to stable devolved government and ensure the delivery of public services in Northern Ireland. We recognise the problems caused by the Northern Ireland protocol and will continue our intensive talks with the EU to resolve these.
My Lords, my noble friend will know that, during the passage of the Northern Ireland (Ministers, Elections and Petitions of Concern) Bill, which is currently before Parliament, it was described as a Bill to strengthen and safeguard the institutions. Actually, it has now facilitated those who are prepared to abuse the situation. Can my noble friend tell us what the Secretary of State has done to avoid this stunt, which was widely anticipated for months, in advance of the elections? Do Her Majesty’s Government intend to accede to Sinn Féin demands to bring forward the date of the Assembly elections?
My Lords, I am very grateful to my noble friend. Unfortunately, I do not share his characterisation of the Northern Ireland (Ministers, Elections and Petitions of Concern) Bill, which I believe will lead to greater resilience and stability for decision-making within Northern Ireland. Over the last few days, my right honourable friend the Secretary of State has been engaging intensively and has had a number of discussions with party leaders, Members of Parliament, Members of the Assembly and the Irish Government in order to seek a resolution of the issues that have led to the collapse of the Assembly. In particular, the Government are deeply committed to resolving the issues around the implementation of the protocol, which have caused so much damage across Northern Ireland. The legislation to which my noble friend referred should, I hope, complete its passage in the other place this evening, and we are working very hard to bring Royal Assent forward for that legislation as quickly as possible. My noble friend will be aware that the election is due to be on 5 May.
My Lords, I thank the Lord Speaker for granting this PNQ; given how important this issue is, we might have expected the Government to make a Statement. I share the view that the First Minister’s resignation is disheartening. We continue to urge the DUP to take up its place in the Executive for the remainder of this mandate. There are immediate challenges to be faced. An official public apology to the victims of historical institutional abuse was due to be delivered by the First Minister and Deputy First Minister on 11 March. What urgent conversations has the Secretary of State had with the victims, the Northern Ireland parties and the Executive Office to ensure that these victims are not let down yet again? Will the Government now take responsibility for their protocol, which the Prime Minister negotiated and put in place? What practical, long-term solutions are the Government looking at? Ministers must now ensure that Northern Irish communities and businesses have a voice in any future negotiations. I hope the Minister will tell us how this will be done.
I assure the noble Lord that discussions about the protocol have been taking place with the Northern Ireland Executive. I chaired a meeting of the Northern Ireland protocol contact group with the First and Deputy First Ministers only last week, which I think was the seventh such meeting that has taken place. There has been engagement between the Foreign Secretary and the leaders of the Northern Ireland Executive, as well as with the Secretary of State. There has been a lot of discussion around these issues. Regarding long-term solutions, the noble Lord will be aware that the Government produced their Command Paper last July. This set out some practical solutions to the issues of the protocol. The Foreign Secretary has had a number of meetings with Maroš Šefčovič. They had two telephone calls recently—one was supposed to be a meeting but, because of Covid isolation, it had to be done on the telephone. They are due to meet again this week, so the Government are taking these matters very seriously. When I was a special adviser in Northern Ireland, I did quite a lot of work on the issue of victims of historical institutional abuse. I am aware of its importance, but it is primarily a matter for the Northern Ireland Executive to take forward.
My Lords, does the Minister accept that the British Government negotiated an unworkable deal? This allows the European court—which now has no British judge sitting on it—to apply laws made in Brussels, where the UK no longer has representation. The Minister referred to negotiations. These have been dragging on and on. When will the Foreign Secretary remove these anomalies and act with some flexibility to find solutions to the problem now facing the Northern Ireland Government? This is the cause of the crisis that has just erupted.
The noble Lord might be aware that, more than two years ago, when the protocol was being negotiated, I asked questions from the Back Benches. Those are a matter of record. Rather than dwelling on how we got into this situation, I would rather focus on how we get out of it. As I said in my earlier answer, the Government are working intensively with Vice-President Šefčovič to try to find a way forward. The noble Lord will know that there is a meeting of the EU-UK joint committee pencilled in for later this month.
My Lords, critical to dealing with the post-pandemic recovery, addressing health waiting lists and making provisions for economic stability in Northern Ireland is the need to set a three-year budget and to have it ring-fenced, which requires executive decision-making and approval. The Minister will know that this cannot happen without an Executive. How will the Government—working with the Irish Government—ensure that there is immediate restoration of the Executive, and that the DUP will be told to stop their stunts and get on with the work of serving the people of Northern Ireland? What discussions did the Government have with the DUP prior to this happening last week?
I assure the noble Baroness that the Government have been having discussions—not just with one party but with parties across the Northern Ireland Executive—in the run-up to the decision of the former First Minister last week and subsequently. She raises a very important point about the budget and, of course, one of the things that has bedevilled Northern Ireland in recent years has been the single-year budgets rather than the much longer three or four-year spending reviews that we are used to here. So far as the current situation is concerned, my understanding is that the Finance Minister can bring to the Assembly a budget for the next financial year, but she is absolutely right that it is not possible now to do a three-year budget, which would have to be a priority for an incoming Executive after the election.
My Lords, the Minister is surely aware that the Northern Ireland protocol is not consistent with the Belfast agreement, the principle of consent or Northern Ireland’s constitutional position within the United Kingdom. It does not have the support of one unionist party in Northern Ireland. The Government have been given ample warning of what was going to happen and now they must deal with the problem. I do not mean tinkering with the protocol—it has to go.
My Lords, the noble Lord, Lord McCrea, raises a number of very important points, many of which are subject to a legal case currently before the Court of Appeal in Belfast, so it would not be appropriate for me to comment in detail on a number of his points. He referred to Northern Ireland’s position within the United Kingdom. Northern Ireland is very much a part of the United Kingdom, something which this Government strongly support and I personally passionately support.
My Lords, when will the Government prioritise getting a so-called SPS or veterinary agreement, which would remove a lot of the checks on food and agricultural products crossing from Great Britain into Northern Ireland? Are they not doing so because they want to keep open the option of allowing hormone-treated beef and chlorine-washed chickens into this country?
Without commenting on detail, I say that it will not surprise the noble Baroness that these matters are currently being discussed between the Foreign Secretary and the European Commission. She will be aware that the Government put forward a number of proposals in the Command Paper last year, but I urge her to await the outcome of the negotiations.
My Lords, my party leader has continually reminded the Government of promises made in the New Decade, New Approach agreement to protect Northern Ireland’s place within the UK’s internal market. The commitment was the very basis on which the Democratic Unionist Party re-entered the Executive in 2020. Regrettably, to date, this commitment has not been honoured by Her Majesty’s Government. Does the Minister agree that the Government now need to act to remove the Northern Ireland protocol, or indeed trigger Article 16?
The noble Lord, Lord Browne, will be aware—as I have said on a number of occasions—that the Government are strongly committed to remedying the defects in both the construction and the implementation of the protocol, which has led to a distortion of trade, disadvantaged consumers, led to societal problems and placed burdens on business, all of which is deeply regrettable. Yes, he has my assurance that we are committed to making progress and remedying the most obvious defects that we face.
My Lords, I remind the Minister, although he probably does not need reminding, that the last time Stormont was suspended it was down for three years, and the time before it was down for five years. I am sure he agrees that this is a very serious situation. It is critical that the Government accelerate the negotiations—I am sure there is a deal to be done—and work with the parties to get Stormont operating properly as soon as possible.
I am very grateful to the former Secretary of State for reminding me of three very painful and frustrating years of my life after the Assembly and Executive were last in a state of flux and unable to function. It is important to remind the House at this stage that the First and Deputy First Ministers have ceased to hold office, but individual Ministers remain in office and the Assembly is still meeting. I think there are something like 28 pieces of legislation currently before the Assembly, and 15 sitting days before it is supposed to rise for the election in which to try to progress a number of them.
If the legislation to which I referred earlier is to receive royal assent shortly, there will be a period after the next election when Ministers can remain in place while an Executive is formed. So the situation is not—or hopefully will not be—exactly akin to that in which we find ourselves after 2017 and the noble Lord found after the Assembly fell in 2002. There are some important differences, but I entirely take his point about the urgency to get on with things.
Yes, my Lords, it is. I know from my experience of having engaged with Irish America over the years—very intensively, I should add—of the importance of American voices in helping to promote and maintain political stability within Northern Ireland. The Secretary of State has a number of very important meetings with US government officials and Congressmen, who I believe can be very influential in these matters.
My Lords, many of us in your Lordships’ House have been warning for some time of the fundamental incompatibility between the protocol, the institutions and the Belfast agreement. Will the Minister make it clear to our Foreign Secretary—who, I think, is trying her very best in very difficult circumstances—that this incompatibility can be dealt with, and we can get the institutions back up and running in Northern Ireland, only when the protocol goes?
The noble Baroness again takes us into the territory of the court case in which she is involved regarding compatibility with the Belfast agreement, on which the Government have defended their position in court. As I hope I have stressed from the Dispatch Box over the past few minutes, the Government remain deeply committed to remedying the defects which are apparent in both the construction and implementation of the Northern Ireland protocol—absolutely.
Animals (Penalty Notices) Bill
The Bill was brought from the Commons, read a first time and ordered to be printed.
Glue Traps (Offences) Bill
The Bill was brought from the Commons, read a first time and ordered to be printed.
Down Syndrome Bill
The Bill was brought from the Commons, read a first time and ordered to be printed.
Northern Ireland (Ministers, Elections, and Petitions of Concern) Bill
Returned from the Commons
The Bill was returned from the Commons agreed to.
Business of the House
Motion on Standing Orders
That Standing Order 38(1) (Arrangement of the Order Paper) be dispensed with on Wednesday 9 February to enable consideration of the Commons Reason on the Advanced Research and Invention Agency Bill, and Report stage of the Dissolution and Calling of Parliament Bill to take place before oral questions that day.
Business of the House
Motion on Standing Orders
Building Safety Bill
Order of Consideration Motion
That it be an instruction to the Grand Committee to which the Building Safety Bill has been committed that they consider the bill in the following order:
Clause 2, Schedule 1, Clauses 3 to 21, Schedule 2, Clauses 22 to 26, Schedule 3, Clauses 27 to 42, Schedule 4, Clauses 43 to 54, Schedule 5, Clause 55, Schedule 6, Clauses 56 to 104, Schedule 7, Clauses 105 to 113, Schedule 8, Clauses 114 to 121, Schedules 9 and 10, Clauses 122 to 128, Schedule 11, Clauses 129 to 143, Clause 1, Title.
Leasehold Reform (Ground Rent) Bill [HL]
Motion on Amendments 1 to 5
1: Clause 1, page 1, line 9, at end insert—
“(but see subsection (5)).”
2: Clause 1, page 1, line 16, at end insert—
“(5) Where there is a deemed surrender and regrant by virtue of the variation of a lease which is—
(a ) a regulated lease, or
(b) a lease granted before the relevant commencement day, subsection (1) applies as if paragraph (b) were omitted.”
3: Clause 6, page 4, line 30, after first “of” insert “premises which consist of, or include,”
4: Clause 6, page 4, line 39, after “period” insert “(if any)”
5: Clause 6, page 5, line 7, after first “of” insert “premises which consist of, or include,”
My Lords, before I turn to the Commons amendments, I will take a moment to remind us all of what the Leasehold Reform (Ground Rent) Bill will do. The Bill will put an end to ground rents for most new residential leasehold properties as part of the most significant changes to property law in a generation. The Bill’s provisions will lead to fairer, more transparent homeownership for thousands of future leaseholders.
Throughout the Bill’s passage, there have been helpful discussions with Members of both Houses and with key stakeholders in the industry and from consumer groups. This has been crucial and has led to a number of refinements being made to this Bill during its stages in the other place. At our last opportunity to debate this Bill, in September 2021, changes were suggested by noble Lords to help improve it. I undertook to ensure that these would be made; and as promised, this was done. I hope that noble Lords will agree that the Bill returns to this Chamber in an even stronger position than when it left. We meet today to consider these amendments as made in the other place, and I beg to move that the House do agree with the Commons in its Amendments 1 to 9.
Commons Amendments 1 and 2 relate to the process known as a “deemed surrender and regrant.” Taken together, these amendments mean that a lease can have a peppercorn rent after it has been regranted, even where no new premium is paid. Especially for the noble and learned Lord, Lord Etherton, I can confirm the provisions in the amended Clause 6, Amendments 1 to 5, are amended also to apply in the case of a deemed surrender and regrant by operation of law where there is an extension of the term of a pre-commencement lease or the addition of further property. Commons Amendments 3, 4 and 5 are also connected to the “deemed surrender and regrant” process. But more specifically, they clarify the matter raised by the noble and learned Lord, Lord Etherton with regard to a lease variation.
As noble Lords may remember, it was pointed out very diligently that the legislation as drafted was perhaps not as clear as it could be in relation to permitted rent within leases where they replace a pre-commencement lease. The noble and learned Lord, Lord Etherton raised his concern that it was unclear whether the Bill as then drafted would require that any existing ground rent in such leases would be reduced to a peppercorn. I thank the noble and learned Lord for bringing this to my attention. I can confirm that the amendments made in the other place make it clear that, where the property demised is changed, the resulting surrender and regrant will not reduce the ground rent on the remaining term of a pre-commencement lease to a peppercorn. Any extension to the term of the pre-commencement lease will be required to be a peppercorn. Crucially, this amendment ensures that freeholders need not withhold consent for a lease variation unnecessarily. I hope noble Lords will agree this is a positive development.
I turn to Commons Amendment 6. Noble Lords will remember that on Report an amendment was passed that inserted a new clause into the Bill, the “duty to inform”. It placed a statutory duty on landlords to inform an existing leaseholder of the changes introduced by the Act ahead of commencement and linked this duty to the Bill’s enforcement penalty regime, should a landlord fail to comply. Of course, we recognise the importance of leaseholders being aware of their rights and that they are therefore not rushed into lease extensions before this Bill takes effect. I thank the noble Baroness, Lady Grender, who is not in her place, and the noble Lord, Lord Stunell, for raising the important matter of consumer awareness, which the Government take seriously.
I support the principles behind the original Lords amendment. It is vital that there is transparency in the leasehold system. However, the Government continue to have doubts as to whether placing a duty to inform in the Bill would be the most effective and expedient means of meeting the objective that noble Lords set out to achieve. We remain of the view that this can be accomplished without the need for further primary legislation. The reasons for leaving out the duty to inform include legal and practical considerations that I hope noble Lords will allow me to explain a little.
As drafted, the duty to inform, although well intentioned, is unworkable. The original amendment placed a duty on all landlords, even if they were not residential, and did not specify how each landlord may satisfy their legal duties contained within the clause. Including the clause would require the penalty enforcement process for the duty to inform to align with the rest of the Bill; for instance, the duty to inform clause provided no mechanism for landlords to appeal and did not offer a concrete explanation of the means for enforcement, such as notices and requests for written representations. To make this clause workable would take up further parliamentary time and cause delay to the implementation of the new peppercorn rents that we all want to see. Furthermore, in terms of practicality, the clause related only to the short period between Royal Assent and the peppercorn limit coming into effect. It would therefore place a quite significant burden on enforcement authorities if it was included in the Bill.
Again, I thank both the Labour Front Bench and the Liberal Democrats’ spokesperson, the noble Lord, Lord Stunell, for their recent engagement on this matter. As I have said before, they can rest assured that I agree with them on the principle behind the amendment. We all understand how important it is to ensure that these changes to leasehold law are publicised for the good of leaseholders. However, I appreciate that noble Lords may want a little more. We have looked very closely at how to achieve the objectives that informed the original new clause, so I wanted to share some of the detail on measures that we will take ahead of commencement to close the gap.
We are developing a suite of communications activities, from social media to encouraging the broader press to cover these changes. We will work closely with our partners such as LEASE, the body that provides free and independent advice to leaseholders, as well as National Trading Standards and, of course, our industry partners, to do what we can to raise awareness of the coming changes. We will also contact our friends in the Leasehold Knowledge Partnership. Everyone who can help to communicate should be brought on board. We are also preparing updates to existing government guidance for consumers and will publish new detailed guidance for enforcement officers in England. We expect Wales to produce separate guidance, which should mirror any guidance that we publish for England, and we will work closely with Welsh colleagues to ensure that we get this right.
After Royal Assent, we will write to solicitors, legal executives, licensed conveyancers and relevant professional bodies, detailing the new peppercorn restrictions. We should also contact those who represent property agents and managing agents—ARMA—as I mentioned in our discussions. Nigel Glen has a tremendous database, as does the Institute of Residential Property Management, where Andrew Bulmer can also help communicate the message.
I hope that this is reassuring to noble Lords who have raised concerns about the importance of accurate, independent legal advice to leaseholders. More generally, as part of the enforcement of the Bill, National Trading Standards will assist with advising local enforcement authorities. The department will fund National Trading Standards’ implementation costs from our budgets. We are in discussions with the Local Government Association on this. As I have stated previously, I am open to working with anyone across the House on any further activities that they believe we should pursue.
I hope noble Lords are sufficiently reassured that the Government are serious about raising awareness of the Bill among consumers ahead of it coming into force and can agree that the suite of actions we are taking represent the best course of action. On this basis, I ask that your Lordships agree to Commons Amendment 6.
Commons Amendment 7 is a further clarification, in response to concerns raised by the noble Earl, Lord Lytton, about the impact that the newly created definition of a premium would have on properties with a repairing covenant. I thank the noble Earl for raising this on Report. As noble Lords will be aware, we previously amended the Bill to make it clear that it applied only to leases where a premium was paid. This was to ensure that the legitimate practice of longer leases on a rack or market rent could continue.
The noble Earl, Lord Lytton, questioned whether that initial amendment might still risk properties let on a full repairing lease at a rack rent being subject to the peppercorn rent requirement. The risk could arise where repairing covenants might fall within the definition of a consideration for a “money’s worth” of repairs. This is not, and never has been, the intention of the legislation. We therefore removed the words “money or money’s worth” from the definition of premium and substituted them with “pecuniary consideration”. This phrase is preferable as it is broadly any consideration expressed in terms of money and will not capture the actual worth of repairs for such covenants.
Amendment 8 is a standard amendment that removes the privilege amendment inserted in the Lords. The Government made one further amendment to insert “Welsh Ministers” into paragraph 12 of the schedule. This has enabled any proceeds of a financial penalty that have not gone towards legal or administrative costs to be paid to Welsh Ministers in respect of enforcement for leases of premises in Wales.
In conclusion, I hope that noble Lords will accept all the amendments made in the other place, and I beg to move.
Motion on Amendment 6
6: Clause 8, leave out Clause 8
Amendment to the Motion on Amendment 6
My Lords, I rise to speak on Amendment 6. I should start by saying that I am the joint owner of a leasehold property, but we got our lease extension some seven or eight years ago—outside the scope of the Bill. Also, both now and earlier the Minister has been very generous with his time in discussing the progress of the Bill. I very much thank him for that and for the great courtesy and good humour he has always shown in doing so.
Clause 8 is a duty to inform the tenant. I was very disappointed to find that the Commons, led by the Government, thought that that was an appropriate safeguard to take out of the Bill. I have listened carefully to what the Minister said by way of a substitution and I will cover that in my further remarks.
First, the Minister has accepted the evidence that the noble Baroness, Lady Grender, among others, brought forward in Committee: that there really is a loophole and it needs to be tackled. The loophole is one that may be exploited by unscrupulous landlords—a minority of landlords, certainly, but ones who are well practised in being unscrupulous. It is a real-world issue. Of course, they are often aided and abetted by their in-house or tame lawyers who are helpfully acting for both parties and do not necessarily spend too long explaining what the hapless leaseholder is being invited to sign.
We hope very much that the Bill will outlaw that practice, but it will not do so immediately. The purpose of the original amendment that your Lordships sent back to the other place was to effectively freeze the imposition of any such unfair terms meanwhile. The Minister has understandably exaggerated the difficulties of Clause 8, but it actually requires that, when a tenant and landlord are about to commence negotiations, the landlord has a duty to inform the tenant of the existence of this Act and the fact that, in a short period of time, they would essentially be able to carry out their transaction for free, whereas in the intermediate period they would do so under the existing regulations, where it is commonplace for escalation clauses and so on to be built into a lease, which would then be an enduring one. There is clearly a temptation for the unscrupulous to do that. You can see the marketing pitch: “New lamps for old”—or rather “New leases for old”—an offer of a VIP lane to leasehold extension, with legal fees waived if you do it by 31 July. Unwary leaseholders could well fall for that, perhaps prompted to go for it by the knowledge that they have only, say, 20 more years on their lease, and perhaps overlooking the fact that it would essentially be free if they waited until 31 July.
I have chosen that date purely for illustration, because the fact is that the Minister has not told us when the new provisions will become operational; I hope he will be able to enlighten us on that point shortly. The window of opportunity for this unscrupulous behaviour to carry on is between now and the moment when this provision comes into force. I want to hear exactly what the Government intend to do to shut that window at the earliest possible opportunity.
What is being offered instead? Superficially, it certainly sounds very plausible, and I hope that it will turn out to be as robust as the Minister hopes it will be. I hope that it will reach every leaseholder, because what is being substituted is an intention in Clause 8 that is a transactional one that would come into play only if a particular lease was going to be extended or was thought likely to be extended, for a general one—so we have a popgun firing at every leaseholder rather than simply providing a provision for landlords to act on at a time of leasehold extension.
I am very pleased to hear about what the Minister had to say about getting in touch with legal firms and those who represent leaseholders and others. I find that a very satisfactory part of his reply.
I would say that a couple of press releases in the ordinary course of business are unlikely to be very effective. The Minister might perhaps like to emphasise how this communications plan will take place. Is there a budget for it? Is it a real-life thing or just a piece of ministerial gloss? I know that the Minister does not go in for ministerial gloss, but I would like an assurance that we will see a real effort made to make sure that this is closed.
When exactly will it be closed? Clause 26(2) says that this will come into force
“on such day as the Secretary of State”
determines. Is that soon, shortly, in the summer, this year, next year, sometime or never? The longer the window stays open—the longer the gap between now and when the Bill’s provisions come into force—the more the risk and the more difficulty there is.
So I would like to hear an assurance from the Minister. Can he give us a date on which this provision will come into force so that we can hold him accountable? Perhaps he could also comment on whether we will get the second leasehold Bill, which he spoke of frequently, in the forthcoming Queen’s Speech? I look forward to hearing what the Minister has to say in respect of this and will listen carefully. I beg to move.
My Lords, I have not previously spoken in the debates on this Bill, but I will be brief. I start by thanking noble Lords who have done a lot of work to improve this much-needed legislation. The amendment in the name of the noble Lord, Lord Stunell, is a welcome reminder that the Bill lacks any obligation for landlords to alert leaseholders in advance of changes relating to ground rents and leasehold extensions. We fully support the noble Lord’s amendment, which seems to be an entirely proportionate measure and in no way presents an obstacle to the core provisions of the Bill.
The Government have been unable to bring forward any safeguards to address this specific power imbalance at the expense of leaseholders. Without it, we believe that the legislation remains flawed. The relationship between leaseholders and landlords should be defined by the principle of transparency and accountability—as, in fact, the Minister agreed in his opening remarks—but this is simply not possible without provisions such as these. So I ask the Minister, even at this late stage, to provide further assurances that have not previously been forthcoming to allay the concerns from across the House.
Okay. I am just getting used to this process. On Amendment 6, it is really helpful that the noble Lord, Lord Stunell, raised the issue of timing. Of course, in order to start the gun, if you like, we need Royal Assent, and then there needs to be a commitment around commencement, which means having all the regulations in place. So let us get this Bill on the statute book as quickly as possible. I have already made a commitment—which perhaps goes beyond where I should have gone because I am, perhaps, a little naive—that, within six months of Royal Assent, we will have commencement. So we know what the window is, effectively, because I made that commitment at the Dispatch Box and I do not want to let anyone down. That is the timeframe: let us get Royal Assent and then, within six months, we will have commencement—and that is the period of time we should be concerned about.
We have very genuinely tried to respond to the issues that have been raised to ensure that the greatest number of people are aware of the dangers and the risks of carrying out a lease extension in that window in a way that would be detrimental to their interests. That is why we have that suite of communications measures. I hope, therefore, that with that and a better understanding of the timeframe, the noble Lord, Lord Stunell, will withdraw his amendment.
On the timing, I have now been in post and responsible for leasehold reform for nearly two years—I have survived one reshuffle—and it is fair to say that both Secretaries of State, particularly the right honourable gentleman in the other place, are absolutely committed to the second wave of leasehold reform, which will be far harder than this modest ground rents Bill. I cannot give a commitment about what will appear, but my expectations are that leasehold reform will be front and centre around his ambition for a wider reform of housing.
Amendment to the Motion on Amendment 6 withdrawn.
Motion on Amendments 7 to 9
7: Clause 23, page 14, line 13, leave out “consideration in money or money’s worth” and insert “pecuniary consideration”
8: Clause 27, page 15, line 25, leave out subsection (2)
9: Clause 27, page 19, line 16, leave out from “paid” to end of line 17 and insert—
“(a) where the penalty was imposed in relation to a lease of premises in England, to the Secretary of State, and
(b) where the penalty was imposed in relation to a lease of premises in Wales, to the Welsh Ministers.”
My Lords, I have a few words in conclusion to thank everybody who has worked so hard to get the Bill to this stage. I thank particularly the noble and learned Lord, Lord Etherton, who has been helpful in tidying up this Bill, the noble Earl, Lord Lytton, with his knowledge as a professional surveyor, and my noble friends Lord Young of Cookham and Lord Hammond of Runnymede, who have been extremely insightful.
I probably should put on record, because I forgot to do so until the very last moment, my residential and commercial interests. I want to make sure that I have declared them, although they are properly set out in my declaration of interests.
I also thank the Benches opposite. I have had to deal with changes and am sorry to have lost the noble Lord, Lord Kennedy, who I believe has gone off to be Chief Whip. Then Labour sent the noble Baroness, Lady Blake of Leeds, from Yorkshire. and now we have the noble Baroness, Lady Hayman of Ullock, who has an incredible reputation in the other place for being fair-minded and constructive. It is marvellous to work with her.
It has been great to work with the Liberal Democrats as well. I will even thank the noble Baroness, Lady Pinnock; she described herself as a Yorkshire terrier, which is why my ankles seem to get bitten quite a bit when she intervenes; she does so on behalf of the interests of leaseholders and fighting their corner, which is appreciated.
The noble Baroness, Lady Grender, who is not in her place, raised the issue of the gap in the first place. I know the noble Lord, Lord Stunell, is representing her, but she raised an important matter, and it is to her credit that the Government have responded to those genuine concerns. I thank everybody—the Opposition Benches, the Liberal Democrats and the Cross Benches—for a very constructive approach to the Bill.
No Minister should ever leave the Dispatch Box without thanking the officials, many of whom are in the Box and have been simply tremendous in supporting me. We should all be proud of what this House is putting forward in legislation, which is much improved because of the contributions of noble Lords. I commend the Bill to the House.
National Insurance Contributions Bill
Relevant documents: 11th and 19th Reports from the Delegated Powers Committee
Clause 1: Zero-rate contributions for employees at freeport tax sites: Great Britain
1: Clause 1, page 1, line 22, leave out “regulations under” and insert “, or in regulations under,”
Member’s explanatory statement
See the explanatory statement for the first amendment tabled in the Minister’s name to Clause 8.
My Lords, this group of government amendments in my name responds to the recommendations of the Delegated Powers and Regulatory Reform Committee report and sets the upper secondary threshold, the so-called UST.
I thank the committee for its diligent care in scrutinising the Bill and noble Lords for their thoughtful comments in Grand Committee. The Government have further reflected on these views and have tabled Amendments 12, 13 and 14 in response to the report of the DPRRC and noble Lords’ comments in Committee.
Clause 10 provides an exemption from self-employed NICs in respect of self-isolation payments provided to support those on low incomes so that they can self-isolate and help stop the spread of coronavirus. Clause 10(2)(d) currently provides that the Treasury may, in relation to any part of the United Kingdom, designate new schemes that are corresponding or similar to the schemes specified in Clause 10(2)(a) to 10(2)(c). Payments under schemes designated in that way will benefit from the exemption in Clause 10(1) and will not be taken into account for the purposes of computing the amount of profits in respect of which class 4 and 2 contributions are payable. The committee recommended that the power in Clause 10(2)(d) be subject to the negative procedure rather than no procedure. The amendment in my name to Clause 10 makes this change.
Secondly, Clauses 3(1) and 6(6) allow the Government to extend the period for which the freeport and veterans relief are available. The committee recommended that the power to extend the relief for freeport employers and employers of veterans should be subject to the affirmative procedure rather than the negative procedure. The Government have taken on board the DPRRC’s recommendation and agree that it is appropriate that these powers are subject to the draft affirmative procedure. The two amendments to Clause 12 make these changes. In summary, the Government take the work of the DPRRC very seriously, and Amendments 12, 13 and 14 go a long way towards accepting its recommendations.
I turn to the amendments that set the upper secondary threshold for these measures. Government Amendments 1, 4 and 7 to 11 simply put on the face of the Bill what secondary legislation is out of time to do. This is not new policy or a change to public expectation. Ordinarily, rates and thresholds are set annually through a rerating exercise, which involves the Government of the day laying affirmative regulations. The debates for the 2022-23 rates and threshold will take place in this House on 23 February. However, due to the timing of this Bill and to ensure that the thresholds are in place for 6 April, the upper secondary thresholds for these measures need to be set in primary legislation.
I will now explain what an upper secondary threshold is. It is the threshold up to which employers can claim a zero rate of NICs. After this point, employers will be liable to secondary class 1 NICs at the standard rate. Without an upper secondary threshold, employers would be eligible for unlimited relief. There is a threshold for freeport employers and a separate threshold for employers of veterans.
The upper secondary threshold for the freeport measure is £25,000 per annum and was first announced in the Freeports Bidding Prospectus published in November 2020. The upper secondary threshold for the veteran measure is £50,270 per annum and was first announced when the policy was consulted on in July 2020. Both these figures have been reconfirmed by Ministers in this House and in the other place during the passage of this Bill. The Chancellor also confirmed these thresholds at the Autumn Budget 2021.
There are justified policy reasons for the different thresholds. The freeport measure has been designed to support growth in underdeveloped areas, so general support is required. The veteran measure has been designed to support veterans as they transition into civilian life, and therefore a targeted, more generous annual threshold is required to help them to overcome the barriers to employment.
I trust that noble Lords will recognise that this is a formality and will vote in favour of this amendment. I beg to move.
My Lords, this group of amendments includes government Amendments 13 and 14, which, as the Minister described, respectively change Clause 3(1) on freeports and Clause 6(6) on veterans, so that any extension to the zero rating of employers’ NICs in these schemes is subject to the affirmative, rather than the negative, resolution procedure. Changing negative to affirmative for both these clauses was an important recommendation of the Delegated Powers and Regulatory Reform Committee. The noble Lord, Lord Tunnicliffe, and I both asked for the changes that it recommended to be enacted, and I thank the Government for delivering them on Report.
As the Minister knows, I was particularly exercised by the original drafting of Clause 10, which designates that payments under certain “self-isolation support schemes” should not be included in computing NICs. I have no problem with the principle but, unamended, the clause would have allowed new schemes to be added without any change to the regulations or any reference to Parliament. The Delegated Powers Committee objected that this offered far too much leeway, and recommended that any designation under the relevant parts of Clause 10 should be “contained in regulations” and subject to the negative resolution procedure. Again, I thank the Minister for delivering on that.
I read the remaining amendments in this group as being technical, and we have no objection. The Delegated Powers Committee will not be fully satisfied by these amendments because certain recommendations have not been agreed by government—for example, the recommendation that the power to modify the criteria for the schemes in freeports should be affirmative, not negative. But we have made progress on some important points, and I hope that the Minister will make sure that the message goes back to those who draft Bills that it is important to take note of the appropriate constitutional balance. He has done so, and I thank him for it.
My Lords, I am grateful to the Minister for bringing forward these amendments. As he outlined in his introduction, several of the texts clarify the upper secondary limit for the 2021-22 and 2022-23 tax years, with future amounts to be set in regulations. Given our proximity to the new tax year, it seems sensible to include these figures on the face of the Bill, rather than rush to lay regulations following Royal Assent. Oh, I should take my mask off; that is much better.
The remainder of the Minister’s amendments address three of the five recommendations put forward by the Delegated Powers and Regulatory Reform Committee. It is disappointing that the Government have chosen not to constrain the powers conferred by Clause 3(3), which the DPRRC labelled “inappropriate”. However, we have got quite a bit further than anticipated, following the Minister’s remarks in Committee. We thank him for this but, as a generality, we hope that the Government will get back to the convention of taking the DPRRC’s recommendations more seriously; I think that is a fair comment. However, the concession on Clause 10 is important, and I look forward to the short debates that will follow regulations made under Clause 3(1) and Clause 6(6).
My Lords, I will reply very briefly to the comments of the noble Lord, Lord Tunnicliffe, and the noble Baroness, Lady Kramer. I simply say that I am grateful for their support for our amendments. Perhaps more than that, I thank them and others who contributed, particularly in Committee, on these amendments. I also thank the DPRRC; the comments that I made in my opening remarks say it all in terms of my view on it.
Amendment 1 agreed.
Clause 2: Freeport conditions
2: Clause 2, page 2, line 26, at end insert—
“(e) the freeport governance body of any freeport tax site in which the employer has business premises maintains a record of all the businesses operating, or applying to operate within the tax site and this record—(i) contains information, which the freeport governance body must make reasonable efforts to verify, about the beneficial owner of the business; and(ii) is easily accessible to relevant enforcement agencies and to the general public.”Member’s explanatory statement
This amendment adds an additional condition whereby the relief would only be available if the freeport maintained a public record of the beneficial ownership of businesses operating on the site.
My Lords, I am afraid that I carry responsibility for Amendments 2 and 3. I will start with Amendment 3, because it is one that I will not move today. It would provide for a review of the effectiveness of the NIC exemption for employers in freeports. Is it delivering additional jobs and economic growth, rather than displacing jobs and growth from other areas? How much is it costing in lost NIC payments at a time when we are requiring the lowest-paid workers to pay higher NI contributions? Are the big companies benefiting rather than SMEs? Those are the issues that we hope a review would look at and report back to this House. I will not repeat the evidence that suggests that freeports deliver few new jobs, mostly of low quality, but I am putting the Government on notice that we will look at these issues and demand evidence from them as the policy on freeports is implemented.
Amendment 2 addresses a problem that, sadly, could not be more topical. Russia’s gathering of troops on the Ukraine border has put on the front pages of newspapers the concern that kleptocrats and oligarchs use the UK as their money laundering centre of choice—the London laundromat, which allows autocrats, among others, to shrug off economic sanctions. I and others talked about the evidence for this in some detail last week in Grand Committee, so I will not rehearse all the facts and figures. I will just say that the Government themselves estimate that £100 billion of new corrupt money flows into the UK each year.
Freeports are notorious for attracting crime, because the customs and tax declarations that usually underpin transparency are absent. Our freeports will provide the added lure of tax-free processing to enhance the money laundering process. The Government insist that the freeport governing bodies will have to keep registers of beneficial ownership of operations and make reasonable attempts to verify their accuracy. That is their attempt to try to contain and limit this form of crime. But, importantly, they are refusing so far to make those registers public. Frankly, this is almost mind-blowing, since every Conservative Chancellor since George Osborne has stressed that registers must be public to be effective. We regularly lecture every country around the world on this issue, including the overseas territories and the Crown dependencies.
Civil society groups and activists across the globe can examine records and registers when they are public, and can alert the enforcement and regulatory agencies. I think we all acknowledge that those enforcement and regulatory agencies have far too few staff and resources to do the work alone without the information flow from civil society and activist groups. I could send your Lordships to many sources that describe the shortage of resources in enforcement, but I will simply quote the National Crime Agency’s inspection by Her Majesty’s Inspectorate of Constabulary in July 2021—only seven months ago. It says very clearly:
“There is insufficient capacity in the investigations command to meet the demand”.
We cannot rely solely on enforcement to keep freeports clean.
Amendment 2 would require that registers of beneficial ownership are not only held, verified and available to enforcement agencies but made public. This is not a time to step backwards in the work we do to try to bring an end to money laundering. If the Minister cannot accept this—it is beyond me why not—I will seek to divide the House.
My Lords, we welcome the tabling of these amendments by the noble Baroness, Lady Kramer. It is fair to say that there is huge scepticism around the Government’s freeports policy. This was reflected at Second Reading. There is no need to go over these arguments again. Sites are coming on stream and time will tell whether the many promised benefits are realised. I was very pleased to sign Amendment 2, and I hope the Minister will respond positively in his remarks.
The topic has taken on additional significance in recent weeks but these concerns are by no means new. Promises of increased transparency have been made year after year. Some limited reforms have come but the level of ambition has been low. We are all aware of the risks involved in freeports. If the Government are serious about mitigating these risks and moving towards a public register of beneficial ownership in a wider sense, why not start here? It feels like an easy win. If the Minister is unable to give the noble Baroness, Lady Kramer, the assurances she seeks, we will join her in any Division she calls.
We are also supportive in principle of the review clause, which would enable us to see the practical impacts of freeport tax relief. Freeports are a leap of faith. The Government hope that they will bring both local and national benefits, but we cannot be sure on either front. The Government will no doubt be keeping all these things under review—to do otherwise would be inconceivable—but can the Minister assure us today that we will get to see the data? I am sure that he will want to shout from the rooftops if their predictions on job and wealth creation are correct, but what if they are not? Sadly, we cannot always expect transparency and honesty from this Administration. If the Prime Minister is serious about turning over a new leaf, perhaps we can start here.
My Lords, I start by directly addressing Amendment 2, which seeks to create an additional condition whereby freeports relief would be available only where the freeport maintained a public record of the beneficial ownership of the businesses operating on the freeport site. I thank the noble Baroness, Lady Kramer, for raising this important issue. Before I go any further, I would like to broaden the debate, as the House will be aware of the considerable interest that continues to be shown in related matters—as the noble Baroness touched on—taking account of the register of overseas entities’ beneficial ownership, economic crime in general, illicit finance and money laundering. Because of this, I hope that the House will forgive me if I give a full and considered response to the noble Baroness and, indeed, the noble Lord, Lord Tunnicliffe.
The Government are taking firm and co-ordinated action to crack down on economic crime and are determined to go further. We will not tolerate criminals profiting from illicit money and will do whatever is necessary to bring these criminals to justice. The Home Office and the Treasury lead the policy response for government. We have well-established governance structures that oversee activity across the system, building on the landmark Economic Crime Plan, which brought the public and private sectors together to tackle economic crime.
The ever-evolving nature of economic crime means that it cannot be combated by law enforcement alone; the capabilities, resources and experience of a wide range of partners from across justice agencies, government departments, regulatory bodies and, of course, the private sector, are required. The Government are bringing forward significant investment to tackle these crimes, including through legislating for the Economic Crime (Anti-Money Laundering) Levy. The upcoming fraud action plan and second Economic Crime Plan this year will further enhance the public and private sector’s response in cracking down on economic crime and fraud.
In recent years we have taken important actions to strengthen our fight against economic crime. Let me give noble Lords some examples. The first was the creation of the new National Economic Crime Centre to co-ordinate the law enforcement response to economic crime. The second was the establishment of the Office for Professional Body Anti-Money Laundering Supervision to improve oversight of anti-money laundering compliance in the legal and accountancy sectors. The third was the Criminal Finances Act 2017, which introduced new powers, including unexplained wealth orders and account freezing orders. Finally, we introduced a global human rights sanctions regime.
The UK is fully committed to coming down firmly on entities which contravene the UK’s robust counter-illicit finance regime, as demonstrated by the actions of our anti-money laundering supervisors. This is apparent in the FCA’s recent success in securing its first criminal prosecution against NatWest bank under the money laundering regulations. NatWest pleaded guilty to three offences of breaching the regulations, resulting in a £268.4 million fine. Similarly, in April 2019 the FCA fined Standard Chartered bank £102.2 million, which was the second largest financial penalty ever imposed by the FCA for anti-money laundering control failings.
The noble Baroness touched on Russia, as I thought she might. The UK has also taken decisive action to tackle Russian illicit finance. We have acted, in unison with our key partners, most notably the European Union and the United States, against Russia directly on issues that have arisen in areas such as anti-corruption. We have introduced the global anti-corruption sanctions regime and have already sanctioned 14 individuals involved with the $230 million tax fraud in Russia, perpetrated by organised crime groups and uncovered by the brave Sergei Magnitsky. The Government are also bringing forward investment to tackle economic crime. The combination of this year’s spending review settlement and private sector contributions through the economic crime levy, as mentioned earlier, will provide funding to tackle economic crime totalling around £400 million over the spending review period.
Let me now return to corporate transparency. The UK is a global leader in beneficial ownership transparency. The Financial Action Task Force’s 2018 assessment recognised this: the UK is one of only five advanced economies to have achieved a pass mark for beneficial ownership transparency. The UK is the only G20 country with a free, fully public and easily accessible beneficial ownership register. The people with significant control register—the so-called PSC—at Companies House has more than 5.6 million names of people with significant control over nearly 4.4 million UK-registered companies. As well as the PSC, the Government intend to implement a register of beneficial owners of overseas entities that own or buy property in the UK. This register will be one of the first of its type in the world and will go further to bring transparency to the UK property market. This, in turn, will make it easier for regulators, legitimate businesses and the general public to know who the true owners of UK property are, and enable law-enforcement agencies to carry out effective investigations.
We are also committed to leading international reform efforts on beneficial ownership. Last year, under the UK’s leadership, all G7 countries committed to strengthening and implementing beneficial ownership registers. This builds on discussions we are driving forward at the Financial Action Task Force to bolster wider international standards on company beneficial ownership. Our actions are helping to ensure there are no weak links in the global financial system. The Government’s proposed reforms to Companies House will further strengthen our position as a world leader in corporate transparency, therefore enabling us to tackle economic crime and protect the UK from hostile actors, thereby enhancing the attractiveness of the UK as a place to invest.
The Companies House reforms will deliver more reliable information on the companies register via verification of the identity of people who manage, control or set up companies; greater powers for Companies House to query and challenge the information submitted to it; and the removal of technological and legal barriers to allowing enhanced cross-checks on corporate data with other public and private sector bodies. To ensure that these changes can be delivered as swiftly as possible, at last year’s spending review the Government committed to an additional £63 million to facilitate Companies House reform. These reforms require primary legislation and, as noble Lords will have heard from the Prime Minister last week, we are committed to bringing this legislation forward. However, in anticipation of any questions on this, I am not in a position, I am afraid, to announce timings or refer to any Queen’s Speech.
I turn now to freeports, which are really the subject of the remarks of both the noble Baroness, Lady Kramer, and the noble Lord, Lord Tunnicliffe. We have gone further: throughout the bidding process and subsequent business case processes, prospective freeports have been required to set out how they will manage the risk of illicit activity, with those plans being scrutinised by officials in the Border Force, HMRC, the National Crime Agency and others.
On beneficial ownership specifically, I start with a reminder that the freeports bidding prospectus stipulated that each freeport must agree a governance structure with the Government. The precise governance structure is tailored to each freeport’s needs but it must be consistent with the requirements set out in the publicly available freeports bidding prospectus.
The Government already require each freeport governance body to undertake reasonable efforts to verify the beneficial owner of businesses operating within the freeport tax site and to make this information available to not only HMRC but law enforcement agencies and other relevant public bodies. This is a condition of freeport status. It is a proportionate approach which means that local area law enforcement can take effective measures to ensure the security and propriety of operations within the freeport.
Specifically on Amendment 2, tabled by the noble Baroness, Lady Kramer, the difference between this and the existing requirement on freeport governance bodies is that the amendment would require the freeport governance body to make its record of beneficial ownership available to the general public as well as to law enforcement. Given the nature of the information, we do not think it would be appropriate for the freeport governance body to release this information publicly. After all, the freeport governance body is a third party. It does not have the locus to release such information about a business to the general public. For example, it would be inappropriate for a port operator, sitting on a freeport governance body, to make public the details of the beneficial owner of a manufacturer operating elsewhere in the freeport. Such a requirement would also duplicate and undermine the people with significant control register at Companies House. The onus is already on the company itself.
The amendment, although well-meaning, is not necessary. The broad requirement is already in place. It would be inappropriate because, as mentioned earlier, it would place a requirement on the freeport governance body to release to the public information about a third party. It would duplicate the wider work that I have set out. I hope that the measures this Government have taken more widely in relation to anti-money laundering, to free ports and to beneficial ownership more broadly, will reassure the House.
I note that the noble Baroness said that she was minded not to move Amendment 3. However, I owe it to her to give an explanation from our side about the amendment that she tabled. Amendment 3 would require the Government to conduct a review into the effectiveness of the policy 18 months from the date at which this Act receives Royal Assent. The Government acknowledge the importance of monitoring reliefs of this nature and of evaluating ambitious programmes such as these freeports. For this reason, the Government have already committed to reviewing the use and effectiveness of this relief before deciding whether to extend it further. This review will look at the data available through HMRC’s systems.
With this brief response, I again thank the noble Baroness and the noble Lord for their contributions. I hope that the noble Baroness will agree to withdraw her amendment.
My Lords, the Minister has not persuaded me. In fact, if anything, most of his speech reinforced my position. We already have a public register of ownership of companies in the UK. We hope that this will be strengthened through verification when we next see this legislation. The Government have committed to a public register of the beneficial ownership of property in the UK. We think that the legislation is sitting somewhere in the department. We hope that it will see the light of day very soon.
Last week, the Minister, the noble Lord, Lord Ahmad, assured us that he had brought the overseas territories to the point at which they were committed to public registers of beneficial ownership by 2023, but here we have a new register which is suddenly not public. We do not need this anomaly or backward step. I do not understand the Government’s resistance. I am afraid that, although I very much respect the Minister, his arguments reinforced my conviction, as I hope that it will have reinforced the conviction of this House, that we need to divide on this issue.
Amendment 3 not moved.
Clause 6: Zero-rate contributions for armed forces veterans
4: Clause 6, page 4, line 34, leave out “regulations under” and insert “, or in regulations under,”
Member’s explanatory statement
See the explanatory statement for the first amendment tabled in the Minister’s name to Clause 8.
Amendment 4 agreed.
5: Clause 6, page 4, line 35, at end insert—
“(3A) Relief under this section may apply in respect of any employment of an earner who meets the veteran conditions, irrespective of whether it has applied to a concurrent or previous employment of that earner.”Member’s explanatory statement
This amendment clarifies that employer zero-rate relief when employing veterans may apply to multiple employers, in cases where a veteran has more than one form of employment during the eligibility period.
My Lords, I will also speak to Amendment 6 in this group, which brings us to the issue of zero-rate relief for employers of new Armed Forces veterans. I am grateful to the noble Baroness, Lady Kramer, for her support on this issue at Committee, and for signing Amendment 6, which is in this group.
As we discussed in Grand Committee, many veterans make a smooth transition back to civilian life. They will find stable accommodation and a job within a year, becoming happy and productive members of society. However, while this applies to a clear majority of ex-service personnel, there are a sizeable number who struggle with the process of adaptation. The reasons for this are varied and complex. Some veterans simply are not adequately prepared for life outside the forces. This is an area where improvements have been made in recent years, but individual experiences of leaving active service suggest more needs to be done.
Others may find themselves contending with issues in their personal lives: living in temporary or sub-standard housing, facing difficulty reintegrating back into their family or friendship group, or dealing with mental or physical health issues. Any one of these would make the process of finding and holding down a job more difficult; a combination may make it impossible.
Many veterans will eventually settle, although they may not do so within 12 months. They may find that their first job or two do not suit them. These challenges cannot be fully addressed in the Bill—we know that. But we are generally supportive of the NIC relief being offered to employers of veterans. I continue to be of the view that if this policy helps just a single person, it will have been worth it.
The question before us today is whether—and how —we can make the relief work for as many veterans as possible. The Treasury’s policy note is clear that the relief can cover multiple periods of employment—concurrent or subsequent—within the qualifying period. However, as drafted, the Bill is silent on this point. I do not wish to be a cynic, but policy notes can change. Paragraphs of text can mysteriously disappear with no explanation. Amendment 5 has been tabled with this in mind, to protect that important point of clarification. I hope the Minister can accept the text. If the wording is not quite right, it can be addressed at Third Reading.
I also hope the Minister will feel able to accept Amendment 6, which would grant the Treasury the power to change the one-year period specified in Clause 7(1)(c) of the Bill. In Committee, we argued for three years of relief. This would have ensured consistency with the relief offered to employers in freeports, while affording veterans more time to adjust. The Treasury seems certain that a single year’s relief will do the job. We hope it does, but that will become apparent only with time. If it becomes clear that a longer period of 18 months, two years or perhaps longer would have a beneficial impact on the employment and retention of veterans, Amendment 6 would allow that change to be made quickly and simply, and—crucially—outside the Budget and Finance Bill cycle. The Government would not be compelled to use the power, but the option would be available to Ministers should the scheme be extended.
I hope that noble Lords—and the Minister—respond positively to these amendments. They are offered in a spirit of co-operation. We want to be helpful to the Government and we want the Government to be helpful to the men and women who have defended this great nation. It is our duty to serve the interests of those who have served us. I beg to move.
My Lords, we on these Benches fully support these Labour-led amendments. The noble Lord, Lord Tunnicliffe, has made the arguments in powerful terms, and I will not repeat what has been said so well. Most service men and women return smoothly to civilian life, but it is often those who have experienced the most trauma on our behalf who find themselves in a difficult place. Nothing would be more frustrating than putting in place a scheme such as that proposed in the Bill and then finding that, in many cases, the support does not last long enough as life events throw people temporarily off course. Frankly, the cost of providing a longer employment incentive for this group would cost the Treasury next to nothing, so we find it a privilege to support these amendments.
My Lords, the veterans’ relief legislated for in the Bill and consulted on publicly has been introduced to support veterans as they transition into civilian life, and to encourage employers to utilise the considerable and often formidable skill sets of veterans. Between 10,000 and 15,000 leave the regular Armed Forces each year, whose employers will be able to benefit from this measure. This measure fulfils the Government’s 2019 manifesto commitment and builds on the UK-wide Strategy for our Veterans launched in November 2018, which includes specific commitments to support veterans to “enter appropriate employment”.
Amendment 5 tabled by the noble Lord, Lord Tunnicliffe, seeks to clarify that multiple employers can claim that relief on behalf of the same veteran. However, the amendment is not necessary as this is already the policy intent, and the legislation, as drafted, supports this. It may be helpful to explain exactly how the relief works. Any employer can claim the relief during a veterans’ first 12 months in civilian employment. That period is calculated by taking the veteran’s first day of civilian employment after leaving the Armed Forces and adding 12 months. Concurrent and subsequent employers can claim the relief in that period. That approach ensures that a veteran does not use up access to the relief if they take on a temporary role immediately after leaving the Armed Forces. Where the first day of civilian employment is before 6 April 2021, the period for which an employer can claim the relief will be from 6 April 2021 to 12 months after the first day of civilian employment.
It may help the House if I provide it with an example. Veteran A starts their first civilian employment on 30 August 2022. On 30 November 2022, veteran A enters into a separate employment with employer B. Employer B will also qualify for this relief, and both employers can continue to claim this relief until 29 August 2023. That approach has been communicated publicly to employers in the Government’s response, published on 11 January 2021, to the policy consultation; in the tax impact and information note that accompanies the Bill; in guidance for employers published ahead of this measure being available from 6 April 2021; and in speeches made by Ministers in both this House and the other place. I hope that the noble Lord is reassured about the policy and withdraws his amendment.
Amendment 6, tabled by the noble Lord and supported by the noble Baroness, Lady Kramer, gives the Treasury a power to extend the qualifying period of this relief, as defined at Clause 7(1). The Government have considered this measure in detail and consulted extensively on the relief, including a policy consultation which ran from July to October 2020 and a technical consultation which ran from January to March 2021. A significant number of respondents agreed that the relief is a positive step towards supporting the recruitment of veterans and could help to break down the barriers and negative perceptions surrounding veterans. After considering the responses, we felt that a 12-month qualifying period struck the right balance between supporting veterans as they transitioned to civilian life and wider taxpayers’ interests. Noble Lords may want to note that employer representatives such as the Federation of Small Businesses welcomed the 12-month relief when it was announced.
This policy provides employers in the 2021-22 tax year with up to £5,500 of relief and is one part of the Government’s broader strategy to support veterans. The Government recently published the veterans’ strategy action plan for 2022-24, which contains over 60 policy commitments worth over £70 million in a diverse range of areas, reflecting the varied streams of government support offered. Furthermore, at the 2021 Budget and spending review, £10 million was provided to support mental health via charity provision and £5 million to the Health Innovation Fund. In August 2021, £2.7 million was provided to further strengthen veteran health support, including facilitating the expansion of Op COURAGE, and a further £5 million in September 2021 for those struggling after the Afghanistan withdrawal.
Furthermore, the Bill already contains other levers to increase the generosity of this relief if needed, such as increasing the upper secondary threshold, as debated earlier, and extending the overall period of the relief. These proposed additional powers are therefore not necessary. With these reassurances, I hope that the noble Lord and noble Baroness will not press their amendments.
My Lords, I thank the noble Lord for his response. I hope that I am wise in not pressing Amendment 5 any further. I will, however, be pressing Amendment 6 to a Division. The Government believe that this process is good, and we agree. There is consensus that the NICs relief is a benign piece of legislation and, if it is successful and cost effective, it may need to be extended. This amendment permits extension without further primary legislation. It is entirely within the control of government. It can do no harm and may do some good. I commend Amendment 6 to the House. In the meantime, I beg to withdraw Amendment 5.
Amendment 5 withdrawn.
Clause 7: Veteran conditions
6: Clause 7, page 5, line 24, at end insert—
“(3) The Treasury may by regulations amend the period specified in subsection (1)(c) where it believes this will contribute to improved employment and retention rates among veterans.”Member’s explanatory statement
This amendment would grant the Treasury a power to extend the eligibility period attached to zero-rate relief for armed forces veterans, should that be deemed desirable to improve the ability of veterans to find long-term employment.
Clause 8: Upper secondary threshold for earnings
Amendments 7 to 11
7: Clause 8, page 5, line 26, at end insert—
“(A1) For the purposes of section 1, for the tax year beginning with 6 April 2022—(a) the upper secondary threshold is £481, and(b) the prescribed equivalent for earners paid otherwise than weekly is—(i) where the earnings period is a month, £2,083;(ii) where the earnings period is a year, £25,000;(iii) where the earnings period is a multiple of a week, £25,000 divided by 52 and multiplied by the multiple;(iv) where the earnings period is a multiple of a month, £25,000 divided by 12 and multiplied by the multiple;(v) in any other case, £25,000 divided by 365 and multiplied by the number of days in the earnings period.(A2) For the purposes of section 6, for the tax years beginning with 6 April 2021 and 6 April 2022—(a) the upper secondary threshold is £967, and(b) the prescribed equivalent for earners paid otherwise than weekly is—(i) where the earnings period is a month, £4,189;(ii) where the earnings period is a year, £50,270;(iii) where the earnings period is a multiple of a week, £50,270 divided by 52 and multiplied by the multiple;(iv) where the earnings period is a multiple of a month, £50,270 divided by 12 and multiplied by the multiple;(v) in any other case, £50,270 divided by 365 and multiplied by the number of days in the earnings period.(A3) Amounts determined in accordance with—(a) subsection (A1)(b)(iii) or (iv), or subsection (A2)(b)(iii) or (iv), if not whole pounds, are to be rounded up to the next whole pound;(b) subsection (A1)(b)(v) or (A2)(b)(v) are to be calculated to the nearest penny, and any amount of a halfpenny or less is to be disregarded.”Member’s explanatory statement
This amendment, together with the other amendments tabled in the Minister’s name to Clause 8, and the amendments tabled in the Minister’s name to Clauses 1 and 6, set upper secondary thresholds and prescribed equivalents for the purposes of Clause 1, in relation to the tax year 2022-23, and Clause 6, in relation to the tax years 2021-22 and 2022-23, and make consequential amendments.
8: Clause 8, page 5, line 29, after “year” insert “after the tax year 2022-23”
Member’s explanatory statement
See the explanatory statement for the first amendment tabled in the Minister’s name to Clause 8.
9: Clause 8, page 5, line 32, leave out subsection (3)
Member’s explanatory statement
See the explanatory statement for the first amendment tabled in the Minister’s name to Clause 8.
10: Clause 8, page 5, line 35, leave out subsection (4) and insert—
“(4) The regulations may prescribe an equivalent of an upper secondary threshold in relation to earners paid otherwise than weekly (and references in any Act to the “prescribed equivalent”, in the context of an upper secondary threshold for the purposes of section 1 or 6, are references to the equivalent prescribed in reliance on this subsection in relation to such earners). (4A) The power to prescribe an equivalent includes power to prescribe an amount which exceeds, by not more than £1.00, the amount which is the arithmetical equivalent of that threshold.”Member’s explanatory statement
See the explanatory statement for the first amendment tabled in the Minister’s name to Clause 8.
11: Clause 8, page 5, line 38, at end insert—
“(5) The regulations may amend this section.”Member’s explanatory statement
See the explanatory statement for the first amendment tabled in the Minister’s name to Clause 8.
Amendments 7 to 11 agreed.
Clause 10: Treatment of self-isolation support scheme payments
12: Clause 10, page 6, line 24, after “paragraph” insert “in regulations made”
Member’s explanatory statement
This amendment provides for the designation of schemes for the purposes of Clause 10 to be by regulations.
Amendment 12 agreed.
Clause 12: Regulations
Amendments 13 and 14
13: Clause 12, page 7, line 8, at end insert—
“(za) section 3(1);”Member’s explanatory statement
This amendment provides for regulations under Clause 3(1) to be subject to the draft affirmative procedure.
14: Clause 12, page 7, line 10, at end insert—
“(ba) section 6(6);”Member’s explanatory statement
This amendment provides for regulations under Clause 6(6) to be subject to the draft affirmative procedure.
Amendments 13 and 14 agreed.
The following Statement was made in the House of Commons on Wednesday 2 February.
“Madam Deputy Speaker, I would like to make a Statement on the Government’s plans to level up and unite our country.
The White Paper we are publishing today sets out our detailed strategy to make opportunity more equal and to shift wealth and power decisively towards working people and their families. After two long years of Covid, we need to get this country moving at top speed again. We need faster growth, quicker public services and higher wages, and we need to allow overlooked and undervalued communities to take back control of their destiny.
While talent is spread equally across the United Kingdom, opportunity is not. Our country is an unparalleled success story, but not everyone shares in it. The further a person is from one of our great capitals—whether it is London, Edinburgh, Cardiff or Belfast—the tougher life can be. For every local success, there is a story of scarring and stagnation elsewhere, and that must change. We need to tackle and reverse the inequality that is limiting so many horizons and that also harms our economy. The gap between much of the south-east and the rest of the country in productivity, in health outcomes, in wages, in school results and in job opportunities must be closed. This is not about slowing down London or the south-east, or damping down animal spirits, but rather about turbocharging the potential of every part of the UK. This country will not achieve its full potential until every individual and community achieves everything of which they are capable. Our economy has been like a jet propelled by only one engine, now we need to fire up every resource that we have.
The economic prize from levelling up is potentially enormous. If underperforming places were levelled up towards the UK average, unlocking their full potential, this could boost aggregate UK GDP by tens of billions of pounds each year. So, how do we achieve success? First, we do so by backing business. The economic growth that we want to see across the UK will be generated by the private sector, by businesses and entrepreneurs investing, innovating, taking risks and opening new markets. We will support them every step of the way, by cutting through the red tape, by making it easier to secure investment and, as our White Paper today outlines, by creating the right environment on the ground for business.
As the Chancellor laid out in The Plan for Growth, we need to invest in science and innovation, improve infrastructure and connectivity, and extend educational opportunity to underpin economic success. This White Paper makes clear our commitment to improve education, investment and connectivity fastest in those parts of the country that have not had the support that they needed in the past. We have set out clear, ambitious missions, underpinned by metrics by which we can be held to account to drive the change that we need.
On productivity, science and innovation, our mission 1 is that, by 2030, we pledge that pay, employment and productivity will have risen in every area of the UK, with each containing a globally competitive city; closing the gap between top performing areas and the rest. Mission 2 will see a massive increase in domestic public investment in research and development outside the greater south-east, increasing by at least a third in the next three years, and we will use the shift in resources to leverage private sector investment in the areas that need it most.
On infrastructure and connectivity, we will have better local transport, bringing the rest of the country closer to the standards of London’s transport system. We will also improve digital connectivity, with billions of pounds of investment, bringing nationwide gigabit-capable broadband and 4G coverage to the whole UK, and we will expand 5G coverage to the overwhelming majority of the population.
On education and skills, we will effectively eradicate illiteracy and innumeracy, with investment in the most underperforming areas of the country. There will be 55 new education investment areas in England alone, driving school improvement in the local authorities where attainment is weakest. Our sixth mission is to have new, high-quality skills training, targeted at the lowest-skilled areas, with 200,000 more people completing high-quality skills training annually.
We know that, to achieve these missions, we will need smart, targeted government investment. That is why we are investing more than £20 billion in research and development to create a science and technology superpower. Today, we are allocating £100 million specifically to three new innovation accelerators in the West Midlands, Glasgow and Greater Manchester. It is also why we are investing £5 billion in bus services and active travel, with new bus investment today in all our mayoral combined authorities and the green light for bus projects in Stoke-on-Trent, Derbyshire, Warrington and across the country. It is also why we are investing in new academies, new free schools and new institutes of technology. Today, we are establishing a new digital UK national academy—just as the UK established the Open University to bring higher education to everyone, we are making available to every school student in the country high-quality online teaching, so geography is no barrier to opportunity.
We will also use the freedoms that we now have outside the EU to reform government procurement rules to ensure that the money that we spend on goods and services is spent on British firms and British jobs. We will unashamedly put British workers first in the global race for investment. Economic opportunity, spread more equally across the country, is at the heart of levelling up, but levelling up is also about community as well. It is about repairing the social fabric of our broken heartlands, so that they can reflect the pride we feel in the places we love. That is why we are investing in 20 new urban regeneration projects, starting in Wolverhampton and Sheffield and spreading across the Midlands and the north, with £1.8 billion invested in new housing infrastructure to turn brownfield land into projects across the country like Stratford and King’s Cross in London.
By regenerating the great cities and towns of the north, we can relieve the pressure on green fields and public services in the south. A more productive, even prouder and faster-growing north helps improve quality of life and well-being in the south, which is why we are refocusing housing investment towards the north and Midlands.
Our housing mission is clear: we will give renters a secure path to greater home ownership, we will drive an increase in first-time buyers and we will deliver a tough focus on decent standards in rented homes. A new £1.5 billion levelling-up homebuilding fund will give loans to small and medium-sized builders to deliver new homes, the vast majority of which will be outside London and the south-east. Our housing plans will set a decent minimum standard that all rented properties must meet.
Our White Paper this spring will include plans to cut the number of poor-quality rented homes by half, address the injustice of ‘no fault’ evictions and bear down on rogue landlords, thereby improving the life chances of children and families up and down the country.
We will also take action in law to tackle the problem of empty properties and vacant shops on our high streets. Building on the work of my honourable friend the Member for Stoke-on-Trent North, Jonathan Gullis, we will ensure that properties cannot remain unloved and unused for months, dragging down the whole high street. Instead, we will put every property to work for the benefit of the whole community.
Also central to improving quality of life for all will be further investment in sport, culture, nature and young people. That is why we are investing £230 million extra in grass-roots football and using the community ownership fund to help fans take back control of clubs such as Bury FC. It is also why every extra penny of Arts Council spending will now be allocated outside London, from celebrating ceramics in Stoke to supporting pride in British history in Bishop Auckland. There will also be another £30 million allocated to improving parks and urban green spaces, as well as plans to re-green all of our green belt.
We will also invest an additional £560 million in activities for young people, and we will invest in reversing health disparities, tackling obesity and improving life expectancy. We will also ensure that the communities in which we are investing are safer and more orderly. Fighting crime and anti-social behaviour is essential to giving communities new heart, so we will invest an additional £150 million in our safer streets fund and ensure that those who drag down our communities through vandalism, graffiti and joyriding pay back their debt to those communities. They will be set to work on improving the environment, cleaning up public spaces, clearing away the drug debris in our parks and streets and contributing to civic renewal.
Critical to the success of our missions will be giving communities not just the resources but the powers necessary to take back control. That is why our White Paper sets out how we will shift more power away from Whitehall to working people. We will give new powers to outstanding local leaders such as Andy Street and Ben Houchen—and, indeed, Dan Jarvis. We will create new mayors where people want them, we will give nine counties including Derbyshire and Durham new powers as trailblazers in a programme of county deals and we will strengthen the hand of local leaders across the country.
We will also take back control of the money that the EU used to spend on our behalf, ensuring that local areas can invest in their priorities through the new UK shared prosperity fund. With power comes responsibility, so we will also ensure that data on local government performance is published so that we can hold local leaders to account.
Central government will report back to this House on our progress against our missions and on the impact all our policies have on closing geographical inequalities. Because building long-term structures matters, we will also create the institutions, generate the incentives and supply the information necessary to drive levelling up for years ahead.
This White Paper lays out a long-term economic and social plan to make opportunity more equal. It shifts power and opportunity towards the north and Midlands, Scotland, Wales and Northern Ireland. It guarantees increased investment in overlooked and undervalued communities, in research and development, in education and skills, in transport and broadband, in urban parks and decent homes, in grass-roots sport and local culture and in fighting crime and tackling anti-social behaviour. It gives local communities the tools to tackle rogue landlords, dilapidated high streets and neglected green spaces, and it demonstrates that this people’s Government are keeping faith with the working people of this country by allowing them to take back control of their lives, their communities and their futures.
I commend this statement to the House.”
My Lords, if the Statement and the paper with it are the sum total of the Government’s ambition, their legacy will be to have held back the aspirations of towns, cities and villages across the UK. Britain is the birthplace of industry and of towns, villages and cities with huge plans for their future. But over the 11 wasted years of Conservative Britain, our country has stalled.
This paper was meant to mark a turning point, but instead, we have more of the same: no new funding, no new ideas and certainly no new plan. Instead, we have 332 pages, which show just how divorced the Government are from the ambitions of the local communities that make up this country. Above all, what we needed from the Government was a strategy to bring jobs and prosperity to the places that need them most. People should not be expected to leave their home towns to build a successful career, but there are no credible solutions to end this in the paper, only recycled slogans.
The Government need to come forward with a plan to rebuild British industry—buying, making and selling more at home and giving public contracts to UK companies, both big and small. What plans do the Government have to encourage high-skilled industries to move to the areas that the IFS has determined to have the highest net loss of graduates? And how will Ministers reverse the sharp decline in people aged 16-24 studying apprenticeships?
Our town centres have the potential to once again be local hubs of growth, but since this Government came to power over a decade ago, British high streets have lost 10,000 shops, 6,000 pubs and more than 7,000 bank branches. If the Government are serious about reversing this trend, they need to completely reform and replace the system of business rates, which is burdening businesses of all sizes. The solution is not just to tackle the tax burden but to incentivise investment and provide more security to small businesses, which will themselves face the consequences of the Government’s cost of living crisis. Does the Minister accept the warning of many high street chains, which have called for the wholesale reform of business rates?
As much as the paper falls short because it lacks ambition, it also relies on the broken idea that towns and villages only exist to feed off cities. So much of the narrative still relies on the notion that investing in cities is enough to spur growth in nearby towns. For example, look at how any talk of building new transport links is about bringing people from towns into core cities, rather than connecting the towns together. Look at the focus on the largest cities in each region.
No one would doubt that cities deserve the Government’s support to grow, but towns should also be seen as distinct places with proud identities, and the Government really should respect that. Towns and villages need their own industries, jobs, culture, good quality homes and high streets. They should not be the places people are expected to leave if they are to live well. So, what assessment has the Minister made of the recent findings of the House of Commons Public Accounts Committee, which has called for greater transparency in the awarding of levelling-up funding to towns?
Ultimately, the only way that cities, towns and villages will be able to realise their ambitions is if the Government give them the power to do so. That is why the Government need a new, place-based approach, up-ending the current settlement so that local areas have real powers and resources to make long-term investment decisions that work for their own communities.
The Statement also makes no mention of net zero, green jobs or the climate crisis, while the full White Paper dedicates just three pages exclusively to net zero—two of which are entirely picture based. The Government have failed to detail any new green economy funding beyond previous commitments. Just how serious are this Government about tackling climate change and investing in the green jobs of the future?
One theme is staggeringly absent from the Government’s paper: safety and security. People deserve to feel protected in their town, their village, their city, but the fear of violence and crime casts a shadow over millions of families. Across the UK only one in 20 crimes leads to a charge; that is half the figure since 2015. Today violent crime is at record levels, with nearly 2 million violent offences last year, and an epidemic of violence against women and girls, with only 3.3% of sexual offences leading to charges.
This is why the Government urgently need to introduce new police hubs and new neighbourhood prevention teams to tackle anti-social behaviour and put more police on the beat in local communities. Does the Minister agree that, if levelling up is to have any meaning, it must include addressing the threat of violent crime, which disproportionately impacts different areas across Britain?
I finish by drawing the Minister’s attention to the words of one of his party colleagues, the deputy leader of Shropshire Council, as reported by the BBC’s Jo Gallacher. Councillor Potter, who represents the county which witnessed the birth of the Industrial Revolution, said that the report shows that Shropshire is
“overlooked, unrecognised, taken for granted and completely undervalued”
by the Government. Those words will ring true across England, Wales, Scotland and Northern Ireland, because the publication of this report shows what many already knew—that levelling up is a slogan, and behind it are only empty promises.
My Lords, I remind the House of my interests as a member of Kirklees Council, a vice-president of the Local Government Association and someone who lives in a part of west Yorkshire where there are significant areas of deprivation; I see it every day.
Nearly three years have passed since the levelling up slogan was first used. It is good at last to read some definition of what it may mean. It is good that there is a recognition that deep-seated economic and social deprivation can be tackled successfully only through long-term sustained change. Batley in west Yorkshire, has, for example, been the recipient of City Challenge and Single Regeneration Budget funding—the earlier iterations of levelling up. Yet, sadly, Batley remains an area of considerable deprivation, partly because this earlier funding failed to deal with the basic issues of a lack of well-paid jobs, poor transport links and health inequalities. Therefore, a commitment to sustained and very long-term investment for change is welcome.
However, the challenge for the Government is that of investment—or, in this case, the lack of it. Fundamental and continual gradual change such as that described in the White Paper takes many years to achieve. Without substantial additional funding, change will be imperceptible to those who live in the towns and cities described. Further, any additional funding is on the back of huge cuts to the very local services in the so-called 12 missions.
Let us take public transport. We already know that HS2 to Leeds has been axed, HS3 is a pipe dream and even basic electrification of the trans-Pennine route is to be partial. What about bus investment? Even today, mayors and council leaders in the Midlands and the north have exposed a 50% cut to improving bus services. Access to jobs and opportunities are rightly emphasised in the White Paper. Will the Minister explain how mission 3, on public transport, can be realised when the starting point is even more cuts to services?
Then there is the issue of enabling all children to reach their potential, especially in the crucial areas of numeracy and literacy. It is a great metric to measure, but the widespread closure of Sure Start children’s centres due to major cuts in funding, combined with schools funding falling, is hardly the backdrop to enabling school improvement. At this point I ought to bring the House’s attention to my interest as a local school governor. Does the Minister agree, and will he point to an increase in funding that would enable the skills, literacy and numeracy targets to be reached?
A key metric, which I was genuinely pleased to see, is narrowing the gap in healthy life expectancy. This is such an important measure because it is linked to many key determinants of health: quality of housing, affordability of healthy food, access to skills providers and the quality of local health services and the environment. Perhaps the Minister can say how the Government will improve access to GPs for residents in my area, which has many fewer GPs per capita than the average.
Access to dental health is also vital. Yet Dentaid, a dental charity that operates in developing countries, also provides services in my area due to the lack of NHS dentists. It is shameful. Will I be able to assure those residents that the Government will provide easy access to NHS dental care for all who need it?
The creation of skilled, and thus better-paid, jobs is a basic requirement for improving the economic well-being of areas such as mine. Perhaps the Minister can explain how inward investment can be achieved and combined with providing local people with the skills to take up the higher-skilled jobs that are created. Seeing cities as the centre of development is insulting to the local towns that are supposed to be providing the jobs for these cities.
Finally, the governance issues are not highlighted but are slipped in almost under the radar. I have come to the conclusion that the Government despise local government. They want to abolish district councils and create more mayoral authorities without any evidence that reducing democratic representation and involvement leads to better decision-making and accountability.
Levelling up, however desirable, will not be effective without also levelling up funding. The shared prosperity fund, for example, shows the direction of travel the Government are going in. The north of England loses over 50% of that replacement funding for EU structural and regional funds. In total, it amounts to nearly £100 million lost money for the north. Will the Minister commit to levelling up funding through fair funding for councils, equivalent transport funding with the London area, and the shared prosperity funding for the north of England that fulfils the promises made during Brexit? Until any of that can be agreed to be a starting point, levelling up will remain a pipe dream for most of us.
My Lords, it is difficult to follow those two speeches because we have had a speech that is more balanced from the noble Baroness, Lady Pinnock, and, I am afraid, quite a pointed speech from the noble Baroness, Lady Hayman of Ullock.
As a relatively new Minister, I understand that there are so many examples of government policy that never get published. Those who have served in government will know that there are very many areas where policy is discussed, debated and raised but never sees the light of day. The first thing I want to do is to pay tribute to my right honourable friend the Secretary of State, as well as one of the most tireless, policy-heavy and thoughtful Ministers I have had the pleasure of working alongside: Neil O’Brien. Minister O’Brien has even signed my copy of the levelling-up White Paper, which, in decades to come, will be worth a lot of money.
I think it is a tremendous document with a very clear plan to level up this country. As someone who spent 20 years in local government, with some of the most deprived areas alongside some of the wealthiest, I believe in the mission to level up without levelling down. That is not to forget the technical annex of this plan, which, I have to say, I have not read yet but I am happy to say that I will be reading it, probably after this Statement.
There is no single policy or intervention that can achieve change on its own. This is a plan for England, Wales, Scotland and Northern Ireland. Levelling up across the United Kingdom does not mean levelling down, as I have said; it means boosting productivity, pay, jobs and living standards by growing the private sector. We on this side of the House recognise the importance of the private sector and spreading opportunities and public services, especially in those places where they are weakest, and restoring that sense of community.
I am very interested that both the Opposition and the Liberal Democrat Front Bench accuse this of being a White Paper without the necessary resources to level up. I did a word count of this document—that is the kind of thing I did. In first place, mentioned nearly 1,000 times—994 times—were “fund”, “funding pot” and “grant”: plenty of opportunities to channel the money that was committed in the spending review at the end of the last year into the means by which we will level up. In second place, with only 31 mentions, was “tax” or “taxation”. This is a plan with plenty of opportunities to channel that money precisely to ensure that we level up this country.
I want to deal with the two specific points around skills and an area I feel very strongly about—as a former deputy mayor for policing and crime at City Hall, serving the then mayor and our current Prime Minister—that is, ensuring that we reduce violent crime and that our cities are safe. It is fair to say that if we do not feel safe walking around and being part of our community then there is no chance for some forgotten areas to regenerate and to revive. I take very seriously that commitment around public safety.
Surely, if you have a clear mission around crime, which is safer streets by 2030—homicide, serious violence and neighbourhood crimes will have fallen—focused on the worst-affected areas and you back that up with money channelled into the safer streets fund, you are doing precisely that. You are ensuring that communities that are riven by crime and violent crime have the funding they deserve on top of their existing funds to tackle the very thing that has been raised.
There is a very clear mission on skills—how we can improve skills and therefore see the productivity improvement that this nation really yearns for. I discussed this today with Rob Halfon, who is very much a champion of skills in the other place. He said it was so great to see skills front and centre in an agenda and see it with its own mission statement. Interestingly enough, when we want specific examples about how skills will be improved, we should look at the plans in Blackpool and Walsall, two of the three pathfinder areas that bring employment and skills provision together. Bringing employment and skills provision together will enable people to get into work and to get on in their lives.
Frankly, it is quite hard to stomach the idea that this is an empty vessel when there is so much detail in here. I could spend the next 45 minutes—although time eludes me—explaining point by point what levelling up means and how we can deliver those 12 missions. This is a Government who want to deliver—not over a couple of years; these missions are set to 2030. This is clearly a Prime Minister who does not want to be elected again but again and again. That is why this levelling up is precisely what this Government will achieve. It will take time but here is the mission and we will deliver it in due course.
My Lords, I hope my noble friend will sign my copy of the levelling-up White Paper. The Public Services Committee, ably chaired by the noble Baroness, Lady Armstrong, produced a report on levelling up last year and I am delighted that the Government have responded to two of its recommendations: first, that there should be clarity about what levelling up means; and, secondly, that there should be regular milestones so that we can see whether progress is being made. We also commented on transparency and I wonder whether my noble friend will recognise that under the levelling-up White Paper very substantial sums of central grants will continue to be allocated to local areas. So I ask my noble friend whether there will be total transparency about the basis of those decisions.
I always thank my noble friend for his comments and his probing in the right areas. I failed to mention in my response to the Front Bench that, of course, there will be an annual report that will measure progress on that mission to 2030 and beyond. The point that my noble friend raises is precisely right. We need to have transparency. It is important to track the money. I think a policy that was actually delivered under, I believe, the Blair Government, the Total Place agenda, is a very important one to ensure that we get the money into the right areas across the piece, whether it is funded by central government, regional government or, indeed, local government and make sure that the money gets to the people who need it most. Transparency is a key part of achieving success and we will take that point on board.
We are fed up with joyous optimism which does not have much underpinning. Can we have real attempts to tackle the things that are affecting people fundamentally? In the north-east, the difference between those who are doing well in schools and those who are not has increased over the last two years. When does the Minister expect that they will be able to get the same sorts of opportunities because of them being levelled up to what, for example, young people in Surrey Heath will be able to expect? When, on behalf of my noble colleague from Darlington, will they have the jobs that they were promised by the Treasury—300 within the next month, or six weeks, I am told? They have not arrived at all. On transparency, I urge the Minister to look at what the National Audit Office has said and then come back to the House and tell us that the Government are following the advice of the National Audit Office on transparency.
Can I respond? I listened to the noble Baroness, and I hope that she can listen to me for just a moment. I was depressed to watch the grant farmers at work, filling in forms and collecting the money—whether it was local, regional or national money—and not making a blind bit of difference. That was during the Labour years; I saw no progress at all, so I was depressed. But here we have 12 key missions, all measurable, backed up by an annual report. Admittedly, this is not the end of the programme and plan for levelling up—I would say that we are at the end of the beginning—but it is now a substantial plan, with 12 clear missions set out and milestones to get there, which will be measured in an annual report. I do not think there has been a Government who have tried to be more transparent than this one.
My Lords, I am grateful to the Minister for the enthusiasm of his presentation but also for looking forward to the rest of this decade. I also want to speak about those communities in which I have served that are the inheritors of decades of deprivation and need. I was intrigued to see in the executive summary that, even in the affluence of Sussex, where I serve, there are deep pockets of deprivation and need which are recognised. What I do not see recognised here is the vital importance of the social capital of faith groups, of which the Church is one, which make a significant contribution not only to sustaining life in those areas of deprivation but to sustaining hope for a better future.
When I was newly ordained and serving in Devonport in Plymouth back in the late 1980s, in those days, it was recognised by the statutory agencies that were our partners that funding to Church-monitored projects by the statutory agencies—such as the probation service, mental health service and social services—enabled those projects to be delivered in the most acute areas of need through a voluntary agency, the Church, which already had levels of trust that enabled the services to be more easily received than they would be from statutory agencies, for a wide range of reasons. I hope that the Minister will reassess the place of those faith and community organisations, which are part of our social capital. It has been the privilege of the Church to be a co-ordinator with other groups in that respect.
Finally, the focus here has been, understandably, on our towns—we have mentioned our cities and the balance between them—but I am also responsible for an area of huge rural deprivation, and looking at how levelling up in those rural areas can occur is another major need. I hope, once again, that the social capital of faith groups such as churches will be recognised.
My Lords, I thank the right reverend Prelate for bringing up two very important points, the first of which is the role of faith communities in helping us to bring about opportunity and enable and support people to get on in life. I saw that for myself as the leader of Hammersmith and Fulham Council, where we saw the extension of a church in Hammersmith, which was particularly active in providing skills training and reaching parts of the community that, frankly, the statutory agencies never got to. We do recognise that, and it is a very important point to build on that insight.
I am told by my ministerial colleague Danny Kruger, who is a PPS in the department, that he will be looking at building on the narrative because apparently this thinking is tucked away in the technical annexe, which, as I say, unfortunately I have not yet read. Some of that needs to be brought out—the importance of working with faith groups and the wider community in helping to level up the country. Of course, poverty does not happen just in cities and towns but in rural areas. That point is well made, and that is why we need to ensure that the levelling-up agenda embraces those rural communities as well.
My Lords, I first declare an interest: I used to be the convenor of One Yorkshire. At the last general election, the Labour Party and the Liberal Democrats committed themselves to bringing in One Yorkshire, if elected. The Conservatives were slightly equivocal. In the light of the Secretary of State for Levelling Up saying that we need mayors of the type that we have in London, and, given that the need that quickly comes up is to have one for the whole of Yorkshire because of its economy, people and geography, will the Minister give the House his further thoughts on One Yorkshire, because it is still committed to that dream and ideal?
Secondly, the Prime Minister has told us that the pandemic has been the biggest challenge we have faced since the Second World War. At the end of the war, there was a huge social impact on the people of the United Kingdom. Most noble Lords will remember that it was the Beveridge report that began the work of transforming this great nation. Beveridge said there was want, caused by poverty; ignorance, caused by the lack of education; squalor, caused by poor housing; idleness, caused by a lack of jobs or inability to gain employment; and disease, caused by inadequate healthcare provision, which resulted in the National Health Service and social welfare. I read the whole report. What are the giants that the Minister thinks need to be slain so that we can get to where we ended up at the end of the Second World War, when the Beveridge report led to real transformation?
Finally, the greatest thing that has been bedevilling a lot of people who feel left behind is the great gulf of income inequality, but I did not hear or read it—maybe I have missed it, but I did not see it in the report. Will the Government continue to pursue the whole question of income inequality? If that is not dealt with, I am afraid you may level up some people, but you will leave a lot in poverty. Maybe I could give the Government the motto of Barnsley to become the motto for levelling up. It is in Latin, but I will give noble Lords the translation in English: spectemur agendo—let us be judged by our actions. That is what we are looking for in levelling up, not big words.
The noble and right reverend Lord raised three principal points. The first is whether, as part of levelling up, there is still enthusiasm for One Yorkshire. My name is Greenhalgh, a Lancastrian name, and when I look at the map, Lancashire seems to have almost disappeared; it has disappeared to Cheshire and Greater Manchester, and there is a little county called Lancashire. Meanwhile, Yorkshire on a map looks absolutely humongous. I am not sure that creating a humongous entity called “One Yorkshire” will necessarily accelerate the levelling up. Maybe it will ensure the independence of Yorkshire from the rest of the country, but I am not sure that it will help us in any way.
However, there is a huge commitment to help mayors who represent functional economic areas. We have the mayor of South Yorkshire, Dan Jarvis, who is part of the education investment areas; there is regeneration of one of the 20 places in Sheffield. We are extending brownfield and bus transformation funding, exploring further flexibilities to raise CA funding thorough business rates, and looking at further and deeper devolution. There are also measures in West Yorkshire with Tracy Brabin, who is far keener on this levelling-up White Paper than the noble Baroness, Lady Hayman, who managed to dredge up some person I have never heard of in the Conservative Party—an individual in Shropshire. Tracy Brabin welcomed it. She is receiving education investment areas, extended brownfield funding, support for family allocations and bus transformation funding—all of it seems to be going into West Yorkshire. There is a commitment to, at least, parts of Yorkshire that shows a true commitment.
I am not going to say that this is the Beveridge report—even though it is a signed copy—but it is a substantial document with technical annexes, and only time will tell whether we deliver against our missions.
On the third point, on income inequality, I do not think that is an end point. I do not think we are all equal; I believe that the starting line needs to be equal. Everyone needs an opportunity and we need to equalise opportunity, but some of us will take that opportunity and go further in life, and that is why I am a Conservative.
My Lords, I declare an interest as the president of the National Association of Local Councils. It is good to see a recognition of the role of parish and town councils in developing improvements in their localities and creating a better quality of life, but is the Minister aware that most of the funds that have emerged from the shared prosperity fund are not available for parish and town councils to bid for, even though they are delivering the services? Will he undertake to have another look at that, so that they can really do a good job instead of having to recreate structures especially for bidding purposes?
My Lords, I thank the noble Baroness for raising that on behalf of parish and town councils. I think she is saying that they are excluded from the UK shared prosperity fund, as things stand. The UK shared prosperity fund money has not yet been spent. There has been the community renewal fund, which is like a pathfinder. I will take that away, go back to my department and understand some of the thinking; it is a fair point. Another fair point is that we need to make it easy for people to apply. We do not want to see a lot of money spent on the bureaucracy of grant applications; we want to help people back into work and to get on with their lives.
My Lords, I declare my interest as a non-exec at Ofsted. I am far less depressed than the noble Baroness, Lady Armstrong, although I was on her committee. I was delighted to see education as a mission in the Statement. That key stage 2 ambition is highly ambitious, and so it should be. What I cannot quite see is how early years fits into that and how the foundation years have been addressed. Given that they are quite literally the foundation years, can my noble friend please say a bit more about that?
My Lords, I first pay tribute to my current boss, the Secretary of State, for his role in building on the substantial achievement of the noble Lord, Lord Adonis. I served in local government when the noble Lord pioneered the academy programme, and I worked very hard to open up the first academy in my council, which transformed the lives of people in Hammersmith. Then the free school programme, like a lot of government policy, built on that thinking. We know that schools are the engines of opportunity, and in this White Paper we see a real commitment to continuing that programme of introducing more academies and more free schools.
My noble friend is quite right: it is far harder to achieve success if you do not have that strong foundation in early years. People’s potential is often almost set for them. If you do not get—
Sorry, I just heard a bit of chuntering. I am not sure it was adding very much.
The noble Lord is throwing out words such as “Sure Start”. That was an example of how not to govern: to throw loads of money in an incontinent way, set things up and then see it slowly withdrawn. That is not the way to transform people’s lives.
I will respond to my noble friend in writing on how we deal with the issue, because it obviously involves DfE and others.
My Lords, 2030 will be 20 years since Michael Gove became Secretary of State for Education. Two-thirds of pupils currently achieve the expected standards in literacy and numeracy at the end of primary, which the noble Baroness, Lady Wyld, just referred to. Mission five of the White Paper anticipates this jumping magically to 90% by 2030. The child who takes those SATs in 2030 starts reception this September. What is going to change for that child’s journey through primary school? The Minister talked about the details earlier. Let us have the details on the transformation of primary school that is coming.
Okay, test the Minister’s knowledge on the details of a policy area he is not Minister for—I am not sure that is very constructive. It is important to measure progress; that is a start point. I remember schools in my part of London at which 50% did not meet the minimum standards of employability, so we start in a better place and are setting a mission to be in a far better place by 2030. As I said, the commitment in this White Paper—and I am sure there are many other commitments—is to continue ensuring that there are schools of choice in local areas to which parents want to send their kids to give them the best possible start in life.
My Lords, I thank the Minister for taking questions on this Statement, and in so doing declare my interest as chairman of the Office for Strategic Coordination of Health Research. I welcome the focus on health and extending healthy life expectancy as part of this levelling-up agenda. Are the Minister and Her Majesty’s Government content that the opportunities afforded by the passage of the current Health and Care Bill through your Lordships’ House and this Parliament are being fully exploited and addressed in terms of the levelling-up agenda for health, with particular reference to the co-ordination between local government and institutions providing healthcare with regard to addressing the disparities that drive inequalities in health outcomes and the research agenda at a local level, which needs to be addressed to achieve these objectives?
My Lords, it is an incredibly good question from someone who actually knows what he is talking about. I thank the noble Lord for raising this. I declare an interest as the son of a vascular surgeon who ran his service for more than 30 years in our local hospital. One of the great frustrations, of course, is the Berlin Wall between health and social care, which this Bill is trying to address. As someone who spent 20 years without becoming a vice-president of the Local Government Association—it did not give that to me, so I cannot declare that interest—I can say that it is important to address that. The systems need to come together, which is the commitment, to ensure that we do not have that friction between the two and that we get the care organised in the most efficient way possible to give people the best possible start and a healthy lifestyle so that they can reach their potential.
Elective Care Recovery
Commons Urgent Question
My Lords, I shall now repeat in the form of a Statement the Answer to an Urgent Question made in another place:
“Mr Speaker, the Covid-19 pandemic has had a huge impact on healthcare systems everywhere. The NHS has performed incredibly, caring for Covid and non-Covid patients alike and delivering the vaccination programme that has helped us to open up this country once again. Throughout the pandemic, we had to take steps to make sure that we could treat those with the greatest clinical need and that we provided a safe environment for those who needed Covid care.
As a result, there is undeniably a huge Covid backlog that needs urgent attention. The number of people waiting for care in England now stands at around 6 million, and we know that this figure will get worse before it gets better. Not only that, but our current best estimate is that 8.5 million people who would normally come forward for treatment have not done so during the pandemic. But we are pulling out all the stops to help the NHS recover and to make sure that patients are receiving the right care at the right time.
Honourable Members will be aware that the Government have invested more than £8 billion in the NHS in the three years from 2022-23 to 2024-25. As part of the new health and social care levy, we will be putting huge levels of investment into health and social care over the coming three years. All the time we are announcing new solutions for how we can make sure that the NHS is on the firmest footing for the future.
On Friday we launched a call for evidence that will inform an ambitious new vision for how we will lead the world in cancer care. As the Prime Minister announced earlier today, we are setting out some tough targets on cancer. We want to ensure that 75% of patients are diagnosed with cancer or have cancer ruled out within 28 days of a GP referral, and to get the backlog of people waiting more than two months for their cancer treatment to pre-pandemic levels by March 2023. Today the NHS has also announced the launch of a new platform, My Planned Care, which will provide patients and their carers with relevant and up-to-date information ahead of planned treatment. This includes information on waiting times for their provider.
I am under no illusions about the fact that our health system is facing an enormous and unprecedented challenge. That is why we are doing everything in our power to support the NHS and its patients, recovering services to reduce waiting times and deliver more checks, operations and treatments. We are faced with a once-in-a-generation challenge. We know that we must get this right. We are working with the NHS and across Government to deliver a targeted and far-reaching plan for elective recovery, and we will update the House at the earliest possible opportunity.”
I thank the Minister for repeating that Answer; I am very glad that he did not bash the Dispatch Box. I remind noble Lords that this Urgent Question is only 10 minutes, so let us have quick questions. The facts that 1.1 million people are waiting for scans and tests, and that the House of Commons Library says that half a million people with suspected cancer will wait longer than the two-week target, mean that it is a shame that the Government’s plan to deal with this, which was due to be published today, was pulled late last night. I will not speculate about whether this was an argument between the Prime Minister and the Chancellor of the Exchequer, but I really hope that the Government are not playing political games with our NHS while 6 million people wait for care. Will the Minister please tell us when the elective recovery plan is now due to be published? Not that long ago, the Prime Minister announced a new target that no one should wait more than two months for a diagnosis. Is that an example of lowering standards because this Government have failed to meet them, or is it a temporary measure?
I thank the noble Baroness for not speculating. All I can say about the elective recovery plan is that there have been active discussions between my department and the Treasury, and we expect to publish it very soon. On waiting lists, we are looking at how we can best target the backlog. We know that about 75% of patients do not require surgical treatment but require diagnostics. About 80% of patients requiring surgical treatment can be treated without an overnight stay in hospital. Around 20% of patients are waiting for either ophthalmology or orthopaedic services. We are quite clear about what the issue is, and we hope to publish the elective recovery plan very soon.
My Lords, the Government have set out in some detail the scale of the waiting list for elective surgery in secondary care, but are absolutely silent on the backlog in primary care. Is that because there is no plan to deal with the backlog in primary care, which has an inevitable knock-on effect on hospital care?
We are looking at elective recovery all the way through; some of that will be in secondary care but, clearly, some of that will be in primary care. One of the issues that we want to be sure of is that we have more and more diagnoses, which is why we have rolled out many community diagnostic centres. We are looking to tackle the complete backlog, which is why we have committed an additional £2 billion this year and £8 billion over the next three years and why we will publish the elective recovery plan very soon.
My Lords, there are 20,000 more cases of cancer in the deprived population compared to other populations. Deprived people not only get cancers at a higher incidence but have late diagnoses, find it difficult to access the services and die earlier. What plans do the Government have to address this inequality in cancer outcomes?
The noble Lord raises an important point. He may well have seen coverage last week about the cancer plan as well as the Secretary of State’s commitment to what he called a “war on cancer”, given his own experience and how many people have experience of losing a relative or loved one to cancer. That shows that diagnosis and treatment of cancer remain the top priority, and they will be prioritised with increased elective capacity. We encourage anyone with potential cancer symptoms to come forward. On health inequalities, the systems will be expected to analyse their waiting-list data by relevant characteristics, including age, deprivation and ethnicity, and by speciality. The aim is to develop a better understanding of local variations in access to and experience of treatment and to start developing detailed operational action plans to address any inequalities in treatment.
The noble Lord rightly raises the issue of our brilliant workforce, who are at the heart of our plans for recovering services. The NHS’s delivery plans are focused on how we can transform these services and do things differently, not just asking staff to do more of the same. The monthly workforce statistics for November 2021 show that a record number of staff are working in the NHS, with over 1.2 million full-time-equivalent staff, which is over 1.3 million in headcount. This includes record numbers of doctors and nurses. In addition, we are recruiting new staff and focusing on different recruitment programmes and on retention, which many noble Lords have raised. We want to make sure that the excellent staff in our health system are happy and kept happy.
My Lords, I declare my interest as chairman of King’s Health Partners. The Minister rightly identified that an important proportion of this increased waiting list is those requiring elective surgical intervention. How does he propose that the additional capacity will be created to address this important demand, beyond the question on an appropriate workforce just raised by the noble Lord, Lord Hunt of Kings Heath, as well as infrastructure and, beyond that, the development of novel models of care that ensure that elective surgery can be delivered safely and to a high standard?
We hope that the funding will deliver around 9 million more checks, scans and procedures, and we hope to support our aim for the NHS to deliver around 30% more elective activity by 2024-25, compared to pre-pandemic levels. As part of that, we have allocated £2.3 billion to increase the volume of diagnostic activity, and we are rolling out at least 100 further community diagnostic centres by 2024-25 to help with the backlogs of people waiting for clinical tests such as MRIs, ultrasounds and CT scans. These increases will allow the NHS to carry out 4.5 million additional scans by 2024-25, increasing capacity and enabling earlier diagnosis.
My Lords, today I received a message from a member of the public who said that a relative had been told by their NHS doctor that they could not even give them a timeframe for when treatment would be available, but that they could ring a private hospital where treatment would be available in a couple of weeks. Does the Minister acknowledge that there is a real conflict in resources between private and public? What will the Government do to deal with people left in that really difficult situation?