House of Lords
Monday 24 October 2022
Prayers—read by the Lord Bishop of Exeter.
Introduction: Lord Murray of Blidworth
Simon Peregrine Gauvain Murray, KC, having been created Baron Murray of Blidworth, of Blidworth in the County of Nottinghamshire, was introduced and took the oath, supported by Lord Sharpe of Epsom and Lord Sandhurst, and signed an undertaking to abide by the Code of Conduct.
Introduction: Lord Johnson of Lainston
Dominic Robert Andrew Johnson, having been created Baron Johnson of Lainston, of Lainston in the County of Hampshire, was introduced and took the oath, supported by Lord Benyon and Lord Hamilton of Epsom, and signed an undertaking to abide by the Code of Conduct.
Oaths and Affirmations
Lord Keen of Elie and Baroness Golding took the oath.
Death of a Member: Baroness Blood
My Lords, I regret to inform the House of the death of the retired Member, the noble Baroness, Lady Blood, on 21 October. On behalf of the House, I extend our condolences to the noble Baroness’s family and friends.
Food: Imports and Security
To ask His Majesty’s Government what assessment they have made of the impact of the current level of the pound on food imports and food security.
My Lords, I beg leave to ask the Question in my name on the Order Paper and refer to my interests as set out in the register.
My Lords, I declare my farming interests as set out in the register. The depreciation of the pound should not have a direct impact on household food security; however, it may have an indirect effect if increased import costs cause the price of food to rise. It is not for His Majesty’s Government to set retail food prices. Through regular engagement, Defra will continue to work with food retailers to explore the range of measures they can take to ensure the availability of affordable food.
Given the unprecedented food inflation we have seen—the highest level for 40 years—and the fact that farmers and consumers are facing unprecedented challenges, will my noble friend the Minister take this opportunity to boost farm productivity at home to stabilise food security and to boost self-sufficiency in food, which for fruit and vegetables is a woeful 16%? This is a one-off opportunity to help farmers and consumers with both their budgets and food productivity and growth.
My Lords, we enjoy a high degree of domestic food security and self-sufficiency but we are not complacent about it. We have responded to recent events, as in the food strategy, putting food security at the heart of the Government’s vision for the food sector. It is absolutely our intention to help farmers become much more productive in the two sectors that the noble Baroness mentioned, particularly in horticulture but also in areas such as seafood. Our farming reforms are designed to support farmers to produce food sustainably and productively alongside delivering environmental improvements, which of course we all benefit from.
My Lords, will the Minister focus for a moment on the inexorable increase in the number of food banks being used by people who simply cannot afford to shop elsewhere? This is a real problem. Fortunately for the United Kingdom, people have so far been generous in supplying food banks, but even now we are reading and learning that some food banks are simply running out of food. This is a pretty serious state of affairs and I hope the Minister will assure the House that it is being looked at.
The people who run food banks are some of the best people in our society, and any of us who have had anything to do with them are in awe of the work they do. Household income is a complex issue across many different sectors, and the Government’s job is to support households, as we are through our £37 billion investment. This includes £500 million to help with the cost of household essentials, including food, and brings the total funding and support to £1.5 billion. We certainly work with the food bank sector to make sure that for any problems it faces, if the Government can influence it, we ease those problems and help it do the work that it does.
One of the constraints on the production of home-produced fruit and vegetables has been the availability of labour. We have been receiving mixed messages from the Government on their attitude to seasonal workers. Can the Minister confirm what the current government policy is please?
We are firmly supportive of the Institute for Agriculture and Horticulture that the noble Lord has been so instrumental in setting up and running. We want to make sure that we are improving the skills available and that those skills reflect how young people want to go into an industry now. They want portable qualifications that they can take into different areas of farming, agricultural production or the food industry. Improving skills is an absolute priority. We will not get the improvements in areas such as horticulture unless we improve the skills base. That is why we are determined to see organisations such as TIAH succeed.
My Lords, the poorest 20% of the population spend a higher proportion of their income on food. This makes them vulnerable to the effects of changing food prices. They are the very people who need to eat a good-quality, balanced diet to maintain their health. Will the Minister undertake to lobby his colleagues in other departments to ensure that they are aware of the health effects of insufficient food and nutrition and to ensure that both benefits and free school meals are extended to cover the gap in rising food prices?
The noble Baroness is absolutely right that food inflation adversely affects those on the lowest incomes and she is right to raise the issue of healthy food for children. We have increased the value of our Healthy Start vouchers to £4.25 a week and spent around £600 million a year ensuring an additional 1.25 million infants enjoy a free, healthy and nutritious meal at lunchtime following the introduction of the universal infant free school meal policy of 2014. I am very happy to keep her and other noble Lords abreast of other conversations we have in the context of food and the work happening across government to help families deal with the cost of living crisis.
My Lords, could my noble friend assure us that, when he is helping to increase the productivity of farming in all its spheres, it will be done with the best science available, so that it will improve not only farming but nature at the same time?
We operate on the basis of the best scientific evidence. Sometimes the evidence presented to Ministers can be conflicting, and we have to make a value judgment. Scientific advice underpins our new farming systems, and there is a determination to produce food sustainably and reverse the catastrophic declines in species that we have experienced in recent decades—which, as the Dasgupta review pointed out, has an economic cost as well as a cost to our environment.
I thank the Minister for his responses here, but, given the current value of the pound, which is making our exports so attractive, what are His Majesty’s Government doing to seize this opportunity to grow our exports of British produce and therefore support and really encourage our fantastic and hard-working farmers?
The right reverend Prelate is absolutely right: there are areas for growth in our farming productivity. We want to see what we can produce. We are more than self-sufficient in produce such as lamb and poultry, but we want the opportunity to export as well. There are huge opportunities in horticulture, which is why we are working really hard with that sector to improve the productivity of food production right across the piece, and to look at the export opportunities that quality foods can achieve.
My Lords, the fact is that a small number of global food companies are making huge profits out of the current crisis, which is affecting not only consumers but farmers as well. Why do not the Government use the powers in the Environment Act to take action on supply chain regulation to make sure that everybody shares in the profits available there? Furthermore, why do not the Government take action to curb financial speculation in the food markets, because that is at the heart of the problem here?
I am very happy to take up any specific cases where the noble Baroness feels that undue influence has been applied to the supply chain. We have complex supply chains in this country; she is quite right to state that some companies are based overseas. However, where we find problems we can take action, not just through the Environment Act but through the Groceries Code Adjudicator, which this Government also set up.
My Lords, the Energy and Climate Intelligence Unit report last week found that the combined impacts of climate change as well as oil and gas prices have driven up food prices by £11.4 billion—that is £407 per household. Obviously, that is much more serious for those on lower incomes. Of that £407, £170 is due to climate change and £236 is due to oil and gas prices. That really tells us, if we ever need reminding, how much the food system is dependent on fossil fuels. Can the Minister agree and support the transition now to agroecological food systems? Can he give us any reassurance that the new ELMS subsidy system will be back on track with the announcement of the new Prime Minister?
I think that it is back on track with the existing Prime Minister, or the one that is still there as we speak. I assure the noble Baroness that the very basis of ELMS is an agroecological understanding of our soil standard, getting proper functioning ecosystems to support the food that we produce—so I can absolutely give her that assurance.
Vehicles: Purchase Price and Running Costs
To ask His Majesty’s Government, further to the report by Fair Charge Driving Away from Fossil Fuels, published on 5 July, which found that if there were parity in purchase price and running cost, 100 per cent of drivers would choose electric rather than diesel or petrol cars, what steps they are taking to ensure that price parity is reached as soon as possible.
My Lords, while the upfront purchase price for electric vehicles remains higher than for their petrol or diesel equivalents, in many cases these vehicles are cheaper to own and run. Generous tax incentives are in place, which, alongside fuel and maintenance savings, reduce the total cost of ownership.
My Lords, the Fair Charge report highlighted the discrepancies in VAT for private and public EV charging. As energy prices rise, the discrepancy becomes even greater in real terms. There is a realistic danger that EVs will be seen as too expensive, although the Government, of course, get a greater income from tax as energy prices have risen. I realise it is difficult for the Minister to know what government policy is likely to be later this week, but will she undertake urgently to press whoever happens to be running the Treasury to reduce VAT on public charge points to 5%, in order to encourage EV take-up among all sections of society?
I am very happy to outline what government policy is. As the noble Baroness will know, and as is always the case when taxes are referred to, all taxes are kept under review. It should be stressed that the reduced VAT on domestic supply reduces bills for households by £5 billion a year. Most people do not charge their electric vehicles exclusively at public charge points. However, I accept that that discrepancy exists and, as I said, we keep taxes under review.
My Lords, does the Minister believe that the UK strategy on battery production is still viable, particularly given the recent media reports related to Britishvolt and the decision to move the production of electric Minis to China from Oxford? Does that show a loss of confidence in the strategy?
I do not think it is a loss of confidence in the strategy. The Government’s intention is that the UK remains at the forefront of EV manufacture, innovation and batteries; that is why we have the Faraday fund and the automotive transformation fund. All these elements are really important, but I accept that some companies will come into the market, and some will leave. There will be some flux, but at the moment, we are not concerned.
My Lords, that sounds like a very laissez-faire attitude. What discussions have the Government had with BMW about this very unfortunate decision?
As far as I am aware, the Department for Transport has not had any discussions with BMW about this very unfortunate decision. However, I will inquire with colleagues in BEIS as to whether they have. But, as I say, there are always changes within any particular manufacturing sector. None of us wants the Mini to be produced in China and it may well be that other models come back to the UK.
My Lords, I declare my interest as an owner of an electric Mini and a diesel car. The electric Mini is one of the best cars I have ever had. It costs nothing to run because I charge it from sunlight from my solar panels. What on earth are the Government doing by allowing this icon of British industry to be changed and moved to China?
Of course, a lot of the design and innovation that went into the Mini did come from the UK, but the Government are clearly not going to get involved in some decisions by private companies as to where they do their manufacturing. However, we can provide support to companies to make sure that they do manufacture in the UK and that is why we have the automotive transformation fund.
My Lords, can the Minister reassure the House that the end-life of EV batteries will not be landfill? Also, can she update the House on government support for research into the remanufacturing of EV batteries?
It is really important that we understand what happens to batteries throughout their lives. It is the case though that there are 20 million EVs on the world’s roads already and there is no evidence to suggest that their lifespans are any different from those of a petrol or a diesel vehicle. We expect that many EV batteries will have a guarantee of about eight years, or 100,000 miles. As for the end of their lifespan, it is very important that we focus on recycling. Of course, the Government are focused on that, and I will write to the noble Baroness with more information.
Is now not a good time for His Majesty’s Government to have a whole look? We have the strategy of 2030 ahead of us, when petrol cars are supposed to disappear, but at this point in time we have a situation where electric cars are hugely expensive; they are not available at a competitive price for ordinary families. Ordinary families living in tower blocks in my former constituency cannot recharge those cars, so is it not time that we had a look at the whole strategy openly and took a little time about it to ensure that we have a policy that is workable in the future, taking into consideration the point added by my noble friend on the Bench below?
The price of electric vehicles has fallen dramatically over recent years, and that was helped by the Government providing quite significant grants in the early years to ensure that the prices were lower. There are now 24 models that cost less than £32,000 new—
If I may finish—because I too would not buy a new car for £32,000—the second-hand market, in my view, is the key to getting widescale acceptance from, and affordable vehicles to, the consuming public. The second-hand market is getting stronger. The biggest suppliers to it are the fleets, and we are working with them to ensure that their models get to the second-hand market.
My Lords, the transition to electric vehicles is vital to the survival of our society as we know it; the impact of climate change is even worse in many other countries. The report sets out some sensible recommendations to help on the way. Which, if any, of the three or two-plus-two recommendations does the Minister reject, and why?
I am afraid that I am not familiar with the recommendations in the report.
My Lords, do the Government have a strategy to deal with financial incentives being given by the Chinese Government to entice British firms to move to China, and if so, what is it?
I will have to refer to the relevant department, but it is of course the case that the UK Government also provide support to various companies to invest in the UK and to create jobs here. All countries will have their own strategies, but I will write to the noble Baroness with more information.
Will my noble friend agree to speak to her colleagues at Defra about the huge shortage of electric charging points on our inland waterways? There is a disproportionate amount of diesel and petrol boats, particularly on the Thames, which are heavily polluting—I declare an interest as an owner of an electric boat—but the reason that there are not more electric boats is simply the paucity of charging stations.
My noble friend raises a very important point. The Government are very focused on the decarbonisation of the maritime sector, whether that be inland or on sea, so I will certainly speak to Defra, but I will also write to my noble friend, because I think that there is more that I can say on inland waterways.
My Lords, is it not even more important to get people to stop using their cars as much as possible, whether they are electric, diesel or petrol, and go on the train? Is not that even more difficult, as I found this morning, when the 8.30 am and the 9.30 am trains from Edinburgh were cancelled because there were no staff available? The noble Baroness, Lady Ramsay, and the noble Lord, Lord Maxton, are stuck on a train. They were turfed off at Preston and had to catch another train. That is not reliable. What is the Minister doing to get reliability in our long-distance trains?
I absolutely agree with the noble Lord. There are some circumstances on our trains where the service is not very good at all. We are working very closely with some of those providers that are not providing the level of service that we want, because the Government’s goal is to provide choice. If people want to be able to use the trains, we have to have trains that actually work. We are very focused on that, and I am sure that the noble Lord will have seen comments from the Secretary of State for Transport regarding how we feel about the services being offered.
Police National Computer
To ask His Majesty’s Government what procurement criteria they used in awarding Fujitsu a £48 million contract to upgrade the Police National Computer; and whether their decision to award that contract took into account that company’s role in developing the Horizon software for the Post Office.
My Lords, every contract award is considered on its own merit and in line with procurement regulations and evidence of historic supply and delivery. The police national computer is a critical service used by UK policing and other agencies to maintain public safety and security. The contract to replace PNC mainframe hardware technology, ensuring the future of the service, was awarded following market engagement on grounds of time, cost and risk to continuity of service.
My Lords, the Government have awarded contracts to Fujitsu of over £3.5 billion since 2013, including nearly £500 million this year, of which £48 million was on the police national computer. Considering that Fujitsu’s Horizon software was at the heart of the Post Office sub-postmaster scandal, why do the Government believe that Fujitsu software has the necessary integrity for the critical data in the PNC? How is a business-as-usual approach on the award of contracts before the official Post Office inquiry concludes prudent? Lastly, how does this government largesse give Fujitsu any incentive to contribute to the massive compensation cost for sub-postmasters, which is set to fall on the taxpayer?
I thank the noble Baroness for her questions. The police national computer has been hosted on Fujitsu mainframe technology for over 30 years, and existing Fujitsu-leased hardware technology would not have been viable to use beyond March 2022. It required urgent replacement, which is why Fujitsu was selected. The market engagement exercise held in 2020 to review options to replace the Fujitsu hardware and support found no viable alternative solutions, and that is why Fujitsu received this contract—which, I should also stress, is making up the difference between now and when the new police national computer comes into operation. I could go on, but there was basically no alternative.
My Lords, the Minister has given us a very interesting answer. Basically, he said that it came as a big shock to the Home Office that this equipment had expired. Can he tell us what confidence he has in the Home Office’s management of IT contracts of various sizes—bearing in mind, for example, the grotesque overspending on the replacement of the Airwave system for emergency services communication, and the fact that that contract has overrun by five or six years already, with no sign that the costs are going to be met?
I am afraid that that is not what I said to the noble Baroness or to the House at all. I have confidence that Fujitsu will deliver on this.
My Lords, I declare my interests, and I support the noble Lord, Lord Harris. The emergency services network is technology rather than IT. Not only is it five years delayed, but I think the costs have risen by five times, from around £2 billion to over £10 billion. As yet, I am afraid that the Government are trapped in a terrible contract with Motorola, which is delivering a legacy solution but is also charged with delivering the new one. Unfortunately, it is being paid £250 million more for the old system per year, so there is no great incentive. It is a great worry, not only for the Government but for the police, that this system is not yet delivered.
I understand where the noble Lord is coming from, and I commend him for his work on this and other matters. Obviously, I am here more to talk about the subject of the Question, but I will take his concerns back, find out more information and write to him.
My Lords, to return to the question asked by the noble Baroness, Lady Ludford, about Horizon, the words that come to my mind are: “scandalous”, “miscarriage of justice”, “broken lives”, “families financially ruined”—and yet Fujitsu has paid nothing. Talking has gone on long enough. I know there are legal cases, but should not the Government stop any contracts to Fujitsu? It is just morally wrong.
My noble friend is right to point out that we are trying to get to the bottom of the Horizon issue. That is why Sir Wyn Williams has been tasked to hold his statutory inquiry. Fujitsu is a core participant and is co-operating fully. Accountability depends on evidence, so I think it is proper to let Sir Wyn hear it before judging any possible consequences.
My Lords, was any consideration given by the Government to the public perception of awarding such a vital contract to a company with such a shocking record? Can the Minister confirm clearly whether Fujitsu was the only company that actually bid for this contract? If that is the case, how can we be assured of a genuinely competitive process? How will this improve standards? How do we get good value for money and end up with results which, when you consider the role of this company, is truly shocking? I endorse all the words of the noble Lord, Lord Polak: it is appalling that this company can get anywhere near another government contract.
As I said earlier in answer to another question, it was the only viable alternative. Other companies were invited in and, for reasons most of which were around the time it would take to implement new systems, Fujitsu offered the only solution. Of course, I agree with the public perception argument; however, I do not think we had any alternative.
My Lords, given that the flaws in Horizon software by Fujitsu were the cause of an awful lot of distress and misspent money, are the Government confident that so far there have been no similar mistakes on the police national computer?
The Government are confident. There has been one incident of data loss, but it was a human error, as opposed to a software error and all that data has been recovered. So, yes, the Government are confident.
My Lords, the Horizon scandal involved 736 innocent sub-postmasters being prosecuted; four suicides; many more individuals and families torn apart by the prolonged cover-up of technical problems; and a cost to taxpayers of more than £1 billion so far. I know this Government’s reputation for financial probity is at a very low ebb, but can the Minister explain how Fujitsu was able to land this complex and sensitive contract when the Government had removed it from the list of preferred suppliers in the last year?
I have to say again that I think I have answered most of the noble Baroness’s question already. Fujitsu is not a preferred supplier, but it is able to enter open competitions for government business. Fujitsu has not been found guilty of any fraud or other crime related to Horizon and is complying with all inquiries. There was no viable alternative.
My Lords, I am grateful that my noble friend accepts the public perception point, because more taxpayers’ money is going into this company at the moment. Inquiries take a long time, but in relation to other inquiries, such as contaminated blood, there has been a process to expedite payments and, as the noble Baroness has outlined, some people have taken their own lives. Surely, we should expedite the public funds that need to be in the pockets of those people harmed by Post Office and potentially Fujitsu.
I agree with my noble friend. So far, to date, the Government and Post Office have made good progress on delivering compensation to postmasters through the scheme fairly and quickly—82% of eligible claimants have now received an offer, and £52 million has been offered in total. I accept that it is not enough, but it is being done.
My Lords, the Government have presided over the economy and vital sensitive infrastructure, including tech infrastructure, for 12 years. If, as the Minister suggests, there was no viable alternative, why not?
Unfortunately, as I said, this relates to the delay in the rollout of the new system. The new system was delayed because of unforeseen complexity. I should state for the record that statistics around the police national computer are mind-boggling in their complexity: 30 million people’s information; 68 million vehicle records; 61 million driving licence holder records; 1.34 million daily transactions; 114 million checks per annum. It has to work; therefore, there was no viable alternative.
My Lords, could the Minister tell the House whether external consultants were involved in deciding that this contract should go to Fujitsu and, if so, how much were they paid for coming to the rather defeatist conclusion that there was no alternative?
The process was subject to all the usual Cabinet Office rules. I do not know how much external consultants were paid; I will find out.
My Lords, will the Minister confirm—I think he has been trying to tell us—that Fujitsu has an unassailable monopoly on this contract?
No, it does not have an unassailable monopoly. It obviously has a long history with the police national computer. When the police national computer finally breathes its last, its monopoly effectively does the same.
Will the noble Lord agree that over the last century pretty well every government contract that has been put out becomes a monopoly? Is it not time that we had a new approach to how such contracts are handed out?
That sounds like a very sensible suggestion, and I will take it back to the department. I have not necessarily been around for as long as the noble Lord described.
Regency Act 1937
To ask His Majesty’s Government what plans they have, if any, to amend the Regency Act 1937.
My Lords, the Regency Act sets out the arrangements by which a regency is triggered, as well as provisions for the appointment of Counsellors of State. On occasion, the Regency Act 1937 has been amended so that its provisions effectively support the sovereign in the discharge of their duties and ensure the resilience of our constitutional arrangements. The Government will continue to consider their legislative programme for the remainder of the Session.
My Lords, I thank the Leader of the House for that reply. The House knows that the Regency Act is still very relevant: it is the only reason why it was possible to open the current Session of this Parliament. Indeed, when you look at the final year of Her late Majesty’s reign, there were elements of a regency about it. Does the Minister not think it time to approach the King to discuss the potential amendment of this Act, and in particular Clause 6, which at the moment defines regents in relation to their line of succession to the Crown? Otherwise, are the Government happy to continue with a situation where the counsels of state and regency powers may be exercised by the Duke of York or the Duke of Sussex, one of whom has left public life and the other of whom has left the country? Is it not time for the Government to approach the King to see whether a sensible amendment can be made to this Act?
My Lords, I thank the noble Viscount for the Question but he will of course understand that I will not discuss any private conversations with His Majesty or with the Royal Household. His Majesty King George VI set out in his gracious message to Parliament that there can be a need
“to consider contingencies which may hereafter arise, and to make such provision as will, in any event, secure the exercise of the Royal Authority.”—[Official Report, Commons, 26/1/37; col. 766.]
In that spirit, the Government will always consider what arrangements are needed to ensure resilience in our constitutional arrangements, and in the past we have seen that the point of accession has proved a useful opportunity to consider the arrangements in place.
My Lords, can the Government indicate that they will at least consider that the person they go to in the first consideration will be somebody who actually undertakes royal duties, or at least some part of them, at present?
My Lords, again, I will not comment on specific circumstances. I have set out the position in response to the noble Viscount, and, obviously, any consideration would also have to take place in close consultation with the Royal Household.
Hereditary Peers By-election
The Clerk of the Parliaments announced the result of the Conservative by-election to elect two hereditary Peers, in place of Lord Astor of Hever and the Earl of Home.
Thirty-seven Lords submitted valid ballots, and the notice detailing the results is available in the Printed Paper Office and online. The successful candidates were the Earl of Effingham and Lord Ashcombe.
My Lords, I am grateful to the House for allowing me to make a few remarks after this latest clutch of by-elections; I remind the House that five new Members of Parliament have been elected since last Thursday with scarce a murmur from anywhere. I want to put into Hansard and on the record a little more information about the by-election that was held last week for the new Cross-Bench Peer.
I find the way in which these results are announced completely unsatisfactory. Obviously, that is not a criticism of the clerk—it is precedent—but we have notice of new Members of Parliament only by means of a very lightly drawn, barely noticeable script on the Order Paper. The only information we get, apart from the recent embellishment, which tells us the total number of votes cast, just tells us who has won the election. More information should be provided when the result is announced. I am unable to give it for the result that has just been announced because I would have to go along to the Printed Paper Office to get it, but I can give some information about the by-election for the new Cross-Bencher which was held last week. There were 10 candidates for that vacancy and 30 electors, so, three electors for every candidate. Twenty-two of the 30 voted; I make that a turnout of 73%. The winning candidate got 11 votes and the runner-up got 10 votes, so a quick calculation tells me that that is a majority of one, which of course makes this a hyper-marginal seat.
I simply say to the House that a by-election result has been announced without the figures and without even the winning candidates being present, let alone the losing candidates—usually, the losing candidates stick around as well for a normal by-election. With no criticism of the people elected whatever, it is without any reference to the House of Lords Commission, unlike any life Peer or Cross-Bencher appointed to this House. There really is need for more information to be presented to the House when the clerk reads out the result. I commend that to the House authorities and to the Leader, who is in his place and who I know takes these things very seriously.
My Lords, before the Minister responds, I wonder whether there may be an opportunity for he and I to discuss this through the usual channels. Not only do we have hereditary Peers by-elections, against which this House has voted in principle—with no disrespect to those candidates who come into the House, whom we welcome—numerous times. We also have additional Members coming to the House as Ministers—about 10 in the past couple of years—and now there are reports of a further prime ministerial resignation honours list from the Prime Minister, who has been in post for only about a month. It seems that we ought to have a little more thought about the membership of this House and, as the Burns report says, not having a House of quite the size it is, but one that allows us to do our best work in the best way. It would be helpful if we could discuss in a sensible, practical and respectful way ensuring that this House is of a size that enables us to do our job in the best way possible.
My Lords, the noble Baroness talks about the size of the House, and I noticed the difficulty of finding a place on your Lordships’ Benches today. On the usual channels, I prefer to have such discussions in private, rather than on the Floor of the House. As far as new Peers are concerned, I simply say that I look forward to welcoming the eight new Labour peers who were appointed on the recommendation of the leader of the Opposition.
Business of the House
Motion on Standing Orders
That, in the event of the Supply and Appropriation (Adjustments) Bill having been brought from the House of Commons, Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with on Tuesday 25 October to allow the Bill to be taken through all remaining stages that day.
I apologise, my Lords: I was not expecting to have to intervene on the previous matter, but, without prejudice to what we say in private, I heard what the noble Baroness said. I beg to move the Motion standing in my name on the Order Paper.
Sanctions (Damages Cap) Regulations 2022
Motion to Approve
That the draft Regulations laid before the House on 20 July be approved. Considered in Grand Committee on 18 October.
Relevant document: 11th Report from the Secondary Legislation Scrutiny Committee
My Lords, on behalf of my noble friend Lord Goldsmith of Richmond Park, I beg to move the Motion standing in his name on the Order Paper.
Armed Forces (Covenant) Regulations 2022
Armed Forces (Service Court Rules) (Amendment) (No. 2) Rules 2022
Motions to Approve
That the draft Regulations and Rules laid before the House on 20 July be approved. Considered in Grand Committee on 18 October.
Relevant document: 11th Report from the Secondary Legislation Scrutiny Committee
My Lords, on behalf of my noble friend Baroness Goldie, I beg to move the Motions standing in her name on the Order Paper.
Energy Prices Bill
Relevant documents: 14th Report from the Delegated Powers Committee and 4th Report from the Constitution Committee
Clause 1: Domestic energy price reduction schemes for Great Britain
Clause 1 agreed.
Clause 2: GB electricity scheme: supplementary provision
1: Clause 2, page 3, line 7, leave out “negative” and insert “affirmative”
Member’s explanatory statement
This amendment and others in the name of Lord Lennie make the regulations in the relevant sections subject to the affirmative procedure.
My Lords, this group of amendments is all about making various clauses subject to the affirmative procedure in your Lordships’ House. I give notice that we intend to divide the House on Amendment 25.
The amendments affect Clauses 2, 3, 6, 7 and 16, and Schedules 1 and 2, making them subject to the affirmative procedure. The Government seek to justify some of the use of the negative procedure by pointing out that the Secretary of State already has the power to modify or revoke the schemes in Clauses 2 and 3, and Clauses 6 and 7 for Northern Ireland.
Clause 16, which confers powers to make it a temporary requirement on electricity generators to make payment regulations, uses the affirmative procedure on first use and the negative procedure thereafter. The Government’s justification for a temporary requirement represents a significant intervention in the electricity market. This clause will define the main parameters of the scheme. After this, the Government believe that interest will wane, with only minor or technical amendments likely to occur, therefore justifying the negative procedure thereafter.
The justification for the Schedule 1 powers is that, although the Government recognise that the powers are significant, they are necessary to allow the schemes for relief of GB businesses. The Delegated Powers and Regulatory Reform Committee report, established in haste last week, says that by including paragraph 3(2) of Schedule 1 the Government have completely ignored the recommendation contained in its report:
“No attempt has been made to limit the powers or to ensure that they will be subject to parliamentary scrutiny.”
Nor was any “compelling justification” offered to support the Government taking these powers. Schedule 2 powers relate to Northern Ireland, where a similar provision is proposed.
In Clauses 21 and 22, the subject of Amendment 25, the Government assert that their approach would include a fuller period of consultation with relevant stakeholders providing suppliers with earlier certainty. However, what guarantee is there that these steps will ever be taken? The department also considers that any delay could have negative consequences for those who were to benefit from the scheme. However, there are enough examples of regulations being scrutinised after the fact—for instance, those relating to Covid—and even after this primary legislation, which, as it stands, took effect from 1 October 2022. I cannot see why this cannot be applied here.
The pace of things is another justification offered by the Government. The affirmative procedure would not allow certainty that the licence modifications would follow and this in turn would inhibit suppliers making required operational changes, slowing delivery this winter.
There does not seem much justification for the Secretary of State taking these overwhelming powers. Clause 22 applies similar powers to Northern Ireland, also without the same compelling justification. It allows the Secretary of State to tackle barriers to delivering implementation of the schemes as necessary. There appears no justification for this at all. The Delegated Powers and Regulatory Reform Committee is firmly of the view that any power conferred by Clause 22 is inappropriate and that the Government should act by,
“imposing a time limit on the exercise of the power which is commensurate with other time limits contained within the Bill.”
I beg to move.
My Lords, I shall speak briefly to some of the amendments in my name in this group. This is the only time I shall intervene. Although I have tabled amendments in the second and fourth groups, I do not propose to speak to them. What I am about to say covers the same points.
I declare an interest as a member of the Delegated Powers and Regulatory Reform Committee. I do not speak for the committee; the report does that. Over the weekend, I read the Government’s inadequate response to the report. I am grateful for the speed with which the Government responded, as I suspect other committee members are. That was useful but their response was completely inadequate. It is significant that the government response makes no mention at all of the Delegated Powers Committee’s report from November 2021, Democracy Denied? The Urgent Need to Rebalance Power between Parliament and the Executive.
Clause 22(5), which is not referred to in the government response, is the subject of Amendment 28. According to paragraph 14 of the Delegated Powers Committee’s report, Clause 22(5) is, in effect,
“a Henry VIII power because it allows the effect of legislation, including primary legislation, to be modified by a direction.”
Paragraph 14 also says:
“There are no limits on the kinds of requirements which may be imposed through the directions power.”
Paragraphs 14 to 18 say firmly that the powers in Clause 22 are inappropriate. Clause 22 brings in what is referred to as “disguised law”. This was referred to in the November 2021 report as “camouflaged legislation” and an “unacceptable ploy”.
The Delegated Powers Committee report on this Bill refers to the memorandum supplied with the Bill, particularly paragraphs 154 to 162. Referring to the government memo, the report says that it
“does not explain the full range of the things which can be done”.
It goes on to say, in paragraph 16:
“We are also not convinced by the reasons given in the Memorandum for the power not being subject to parliamentary scrutiny.”
As such, the Delegated Powers Committee report says that the Government appear
“to have completed ignored the recommendations”
in the committee’s report of November 2021.
I want to make a more general point, which I shall not repeat on the other group of amendments. I was not a member of the Delegated Powers Committee when its November 2021 report, Democracy Denied?, was published, in tandem and in co-operation with a report from the Secondary Legislation Scrutiny Committee of your Lordships’ House, entitled Government by Diktat: A Call to Return Power to Parliament. Both reports—that from the Delegated Powers Committee and that from the Secondary Legislation Scrutiny Committee—were about Parliament and the Executive. They were not about this House and the elected House of Commons. Parliament and the Executive are what this is about.
Both reports were debated in this House on 6 January under a Motion tabled by the noble Baroness, Lady Cavendish of Little Venice. I have no criticism of the Minister or his team for reasons I shall make clear. I do not expect he has read either report; I am not sure any Minister has. I do not hold the Minister responsible. He and his government colleagues are taking advantage of the slack role Parliament has played to bequeath powers from Parliament to the Executive.
On Wednesday 20 July this year—a significant date because it was the day before the Summer Recess started—both the Secondary Legislation Scrutiny Committee and the Delegated Powers and Regulatory Reform Committee, including Peers who had been members of those committees last year when the reports were prepared, took evidence on the reports from the then Leaders of both Houses and First Parliamentary Counsel. There was no sign that anybody had read anything about the 6 January debate on both of them. It was abundantly clear that neither of the then Leaders had even been briefed on the views of this House.
Parliamentary counsel have clearly continued to draft Bills, such as this Bill, which have “completely ignored” the recommendations of the Delegated Powers and Regulatory Reform Committee report, Democracy Denied? Why have they done this? Repeatedly, parliamentary counsel are producing Bills which transfer powers from Parliament to the Executive. It is parliamentary counsel doing this—they draft the Bills.
During the exchanges on 20 July in respect of what is referred to as Question 16, I asked the First Parliamentary Counsel, Dame Elizabeth Gardiner, about her saying during our evidence that day that counsel
“have that discussion on a daily basis with the teams and with the Ministers about the nature of what they are asking for”.
I pointed out that, in my time as a Minister, in both Houses, over 12 years—it is in the minutes—
“I understood … that parliamentary counsel took instructions from the department’s lawyers and Ministers never got involved with parliamentary counsel.”
Dame Elizabeth’s answer was:
“I think things have changed a lot ... Probably we do meet policy officials and Ministers more frequently on Bills than we would have done 30 years ago”.
I have checked on this. I think this change, or breach of convention, has happened in the past 12 years. My experience, particularly in two departments, as I recall, when I served in this House—there were four altogether, but two in particular—was that it was specifically said to me when I joined, because Bills came up, that in general the Government accepted most of the recommendations from the Delegated Powers and Regulatory Reform Committee. It was the norm to accept the majority. I was repeatedly told that. I think this change, or breach of convention—it is certainly a lapse in the accepted standards of conduct—has happened only since 2010, when somebody started playing wild with parliamentary procedures, and the House of Commons was blindsided by it. That, I think, is very dangerous.
I am prepared to say that I think the old way was best. If lawyers gave instructions for policy officials so that the policy officials would have to say to department’s lawyers, “This is what we want to do, and what our Ministers want to do”, the lawyers would then use the legal structures to put that case to parliamentary counsel. By and large, the system worked. I think it would be far less likely that clear recommendations made by Parliament would be “completely ignored” if the lawyers were the ones who gave the instructions to parliamentary counsel, as was the case up until 2010.
I trust the lawyers here to follow the conventions. Quite clearly, parliamentary counsel work with the Government—let us make no bones about it. These days, they do not even have their own office block in Whitehall, to which I was once invited to when I was a Minister in the other place. I know the way they work; they are now ensconced inside the Treasury. They work for the Government; they are not independent.
The fact of the matter is that they draft the Bills. They are drafting Bills, one after another—this is only one, but there have been others in recent years, and in the last few months in particular—after the two major committees of this House publish reports, as in November last year, criticising the transfer of powers from Parliament to the Executive. Parliamentary counsel seem not to have given a tinker’s cuss about that. They have just carried on doing what Ministers want to get more power.
I do not think the Secondary Legislation Scrutiny Committee or the Delegated Powers Committee have seen any evidence that their agreed recommendations are being taken on board by the Government. The House of Commons in particular needs to wake up, and fast, to what has been happening, for the sake of our democracy. I think this Bill would be a good place to start.
My Lords, I apologise for not speaking at Second Reading. I did listen to the Minister’s opening speech and I had made my views clear in an earlier briefing. My views sync very closely with those of the noble Lord, Lord Rooker. Quite honestly, this Government are out of control—we have known that for months, if not years—and it is time they understood they are not acting in a democratic manner. This is a “something must be done” Bill, and I understand why something must be done. However, it has so little detail, and the Government are expecting us to take this on trust. I do not trust the Government, and so there is a big problem here for me.
There are two big issues. First, these energy price schemes will make the difference between people being able to pay their bills or not pay their bills, and whether they can feed themselves, clothe their kids and that sort of thing. We have to be sure of all this detail. The Government are proposing to fill in about 90% of the Bill’s details at a later date, and they expect us to just wave it through. We cannot know the impact of this Bill on ordinary people.
Secondly, the Government have been determined to protect the profits of oil and gas companies, which we all know is a piece of idiocy when we look at the climate emergency. That profit will probably be reinvested in creating more opportunities for the oil and gas industry. The Government take a different approach to renewables, and this will cause a long-term disruption to renewable development. I would argue that investors will be encouraged to invest more in dirty oil and gas, rather than in clean renewables. That is a huge bailout for all those stranded carbon assets, and seems to me to be a completely illogical way to move forward.
I sense that the Government might mean well—actually, I am being too generous. I understand that something must be done, but this is not it. I want the Minister to explain those two issues. Will people be able to pay their bills? Will this cause more investment in dirty oil and gas?
My Lords, I will speak to Amendments 27, 31, 34 and 40. What I have to say is very much in line with the speeches that have already taken place and I will not detain the House for long, except to make this point again. We understand the urgency of the Bill, for the health of households and their heat and energy over the next winter, and that of businesses as well, but there is a lot else included in this Bill that need not be rushed through in the same way.
I turn to Amendment 27. On reading the Bill, I was quite shocked—the noble Lord, Lord Rooker, forensically went through this in principle—that it says on page 21, in Clause 22 (4)(a), that these directions “must be in writing”. These are key bits of government policy, where a Secretary of State or a person who is subject to directions under this clause—we do not even know who it might be—is able to just write what should happen. Our own amendment would substitute that with
“made by regulations subject to the affirmative procedure”.
Amendments 31 and 34, with Amendment 34 relating to Northern Ireland—it is great to see the noble Lord, Lord Rogan, here following his contribution during the Second Reading—would remove the powers of sub-delegation.
Amendment 40 is around the sunset clause, which again the Opposition has, quite rightly, majored on. Here, we have put down a two-year limit.
Clearly, the Bill goes way beyond the authority given to the Government and the Secretary of State, without reference to Parliament. Some of these amendments must be voted on for the Bill to be put right and sent back to the House of Commons.
My Lords, I begin by expressing my wholehearted support for the speech given by my noble friend Lord Rooker. He has so comprehensively discussed these issues that it is barely necessary for me to support him, but I intend to do so wholeheartedly, as I have said.
Perhaps I had better say that I was previously a member of the Secondary Legislation Scrutiny Committee and I am now a member of the Delegated Powers and Regulatory Reform Committee, as indeed is my noble friend Lord Rooker, as he said. I participated in the discussions of the two reports that he referred to: Democracy Denied and Government by Diktat. It is amazing how little response there has been from Ministers to those fundamentally important reports; fundamental in relation to this House and the other place, and in relation to the control—I use the word “control” advisedly—of ministerial actions and decisions.
The latest report of the Delegated Powers and Regulatory Reform Committee—the 14th report of this Session—on the Energy Prices Bill, says in paragraph 10:
“We are disappointed that, by including paragraph 3(2) of Schedule 1, the Government appear to have completely ignored the recommendations contained in our report.”
That is true: the Government have completely ignored the recommendations made in the committee’s report. Paragraph 10 continues:
“No attempt has been made to limit the powers or to ensure that they will be subject to parliamentary scrutiny.”
There is no provision for that under the Government’s proposals—no provision for parliamentary scrutiny of any kind. Paragraph 10 goes on:
“Nor do we consider that anything close to a compelling justification has been offered for these powers”,
and their inclusion in what the Government intend to pursue.
Paragraph 11 of the report says:
“Accordingly, we consider that the legislative sub-delegation provided by paragraph 3(2) of Schedule 1 is inappropriate. We also take the view that the power to give directions is inappropriate to the extent that paragraph 3(2) enables general directions to be given which would have legislative effect.”
This is Ministers giving themselves powers to give general directions that would have legislative effect. In my long experience—35 years in the other place, and a long time in this House—I have never seen proposals like this, ever, from any Government. That is the reality of it. I quote from paragraph 12 of the report:
“Accordingly, for the same reasons we consider that powers conferred by paragraph 3(2) of Schedule 2 are inappropriate.”
The Delegated Powers and Regulatory Reform Committee is chaired by a person who sits on the Government Benches—a privy counsellor and former Cabinet Minister in the other place. There is no doubt that he is a good chair of the committee. He, along with other Conservative committee members, has signed up to this report, which is a damning indictment of what the Government are doing. It is time for this House and the other place to call a halt.
I thank all noble Lords who spoke on this group. I understand many of the points that they made.
Let me first respond to the interesting points the noble Lord, Lord Rooker, made. I honestly do not think there has been any radical change from when he was a Minister. When he was speaking, I was racking my brains trying to remember. I have been responsible for bringing a lot of Bills to this House, taking them through, developing them in three different departments, and I honestly cannot remember ever having a direct meeting with OPC to give it the so-called instructions the noble Lord referred to. Clearly in PBL meetings, which he will be familiar with, they attend and report to PBL. However, I suspect my experience has been very similar to his experience as a Minister, in that Ministers are involved in discussing policy intent with the department, officials and department lawyers. The instructions to parliamentary counsel are given by department lawyers, obviously acting on ministerial direction and steers about what we want to achieve through certain policies. I can only speak for myself, but I think the noble Lord is saying “a conspiracy too far” here. I genuinely do not think things have changed rapidly since his time.
I will respond briefly to the noble Baroness, Lady Jones of Moulsecoomb, who posed me two questions. She asked, “Will this Bill will help people with their bills?” Absolutely, that is the whole purpose of it. It is to provide a subsidy to people for their bills, albeit indirectly via the suppliers, because otherwise they would be incredibly high, as the noble Baroness knows. Secondly, let me address her further conspiracy theories about this somehow being a hidden subsidy to the oil and gas companies. The noble Baroness is completely wrong. The oil and gas companies are not in scope of this Bill at all and there are no subsidies involved.
I am so sorry to interrupt, but I would like the Minister to withdraw the word “conspiracy”. I have legitimate and reasonable fears. It is not a conspiracy; it is actual fact.
It is not a fact. The noble Baroness is absolutely wrong. Anyway, I am happy to take her reassurance on that. She was posing the question and I am giving her a direct answer. There are no subsidies involved for oil and gas companies in this Bill. They are not even in scope of the Bill. To answer her question directly, it is about direct support for people to help them with their electricity and gas bills.
Group 1 speaks to delegated powers in the Bill, including procedure, sun-setting use and scrutiny. I thank all those who spoke, those who tabled their thoughtful, well-intentioned amendments and the noble Lords, Lord Cunningham and Lord Rooker, who spoke on them. I also pay tribute, as the noble Lord, Lord Rooker, did, to the work of the DPRRC for its report on the Bill published last week. I have carefully considered and responded to it.
The first set of amendments would make certain regulations in the Bill subject to the affirmative procedure. I will go through all of them in turn. Amendments 1, 2, 3 and 4 relate to the energy price guarantee schemes in Great Britain and Northern Ireland. The Committee will be aware that the schemes have been operational from the first of this month. I am happy to tell the Committee that the regulations in the Bill to designate the schemes will be extremely brief and will simply identify scheme documents. They will therefore be technical in nature and I deem them perfectly appropriate to be subject to the negative procedure.
Amendment 7 would make regulations in Clause 15 subject to the affirmative procedure, and Amendments 17 and 18 would do the same for all regulations in Clause 16. I reassure the Committee again that regulations under Clause 15 will enable bodies to be designated as delivery partners and, following precedent, it is appropriate to use the negative procedure for these essentially technical regulations—no new policy is being made here. The first set of regulations under Clause 16, relating to the cost plus revenue limit, are already subject to the affirmative procedure. Further regulations that will be tabled under this clause are, again, likely to be technical amending regulations, so we have kept the affirmative procedure for the important stuff that I think the House will be interested in and would want to debate, and we have used the negative procedure for the technical amending regulations.
Amendments 33 and 36 would make regulations for the energy bill relief scheme in Great Britain and Northern Ireland, respectively, subject to the affirmative procedure. I am happy to confirm to noble Lords that the regulations are already subject to the affirmative procedure, as confirmed in Clauses 9(6) and 11(6), and Clause 26(4), (5) and (11) provide for exactly the type of affirmative procedure that noble Lords are asking for. As such, regulations will be implemented via the “made affirmative” procedure in the first six months from the date that the Act is passed. After that point, they will be subject to the normal draft affirmative procedure. The amendment also seeks to remove the provision for regulations to provide a power to give directions. I will deal with this and other amendments to the sub-delegation powers as I address amendments from other noble Lords.
Amendments 22, 24, 25, 27, 29, 40, 41 and 42 relate to powers to make energy licence modifications under Clause 21 and directions under Clause 22. Broadly, the amendments would make these powers subject to the affirmative procedure and implement a sunset provision of two years, subject to future extension. The powers in Clauses 21 and 22 have been included in the Bill to provide the Government with the ability—
Could the Minister give us an example of the circumstances under which the powers in this clause to amend licences would be made by a legislative Act that is not a regulation and would take the form of him just writing down, “Do it”? What circumstances would make this necessary? I find the arguments of the noble Lords, Lord Rooker and Lord Cunningham, rather compelling. The wording of subsection (5) is astonishingly wide.
I accept what the noble Lord says about it being astonishingly wide but, if he will have a little patience, I will quote some examples to him shortly, and he will see that they are not the biggest items that he can think of.
The powers in Clauses 21 and 22 have been included in the Bill to provide government with the ability to react at pace to unforeseen delivery barriers. Making them subject to the affirmative procedure could delay the provision of support to consumers this winter and put at risk the point when energy suppliers have certainty over the final delivery requirements.
The approach that the Bill takes to parliamentary procedure is not unprecedented: for example, a direction under the Electricity Act 1989 has already been used to deliver the energy bills support scheme in Britain. Furthermore, the powers in Clauses 21 and 22 may be used only “in response to” the current energy crisis,
“or in connection with the Act”
or with regulations or schemes made under it. They are therefore time-constrained in that respect. Amendment 39 would reduce the sunsetting provision for powers under the cost plus revenue limit from five years to three and a half years. We consider the five-year sunset appropriate for the Government to respond to the immediate effects of the energy crisis, while ensuring ongoing protection for consumers if gas prices remain abnormally high for a prolonged period. The upcoming consultation will allow the Government to further define the intended use of this power.
Amendments 40, 41 and 42 seek to sunset the powers under Clauses 21 and 22 to two years, with an extension permissible by affirmative regulations. The Bill already makes clear that Clauses 21 and 22 must be used only “in response to” the current energy crisis, or “in connection with” the Bill or with regulations or schemes made under it. Generally, those other provisions in the Bill are already subject to sunsetting. A crisis is, by its nature, something extraordinary and temporary. I submit that the circumstances and timing in which the Government can use this power are therefore already appropriately constrained by the Bill.
Three amendments have also been tabled that relate to requirements to consult. Amendment 19
“would require the Secretary of State to consult before utilising … powers”
on the temporary cost plus revenue limit. It is the Government’s clear commitment to consult as soon as possible; therefore, we do not believe that this amendment is necessary.
Amendment 21 would require the Secretary of State to consult on pass-through requirements on intermediaries. As the schemes are being stood up at pace, this requirement could delay much-needed support being passed through to consumers this winter, and therefore could be positively harmful.
Amendment 23 would require modifications to licences under Clause 21 to be subject to consultation with the relevant bodies. As I mentioned, this clause ensures the Government’s ability to react at pace to unforeseen barriers to delivering the schemes. A requirement to consult would, again, simply delay our ability to deliver the schemes effectively and quickly, and therefore would be counterproductive.
Finally, a set of amendments have also been tabled which would remove certain powers from the Bill, including the opposition of the noble Lord, Lord Rooker, to Clause 22 standing part of the Bill. Clause 22 and its powers enable the Government to issue directions to energy licence holders and the Northern Ireland regulator in connection with schemes under the Bill and in response to the energy crises. The ability to issue directions of a general character is necessary to deliver support under the Bill and to tackle barriers to their implementation. Amendment 26 would limit the Secretary of State’s powers to issue directions of a “general character” to those only of a “specific” character. Amendment 28 would remove Clause 22, which provides that, when a direction to a person conflicts with existing requirements in an “enactment or instrument”, such requirements should be “disregarded”. Currently, we envision limited circumstances in which these circumstances will arise.
I will now give the example asked for by the noble Lord, Lord Kerr: the Government may need to issue a direction to the Utility Regulator in Northern Ireland to ensure that the timing of electricity regulated tariff reviews is aligned with similar reviews in Great Britain. This may be necessary to ensure effective administration of the energy price guarantee in Great Britain and Northern Ireland. In doing so, it may be necessary to rely on Clause 22 to resolve any potential conflict between the terms of the direction and the statutory requirements of independence applying to the energy regulators in Great Britain and Northern Ireland, and any existing requirements as to timing in the supplier’s licences, to enable all parties to comply with the direction for tariff review alignment. Without this, licence holders or the Northern Ireland regulator may be uncertain about their legal position, and this could have the effect of households and businesses missing out on appropriate and timely support. This plays to the noble Lord’s points. I realise that there is a suspicion that there is some malign intent behind these clauses, but they are, essentially, designed to deliver support at pace in a fast-moving environment and to provide the Secretary of the State with the powers to ensure that this happens in a legally correct manner. I reassure the noble Lord that there is no hidden agenda here.
I plead innocent to any imputation of malign intent, but it is an astonishingly wide power. The Minister’s explanation related it solely to Northern Ireland. It is not limited as the Bill is drafted to Northern Ireland, but it would be relatively easy by combining subsections (3) and (5) so to limit it. That would cause me to worry much less about this apparently extraordinarily wide-ranging power to overrule the law of the land or all existing regulation without making a new regulation.
The noble Lord asked me for an example. I have provided him with an example of one means that we envisage may be necessary. There could be other licensed modifications that we have not envisaged yet. As I said, this legislation has been drawn up at pace, using the excellent resources of lawyers and parliamentary counsel. It has been enacted very quickly. This is a clause that we think is necessary in order to, if you like, cover something that we have not thought of and that we have missed out in the Bill, but it is limited to use in the specific circumstances that the Bill requires.
Just for the record, Amendment 28 refers to subsection (5). Does the Minister think, and is it his advice, that subsection (5) is a Henry VIII clause or not?
It is a power to give directions. Whether it qualifies as a Henry VIII power, I suppose depends on your definition of a Henry VIII power. Perhaps I may consult the lawyers and give the noble Lord a more detailed answer.
Additionally, there may be other circumstances—as I just said to the noble Lord—not yet known in which Clause 22(5) will be necessary to enable directions and the schemes that they are giving effect to to be implemented effectively with legal certainty and without undue delay. As I said, it is not unprecedented. A similar measure was included in the 1989 electricity regulations which we have just used to help implement this provision, and there has not been widespread abuse by a number of Secretaries of State from both parties who have been in office with that existing power since then. I understand noble Lords’ concerns, but history demonstrates that this is not unprecedented and noble Lords’ concerns are unwarranted.
Regarding Amendments 31 to 35, it is not uncommon for highly technical schemes to use tertiary legislation to provide for the detail of schemes, or for secondary legislation to enable directions to be made or provide that functions may be exercisable by persons named within them. These powers are crucial so that payments can be made for the energy bill relief scheme as quickly as possible—as I said, we are acting at pace, and I am grateful for the support of noble Lords to get this legislation through at pace—and to enable us to make any necessary changes to the technical nature and detail of the scheme as it becomes operational.
It is always the Government’s intention that delegated powers are appropriately limited and justified. Many powers in this Bill are already subject to the affirmative procedure and are expressly time limited. Other powers are subject to the requirement to use them in relation to the energy crises or in connection with other time-limited provisions in the Bill.
I return to the question from the noble Lord, Lord Rooker. I am told that it is not a Henry VIII power, but it has the same effect.
I knew it was a mistake to ask the lawyers for an answer, but there we go. Whenever I do these Bills, I always understand why I went into engineering and not the law when I did my degree.
However, I also emphasise the urgency of this Bill, which I believe the whole House understands, and I am grateful for Members’ support. Families and businesses up and down the country are hugely exposed to the energy crisis. It is crucial that the schemes—and I think all noble Lords share this aim—are rolled out and delivered in the way they are intended as quickly as possible and without delay. I would contend that provisions in the Bill, including the breadth of certain powers, enable to us to do just that.
I hope that I have been able to provide the House with sufficient assurances about how the Government will use the powers that we seek to take and hope that the noble Lord will be able to withdraw his amendment.
My Lords, that is an interesting explanation from the lawyers about whether it is a Henry VIII clause. If it looks like a Henry VIII clause and it smells like a Henry VIII clause, it is a Henry VIII clause.
My noble friends Lord Rooker and Lord Cunningham made the important point that the DPRR Committee in its report has condemned the powers contained in Clause 22. There is no getting away from it: if it is pace that the Government are seeking, subjecting those instruments to the affirmative procedure would not significantly inhibit the pace at which they operate. The powers are vast and huge, and the example that the Minister has given is an acceptable one, but it is not the only circumstance that one can envisage. One can envisage the powers being used not by the noble Lord but by a succeeding Minister, in a way that is unforeseen by him. Therefore, the concerns remain. However, having said that, I beg leave to withdraw Amendment 1.
Amendment 1 withdrawn.
Clause 2 agreed.
Clause 3: GB gas scheme: supplementary provision
Amendment 2 not moved.
Clause 3 agreed.
Clauses 4 and 5 agreed.
Clause 6: NI electricity scheme: supplementary provision
Amendment 3 not moved.
Clause 6 agreed.
Clause 7: NI gas scheme: supplementary provision
Amendment 4 not moved.
Clause 7 agreed.
Clause 8 agreed.
Clause 9: Reduced energy charges for non-domestic customers in Great Britain
5: Clause 9, page 8, line 19, at end insert—
“(4A) Regulations under this section must apply to non-domestic customers—(a) that signed a fixed tariff agreement with their energy provider after 1 December 2021, and (b) on variable rates tariffs.”Member’s explanatory statement
Currently non-domestic customers who signed a fixed tariff agreement after 1 April 2022, and those on variable rates tariffs, benefit from the reduced energy charges. This amendment would extend this support to those customers who signed fixed tariff agreements between 1 December 2021 and 1 April 2022.
My Lords, I shall speak also to Amendment 6 in this group. Amendment 5 relates to the extension of the energy bill relief scheme for non-domestic customers. I hope that it is something that the Minister will be able to agree or reaffirm from the Dispatch Box, because it is really very straightforward. When the scheme was announced by the Government, only businesses that signed a fixed agreement after 1 April 2022 and those on variable rates were set to benefit. Businesses with energy agreements signed before this date—I repeat, that was 1 April—were unable to get a subsidy to their unit prices.
In the debate on the economy and the growth plan of 2022 in the House on Monday 10 October—so not so long ago—my noble friend Lord Fox raised this with the Minister, who responded that the Government would be “revising the cut-off date” so that contracts taken out between 1 December 2021 and 31 March 2022 would be “eligible for relief”. Can the Minister confirm that this is still the Government’s intention? If it is, given the uncertainty that businesses are facing with the current state of government, will he accept my Amendment 5, which seeks to put that commitment in the Bill? I see no reason why that should not be the case, to give absolute clarity and greater certainty to the non-domestic sector.
On Amendment 6, the alternative fuel payment scheme is intended to deliver a one-off payment of £100 to UK households which are not on the mains gas grid—I declare my own interest in that I rely on biomass and oil—and therefore use alternative fuels such as heating oil to heat their homes.
Powers in the Bill will enable the Government to deliver support via electricity bills under a similar delivery model to the energy bills support scheme, which, as noble Members will know, is a £400 non-repayable discount for eligible households to help with their energy bills, as announced in April by then Chancellor and soon-to-be Prime Minister Rishi Sunak. Households who are eligible for but do not receive alternative fuel payments or the £100 heat network payment—a very round number, as we saw on Second Reading—because they do not have a relationship with an electricity supplier, for example, will receive the £100 via this alternative fund, which will be provided by a designated body. According to the Government, they will set out timing and details of this payment soon. I look forward to hearing from the Minister whether we have any more detail at this time.
It is estimated that more than 4 million people in the UK are off the mains gas grid and rely on other means to heat their homes. As I know in Cornwall, fuel poverty is greater in rural areas than in urban areas and, crucially, it is often deeper, meaning that rural families need to save more money to make sure their energy bills are affordable. This amendment says that it is vital that a fast and easy way to use this system be set up to get these payments to them. Amendment 6 would ensure that payments are made directly to consumers’ bank accounts, which is clearly the quickest and easiest way to make the biggest difference to rural and off-grid customers. Therefore, I hope the Government will be able to accept this amendment, but I certainly hope that the Minister will be able to give more detail and a timeframe so that these particular consumers know their future. I beg to move.
My Lords, our Amendments 37 and 38 seek to backdate the electricity and gas price reduction scheme to 8 September, which was the day the Government first announced the energy price guarantee. Apart from anything else, this would produce money to be passed on to customers’ bills. It may seem a small change, but it would be extremely popular among all UK households.
I thank the noble Lords, Lord Rooker, Lord Teverson, Lord Lennie and Lord McNicol of West Kilbride, for their amendments, which seek to make changes to the schemes to reduce energy bills—namely the alternative fuel payments, the domestic energy price guarantee and the energy bill relief scheme.
First, turning to Amendment 5 tabled by the noble Lord, Lord Teverson, on the energy bill relief scheme, I am pleased to note that he agrees with the decision to extend the eligibility date for customers on fixed-term contracts back to 1 December 2021, which my noble friend Lord Callanan confirmed in this House on 10 October. This will be implemented in regulations. I can give further reassurance that when the scheme was first announced on 23 September, it stated that all non-domestic customers on variable contracts, as well as deemed and flexible contracts, will be eligible for the scheme. Given that these details have already been published and will be implemented in regulations, the proposed changes to the Bill are unnecessary. I hope that gives the noble Lord the reassurance he was seeking.
I turn to the amendment tabled by the noble Lord, Lord Rooker, which seeks to remove Clause 9. This clause provides for the establishment of the energy bill relief scheme in Great Britain. This scheme will provide a price reduction to ensure that all businesses and other non-domestic customers—for example, charities and public sector organisations such as schools and hospitals—are protected from excessively high energy bills over the winter period. Under the provisions in Clause 9, the Secretary of State may, by regulations, reduce the amount that all eligible businesses and other non-domestic customers would be charged for their gas and electricity. Clause 9 allows for this through the calculation of a notional wholesale price for gas and electricity, referred to as the government-supported price, with a discount being provided which pays the difference between the government-supported price and the wholesale price.
The clause provides for regulations to detail how the Government may calculate this reduction. We intend for the scheme to run initially for a six-month period. Schedule 6 to the Bill allows for the scheme to be extended for up to three further consecutive periods for up to two years. We recognise that the diversity of contracts between suppliers and their non-domestic customers makes implementation of the scheme complex. This clause therefore provides for necessary powers to support successful delivery of all aspects of the scheme, and to allow the Government to respond appropriately to any rapid changes in the market. I therefore ask that Clause 9 stand part of the Bill.
Turning to Amendment 6, tabled by the noble Lord, Lord Teverson, on the alternative fuel payment scheme, households eligible for the domestic alternative fuel payment scheme in Great Britain will receive £100 as a credit on their electricity bill under a similar delivery model to the energy bills support scheme; we are exploring a similar route for Northern Ireland. We understand that consumers are already experiencing significantly increased living costs, and that is why the Government are delivering this support to customers as fast as possible and have committed to delivery of the payment this winter. Requiring that payments be made direct to consumer bank accounts would significantly slow down the ability to deliver, meaning that the target to pay this winter would be unlikely to be met. This Government do not have an established direct relationship with the relevant consumers, and a bespoke delivery scheme would need to be created, which would take significant time.
Delivering the domestic alternative fuel payment as a fixed credit amount via electricity bills will be significantly quicker than other possible routes and means that customers need take no action to receive it. Consumers eligible for the domestic alternative fuel payment but who do not have a relationship with an electricity supplier will receive the £100 via the alternative fuel payment discretionary fund. Details on how to access this fund will be confirmed shortly.
Turning to Amendments 37 and 38, on the domestic energy price reduction scheme, tabled by the noble Lords, Lord Lennie and Lord McNicol of West Kilbride, I thank the noble Lords for their amendments to enable backdating of the electricity and gas price reduction scheme in Great Britain to 8 September. The energy price guarantee was implemented from 1 October so that consumers can expect to pay well below the scheduled increase in the price cap to £3,549 for a typical dual-fuel household. The energy price guarantee has been designed to work in combination with the May 2022 cost of living package to ensure that the most vulnerable households will see little change in their energy costs between last winter and the coming winter. I therefore see no need to alter the operative date of the energy price guarantee schemes. I hope that on this basis, the noble Lords will not feel it necessary to press their amendments.
My Lords, I very much welcome the Minister’s statement on the backdating to December, and that the obligation that was accepted by the Minister earlier this month is to be repeated. I thank her for that, but I am not quite sure where we are with households that are due the £100 but who do not have a relationship with an electricity supply company, which is probably not insignificant. Before I withdraw Amendment 5, can the Minister be a little clearer on how this is going to function?
The noble Lord makes a good point. As he correctly observes, it is difficult to implement in practice because by their very nature, those households do not have a relationship with their energy supplier. We are urgently looking at a delivery mechanism, with all the appropriate protections against fraud et cetera. Delivery is likely to be through local authorities, but we are still working on a precise mechanism and as soon as we have more details, we will update the House.
I thank the Minister for that. If you cannot do it directly through Ministers, then through local authorities is probably the right way to do it. I know that Cornwall council is already starting to make some preparations in that area. I beg leave to withdraw Amendment 5.
Amendment 5 withdrawn.
Clause 9 agreed.
Clauses 10 to 12 agreed.
Clause 13: Power of the Secretary of State to give support for meeting energy costs etc
Amendment 6 not moved.
Clause 13 agreed.
Clause 14 agreed.
Clause 15: Role of other bodies in giving support for meeting energy costs etc
Amendment 7 not moved.
Clause 15 agreed.
My Lords, before calling Amendment 8, I must advise the House that the noble Baroness, Lady Thomas of Winchester, will be taking part remotely.
8: After Clause 15, insert the following new Clause—
“Report on effectiveness of energy efficiency programmes in reducing energy costs
(1) Within six months of the day on which this Act is passed, the Secretary of State must review the impact of energy efficiency programmes in reducing energy costs in accordance with this section.(2) A review under this section must consider the impact of—(a) the number of homes and business properties which have increased their EPC rating,(b) the number of homes and business properties which have undergone retrofitting programmes, including— (i) fitting of solar panels, and(ii) replacement of gas boilers,(c) increases in renewable energy sources, and(d) public messaging campaigns into changing energy usage habits.(3) The Secretary of State must lay a copy of the report before each House of Parliament.”Member’s explanatory statement
This new Clause would require the Secretary of State to report on the impact of energy efficiency programmes in reducing energy costs.
My Lords, we come back to a subject we always discuss in energy Bills, whether the dormant Energy Bill or the Energy Prices Bill in front of us today: energy efficiency and demand reduction. Whatever the Government say from their Front Bench about what is being done, it is quite clear that this is not seen as a priority in reality. Indeed, as far as I have noticed, it does not feature to any significant extent in this Bill. However, although I accept that the Bill is very much about short-term measures, we still have to look forward to the medium and longer term and how we make sure that, after the payments we are making and the Bill intends to make into the future—which are substantial, with estimates varying from £40 billion to £100 billion, depending on how long these measures last—we do not go back to square one whenever such a crisis arises again, despite having spent literally billions of pounds of taxpayers’ money.
This is a very mild amendment. We are being modest because we hope that the Government will accept that we should have at least something in the Bill about energy efficiency. We are asking for a proper and comprehensive review of costs to do with energy efficiency within six months of the Bill being passed. As noble Lords can see from the amendment, we are asking for a review of the impact of
“the number of homes and business properties which have increased their EPC rating … fitting … solar panels, and … replacement of gas boilers, … increases in renewable energy sources, and … public messaging campaigns”.
I would be interested to understand where the Government are on public messaging campaigns at the moment. I understand that the almost-past Government very much resisted them. Can the Minister give us more of an idea of where we are now?
What I am emphasising here is that it is essential that energy efficiency and demand reduction should be at the top of the list of tools of energy policy as a way forward. We clearly need some reference to them in the Bill, while we are making these huge payments, to make sure that businesses are able to continue in the future and that households can afford their energy bills without going into debt—although I fear that many will in any case. That is the core of this amendment and we take this very seriously. We believe that the Government have not performed sufficiently on this during their time in government.
I will also speak briefly to Amendment 9, and I thank the noble Baroness, Lady Bennett of Manor Castle, who is not in her place at the moment, for her support. Amendment 9 looks forward to where we go after this major splurge of public expenditure. I think a consensus is coming—from consumers, consumer groups and energy companies themselves—on how we need to treat energy Bills in the future, in that we have to move to a different place. One place we could move to is a social tariff. Nothing is perfect in this world. We know that in a situation where people move out of the definition of qualifying for a social tariff, it can have negative effects on income or whatever.
A social tariff would mean those households in fuel poverty being able to solve that issue by paying a different tariff on their electricity from those not in that degree of poverty. We all know that, even without the current crisis, many millions of households are in fuel poverty. This has not been solved by Governments over the years. The long-term way is energy efficiency and demand reduction but, in the medium term, surely we should start planning now for something of the order of a social tariff. I beg to move.
My Lords, the noble Baroness, Lady Thomas of Winchester, is taking part remotely and I invite her to speak. She does not seem to be technically available at present; it is therefore open to any other noble Lord to speak to this amendment.
My Lords, first, I apologise for being unable to be present at Second Reading. I am speaking to Amendment 12, which my noble friend Lady Thomas of Winchester has also signed. It sets up the mechanism for the Secretary of State to have a strategic plan for very vulnerable people who would be extremely adversely affected by power outages—for some, probably resulting in death—and for the requirement on energy suppliers to work with the local resilience forums, which are tasked with delivering local emergency plans in communities.
I read the impact assessment with interest. On page 28, paragraph 70, headed “Disability or vulnerability”, states:
“Of those surveyed … by the ONS Wealth and Assets Survey, over 40% of adults in Great Britain have a combined financial and property wealth below £23,249. Of those poorer households 41% have a physical or mental disability ... Furthermore, households with energy-using health equipment will typically be associated with higher energy use and stand to benefit more from the volumetric scheme”.
The Minister may remember that I raised the issue of ensuring electricity supply to the most vulnerable disabled and seriously ill people, who may die if their home electricity supply is not maintained, on 11 October 2022 when the noble Baroness, Lady Kennedy of Cradley, asked a Question on energy pricing. I cited our family’s experience when my granddaughter, then aged two, who had to use a ventilator and a heart monitor faced a power outage on her south London estate. I thank the Minister for his response to my question and his being keen to reassure me and the noble Baroness, Lady Finlay of Llandaff, but I was concerned that BEIS Ministers may not be aware of what is happening in practice and how serious the problem is.
Since 11 October, I have talked to others who rely on ventilators, dialysis machines and other equipment at home. It is clear that the reality of what happened to my granddaughter in a small-scale electrical outage in south London about four years ago is, in practice, not unusual. Let me explain the process. On the advice of the consultants at the Evelina London Children’s Hospital, and as a condition of her being allowed to leave hospital for the first time aged 11 months, my son had brought her home and registered with their energy supplier that she required ventilation and a heart monitor for about 17 hours out of every 24. Without it, she would have to be taken back to the specialist hospital as her lung capacity put her at high risk of death as her oxygen levels would plummet quickly.
My son had understood that the supplier would ensure that there was an alternative supply as soon as possible. On the evening of the outage, my son called the emergency line, who were encouraging: they were on the list for an emergency generator to be delivered to their house. After one hour, it had not arrived. They were told that it could take another two hours. At that time, and because my granddaughter was still quite small, he bundled her and all her medical kit—believe me, a carful—and drove to our house, an hour away. Believe me, if you have watched a small child struggling for breath, you do not hang around.
There is absolutely no doubt that the register of vulnerable users is helpful. However, the reality of a power cut means that the small batteries in those items that they have as a back-up will not last for many hours, especially if the outage is not planned and people do not know how long it will last for. That is why the suppliers knew that they had to get a generator to my granddaughter’s house. But they failed.
My concern is that, in the event of mass outages in the cold months of January and February next year, however unlikely, much larger swathes of the country will lose electricity in a number of hours. National Grid was predicting even worse last week—even if that is also deemed to be highly unlikely—and it might mean that the whole country would be without power from late afternoon until late at night for a number of days a week in January and February.
The Disability News Service picked up on the questions that the noble Baroness, Lady Finlay, and I asked. John Pring at the DNS has been investigating current practice and how large outages would be handled by the energy suppliers, so he rang them. They said, “Talk to the Department of BEIS”, so he rang BEIS, which said, “Talk to the Department of Health and Social Care”—I have no idea why. The DHSC has not even replied, probably because it is not involved in emergency provision planning.
Many disability groups are very concerned about this coming winter too, as they, like my family, have experience of support in an emergency not being quite what was expected. Neither BEIS nor the DHSC seemed aware that the energy suppliers should be talking to their local resilience forums, run by each local authority, which have a statutory duty under the Civil Contingencies Act 2004 to deliver their local emergency health plan in the event of such an incident. However, directors of public health whom I have talked to, who are jointly employed by their authority and by the NHS, are core to LRFs, and they say that talking to energy suppliers is extremely difficult.
It is important to be clear that not all help for those whose lives depend on electricity will be on the register. Those registered with suppliers will include the elderly and the frail who must be kept warm, but they do not need individual generators at home. The LRFs need to plan with energy suppliers where generators will go in community halls or other planned venues and how vulnerable people will be taken to that venue. The current advice from suppliers to disabled people on their helpline is—wait for it—get a thermos and more battery packs. I have to say that that is causing alarm, and it tells me that proper planning is not going on, and people who are supposed to be giving advice do not know what it should be. That is also confirmed by the directors of public health whom I have talked to.
Under the Civil Contingencies Act 2004, local resilience forums are level 1 responders, and energy suppliers are level 2 responders. Energy suppliers keep the register and must liaise with them. The problem is that at the moment the LRFs are entirely reliant on the energy suppliers communicating with them. As with Covid, when the local resilience forums played a fantastic role as we went into lockdown in their communities, the possibility of a serious outage means that there needs to be real planning now because, otherwise, people will die in a power cut. All the elements needed are available through various duties on differing people; the problem is that they are not joined up. Hence my amendment, which is to try to join up the key partners at a national level through the powers of the Secretary of State to create a strategic plan, while ensuring an action plan at a local level which gives a duty to energy suppliers to maintain contact with their local resilience forums.
I ask the Minister: what formal arrangements should be in place, because they are clearly not working? Does he accept the need for a strategic plan owned by BEIS as well as energy suppliers, working with local resilience forums to ensure action plans in the event of future large-scale outages? Will he agree to meet me, my noble friend Lady Thomas of Winchester and representatives of disabled people’s groups to provide us with not just reassurance but detailed evidence of how this will work, if needed this winter?
My Lords, I am glad to say that the technical gremlins have now been slain, and the noble Baroness, Lady Thomas of Winchester, is online. I therefore invite the noble Baroness to speak.
My Lords, I am very grateful to my noble friend Lady Brinton for tabling the amendment, to which I have added my name.
There will be a lot of severely disabled people who, like me, are terrified of power cuts. We rely through the day and night on electricity to keep us alive. We are not talking about just hot drinks and hot water bottles. In my case, I am talking about a feeding pump, ventilators, riser lavatories, an electric hospital bed, two lifts, a door opener and a wheelchair that needs charging—and, of course, heating and light. There are many others much worse than I am.
In answer to my noble friend’s question on 11 October, the Minister said that the Government would do
“all we can to protect the most vulnerable.”—[Official Report, 11/10/22; col. 662.]
Can he be a bit more specific about exactly what the Government will do? The energy companies are not exactly strapped for cash at the moment, so I hope that, between the energy companies and the Government, there will be proper, practical planning for the most vulnerable customers if outages occur, which could literally make the difference between life and death.
We need reassurance on this; otherwise, we will be fearful of every winter storm. Can the Minister give us this reassurance?
May I beg the indulgence of your Lordships’ House: I was in the Grand Committee?
I am very sorry, but the Companion is quite clear: if you were not here at the start of the debate, you are unable to speak.
My Lords, I am sad that we cannot hear the words of the noble Baroness, and I very much support her amendment, because she, like me, believes that this Government are not doing anything like enough to reduce energy consumption, the amount of energy expended nor making the most efficient use of the sources of energy available to us.
Other countries are doing far more than we are. Germany, for instance, is rushing to try to reduce its energy consumption by 20% in a very short space of time; we are doing very little about that. On energy efficiency, it was only 11 days ago that the European Union countries got together to celebrate Energy Efficiency Day, and Mr Frans Timmermans, the Commission vice-president responsible for the Green Deal, stated the bleeding obvious, because he said:
“saving energy, not using energy, is the cheapest energy”.
I agree with him, given that it is perfectly possible, given the Long Title of the Bill, as my noble friend on the Front Bench pointed out, to have done far more on these issues.
In truth, from this Government, we have had scheme after scheme which has floundered and left the industry in total disarray. As a result, since I was a Minister with some responsibility for this, the amount of energy efficiency work in this country has declined by a staggering 90%. It has gone down by 50% in the past 12 months alone. What we get from the Government is a lot of fine words—the Minister trots them out from time to time—from various government documents. The trouble is that if you follow through on what is said, you discover that there is not much action to back it up.
As an example, the Clean Growth Strategy, a document produced by this Government in October 2017, stated very clearly that:
“The Government will look at a long-term trajectory for energy performance standards across the private rented sector, with the aim of as many private rented homes as possible being upgraded to EPC Band C by 2030, where practical, cost effective and affordable. We will consider options with a view to consulting in 2018”.
The consultation took place, and was in fact extended because of Covid to 8 January 2021. That was 21 months ago, yet we have still not had any evidence of a response from the Government. When are we going to get the results of the consultation and the action promised by the Government around privately rented homes?
The situation is made even worse when you look at socially rented homes, in which the vast majority of those who are less well off are living. Five years ago, that same document said that the Government were going to
“look at how social housing can meet similar standards on the same timetable.”
I understand that consultation is needed before you can go ahead, but one would have thought that by now the consultation would have started. Yet in a letter to me and many other noble Lords in the last few days, the noble Baroness, Lady Scott of Bybrook, wrote:
“The Government has now committed to consulting on introducing standards in the social rented sector. This will happen within six months of the Social Housing (Regulation) Bill gaining consent”.
The consultation has not even started for something promised five years ago.
We have a lot of fine words from the Government, but in many areas the action does not take place. This is why it is so important that we have Amendment 8 on the statute book, at least in the very minimal way that requires the Government to give us a report on what is happening and what the benefits really are.
In relation to that, I acknowledge that the Minister pointed out at Second Reading that the Government have introduced one new scheme relating to energy efficiency, called ECO+. It will somehow run alongside ECO4, which was preceded by ECO1, 2 and 3. However, we do not know how that will work. It would be helpful to have a little more detail about how the two schemes will work together.
I have a specific question to ask the Minister about this new wonder-scheme. We know from all the evidence that the previous ECO schemes have been raising improvements to people’s homes. The Government claim that those schemes have led to improvements saving people up to £1,000 a year. Looking at the ECO+ documentation, my understanding is that the scheme is in fact expected to lead to a saving for consumers of about only £200 a year. The difference between the savings of the early ECO schemes and what appears to be that of the new scheme is huge. I hope that the Minister can explain to me why that is the case.
I have a couple of amendments down, which I will speak to very briefly. Amendment 10 is based on something from the Government’s own document. On page 12 of this year’s British Energy Security Strategy—which, incidentally, they described as ambitious—it says:
“We will cut the cost for consumers who want to make improvements”
to energy efficiency by
“zero-rating VAT for the next five years on the installation of energy saving materials”.
Some of that was introduced by the then Chancellor—I cannot remember how many Chancellors ago that was—back in the Spring Statement. I welcomed this at the time, but I genuinely do not believe it went anywhere near far enough. A large number of energy-saving materials were not included in the list.
At Second Reading, I raised one such example: retrofitting a battery to an existing solar heating scheme. Introducing a battery makes a system infinitely more efficient, which is a benefit to the homeowner and a benefit to the nation as a whole because more energy can be put back into the national grid, not least at times of high demand. At that time, I proposed that VAT on additional, retrofitted batteries should be zero-rated. Batteries needed to be retrofitted because, when many schemes were first introduced, batteries were either too expensive or people did not see the benefits of them.
I then looked at some of the other items that were not in the list. I was staggered to discover that something as simple as double-glazing was not included. The figures are staggering: 86% of homes already have double-glazing but a high proportion—more than a quarter—is old fashioned and nowhere near as efficient as modern double-glazing. The relevant associations which produce the figures are firmly of the view that, if all windows could be brought up to current standards, a staggering £14.5 billion could be saved.
I am not asking the Government to pay for all the double-glazing to be done. However, we know from all the research evidence that reducing VAT would significantly help many people take on the additional burden of uprating their windows to modern double-glazing standards. Evidence has shown the impact of the reduction in VAT in other areas. I am convinced that reducing VAT on double-glazing and on some of the other items mentioned in Amendment 10 would be of enormous benefit.
Finally, I turn to Amendment 11 in my name. I draw the Minister’s attention to my earlier speeches. He has heard me speak on this subject in one form or another on numerous occasions, so I will not repeat it all. Suffice to say that all the evidence shows that this Government claim to believe that putting targets into legislation is beneficial for driving forward investment. I have 60 quotes from current and former Ministers and from government departmental documents that back up the claim that targets put into legislation ensure that action happens.
Amendment 11 is simple. It seeks to put into legislation the targets that the Government have already set for improving the energy efficiency of our homes. It would bring fuel-poor homes up to EPC level C by 2030 and all the rest of the housing stock by 2035. In this country, unlike, for instance, in the countries of our neighbouring friends in the European Union, we have far less efficient homes—15 million homes are below the appropriate energy efficiency targets set by the Government.
The industry has made it very clear that if it is now to invest in the research, training and equipment needed to start doing more work in this field, it needs to have the confidence of targets placed into legislation. The Government have refused this on numerous occasions so far, and not once have I heard a good reason from any Minister. I am optimistic that, on this occasion, I might get a decent reply. I look forward to hearing it.
My Lords, many of the amendments in this group are sensible and could easily be accepted by the Government. We on these Benches will support Amendment 8 if the noble Lord, Lord Teverson, tests the opinion of the House. The Member’s explanatory statement is exactly as the noble Lord said, and it is a modest amendment:
“This new clause would require the Secretary of State to report”—
just to report—
“on the impact of energy efficiency programmes in reducing energy costs.”
It is modest indeed, and I am at a loss as to why His Majesty’s Government are not willing to accept it.
To quote from the government website:
“Improving the energy efficiency of UK buildings is the quickest way we can support families and businesses, to respond to rising energy prices.”
I am sure we all agree. It goes on:
“Improving the efficiency of our homes could reduce our heating bills by around 20% and reduce our dependency on foreign gas.”
Again, that is something I am sure we all agree with, so these amendments are in line with BEIS’s priorities and language.
As the noble Lord, Lord Foster of Bath, said, the UK has some of the least energy-efficient housing in Europe. According to my figures, 19 million homes are estimated to be below EPC band C. His figure was 15 million; I am sure he will forgive the 4 million. In excess of 10 million homes are worse than EPC band C. Under the Conservatives, home insulation rates have plummeted. In 2013, the then Government cut energy efficiency programmes, after which insulation rates fell by 92% in 2013. Further to that, new statistics show that home insulation dropped again by 62% in the second quarter of 2022 compared with the first quarter, with only 35,000 installations being recorded. The Resolution Foundation estimates that 9 million households are paying an extra £170 per year on their energy bills as a result of these failures. Since then, the Government have botched the green homes grant, which has yet to be adequately replaced.
These amendments would help with the bills people have to pay, and they would help the Government, the country and consumers. On top of this, Labour would give the devolved Administrations the power and resources to bring every home in their area up to EPC band C or higher within a decade.
The chief executive of E.ON, Michael Lewis, has pointed out that a sustained programme of energy efficiency could have reduced the amount of energy used in UK homes by 25%. That is the equivalent of six Hinkley Point C power stations. As we have heard throughout the debate on these amendments, the cheapest energy is the energy we do not use. A simple uprating of a home from EPC band D to band C would save the bill payer some £500 a year on the basis of April prices, so if it is put to the test we will support Amendment 8.
My Lords, I thank the noble Lords for their interventions. This group includes amendments relating to energy efficiency and energy savings which would help to reduce energy costs and, of course, ensure energy supply for vulnerable consumers, which I will come on to shortly. I completely agree with noble Lords that improving the energy performance of domestic and non-domestic properties is vital in the context of affordability, energy security and fuel poverty.
Amendment 8, tabled by the noble Lords, Lord Teverson, Lord Foster and Lord McNicol, would require the Secretary of State to produce a report on the effectiveness of energy efficiency programmes in reducing energy costs. The Government already evaluate the impact of their energy efficiency programmes and publish extensive energy statistics and evaluation reports as a matter of course. There really is no shortage of published materials on these matters, and I believe that they sufficiently cover the intention of this amendment. Bedtime reading for noble Lords interested in this matter includes the Annual Fuel Poverty Statistics Report: 2021, the Household Energy Efficiency Statistics, and the English Housing Survey, commissioned annually, on housing circumstances, condition and energy efficiency in England. Therefore, I am not sure there is any more information we could provide noble Lords with, and we believe this amendment to be unnecessary.
The noble Lord, Lord Teverson, also asked about a government public campaign on energy demand reduction. As I have mentioned in this House before, I have been working with officials and we have just launched our new website on GOV.UK—we have migrated the SEA site over to the government website and updated it. We now provide home owners with a kind of home energy MOT that gives impartial recommendations and could help them save hundreds of pounds a year. It is linked to the EPC database, so it provides personalised information on people’s property. Of course, we will be rolling that out further and linking it to several other sources of advice from energy companies, charities and others, to make sure that people have the information they need to make energy efficiency savings.
Amendment 9, tabled by the noble Lord, Lord Teverson, would require the Secretary of State to formally assess the merits of introducing social energy tariffs. I would never accuse the noble Lord of wanting to go back in time or of being stuck in the past, but in 2011 the Government of which his party was a part replaced social tariffs in the energy sector with the warm home discount scheme. The warm home discount is a better scheme than the then social tariff scheme; it provides a consistent level of support, standardised across all the participating energy suppliers. It has been an improvement on the previous arrangement of voluntary social tariffs—not all companies took part in them—where the level of benefits and eligibility varied between energy suppliers.
I hope the noble Lord is not suggesting that we should go back to that time. The warm home discount was introduced as an improvement to the old social tariff system. Any new social tariff would be almost identical to the warm home discount in its design and operation. It is already a mandated, targeted mechanism to reduce the cost of energy for those in vulnerable circumstances, on benefits et cetera. If the noble Lord thinks about it, he will accept that this is a better way of doing essentially the same thing, but I do not disagree at all with the objective. In short, this proposal simply seeks to provide benefits to vulnerable energy consumers that are already provided by the existing warm home discount model, and it would add a further level of complexity to the support system. Certainly, to judge by my postbag from Members of Parliament, it is already quite a complex system with complex eligibility requirements, and I do not think we would be well served by adding to that complexity.
Before I turn to Amendments 10 and 11 from the noble Lord, Lord Foster, let me answer the questions he asked me. He compared ECO4, the current iteration of the energy company obligation, and the forthcoming ECO+, and highlighted that there could be different levels of bill savings in each one. The reason for that is that the energy company obligation is an obligation based on suppliers; it used to be bill funded and is now funded by the Exchequer. One of the elements of the mini-Budget that remains—the last time I looked—is the ECO+ announcement that I worked hard to get in there, and we will shortly be consulting on the way it works. We project lesser bill savings because we want to do more under that scheme. The latest iteration of ECO4 looks at whole-house retrofits, so it is obviously much more expensive and treats fewer whole-house property refits. We have to consult on the details of ECO+, but the idea is that it would provide a smaller number of targeted measures, possibly only two or three, such as loft insulation, cavity wall insulation and heating controls.
Even though they are both called “ECO”, they will be targeted at different parts of the market; indeed I hope ECO+ will be targeted more at the able-to-pay market—those who are not necessarily on benefits and slightly above benefit level but who are still suffering and could take advantage of some support. The noble Lord will not have long to wait. We are working on policy design now and we will consult shortly on how that will work. The House will have an opportunity to debate the regulations and it is my intention to have this up and running as early as possible next year.
The noble Lord also asked me about the PRS regulations. As he correctly said, we consulted on them; we are currently looking at the recommendations and working on a government response. If I am honest with the noble Lord, it is about getting the balance right between wanting to see improvements and operating in the private rented sector and not doing so at the expense of less rented properties being available where there are already shortages in many areas. It is about trying to get the balance right between, on the one hand, obliging landlords to improve their property and, on the other, not wanting to provide them with incentives to leave the market.
Amendment 10 would zero-rate VAT for battery storage when used to store energy generated by solar panels, and measures to reduce energy demand in domestic properties. The installation of central heating system controls and insulation draught stripping already qualify for the zero rate for energy saving materials. The noble Lord will, of course, know that changes to tax policy are considered as part of the Budget process. If he has ever had interactions with the Treasury, he will know that this is important and will be jealously guarded. Tax policy decisions are taken in the context of the Government’s wider fiscal position. It permits sufficient time to consider the impact of any changes on government finances and individual taxpayers. The Treasury would wish him to know that that it keeps all taxes under review and welcomes representations to help inform future decisions on tax policy. I am sure that the noble Lord will want to feed in his views to Treasury, as we all do.
Amendment 11 would make it a legal requirement, as of 31 December 2022, for all fuel-poor households to be upgraded to band C by 2030 and all other households by 2035, with specified exemptions. The Government already have a statutory requirement to upgrade as many fuel-poor homes to band C as is reasonably practicable by 2030, and we have set out in the 2021 fuel poverty strategy how we intend to do so. The Warm Homes and Energy Conservation Act 2000 placed an obligation on the Secretary of State to make regulations that have as their objective the improvement of households in fuel poverty by a target date. Such regulations have been made for each of the devolved nations. The Governments of Scotland, Wales and Northern Ireland have set out their own approaches. This amendment seeks to replicate that requirement. I therefore submit that it is unnecessary.
We remain committed to our aspiration of improving as many homes as possible to EPC C by 2035, where that is cost effective, affordable and practical. However, we need to retain flexibility to choose the best approach, including how and when to introduce reforms, rather than being restricted by a statutory longstop date. This will ensure that we set policy that reflects best practice in the industry and that homeowners will not be required to make upgrades that are sometimes inappropriate for their property.
We move on to the important issues raised by the noble Baronesses, Lady Brinton and Lady Thomas, in Amendment 12, which would require a
“strategic plan for the supply of energy for those who are disabled or seriously ill”.
I know that this is an important issue and one to which the noble Baronesses are deeply committed.
As I think the noble Baroness said, electricity distribution network operators are obliged to maintain priority services registers to ensure that support is given to the most vulnerable customers during power disruption, including those customers who are disabled and rely on electricity-powered devices. Furthermore, as the noble Baroness also said, under the Civil Contingencies Act 2004, network operators are required to liaise with local authorities, strategic co-ordinating groups and third parties such as local resilience forums and partnerships to share information about vulnerable customers and work together to provide welfare support.
While the right processes and duties are in place—I think the noble Baroness recognises this—she and others have concerns about how it is working in practice. We are also keen to ensure that all relevant parties are co-ordinated as they should be. A review was carried out as a result of the electricity disruption faced during the storms of 2021-22. As a result of its key recommendations, distribution network operators have since created a guidance document and standard presentation to ensure consistency and clarity on provision of welfare and support during such incidents. This will form the basis of network operators’ winter liaison with local resilience partnerships. As I mentioned, I completely agree that a crucial issue has been raised. The Cabinet Office has responsibility for ensuring the plan is implemented. I will certainly pass on the noble Baroness’s comments and ensure with them that this is followed through.
Amendment 15A was tabled by the noble Baroness, Lady Bennett. I am sorry she was not able to speak to it. It would give the Secretary of State powers to introduce measures such as reducing unnecessary lighting, advertising, heating and air conditioning in commercial premises. It is right that commercial and other organisations should look to be energy efficient. We already have measures such as the energy savings opportunity scheme for large businesses to achieve exactly that.
While I commend the sentiment of the amendment, I do not consider that the noble Baroness’s approach is the right one. The Government believe that it is for businesses to make decisions on the basis of the information they have available to them. We want to avoid unnecessary and burdensome regulation. There would also be practical complications in delivering such regulations; for example, in defining unnecessary heating or lighting, as well as potentially significant enforcement costs and risks.
We will also publish a review into the operation of the energy bill relief scheme in three months to inform decisions on future support. The review will focus particularly on identifying the most vulnerable non-domestic customers and how the Government will continue assisting them with their energy costs. They are likely to be those who are least able to adjust by, for example, reducing their energy usage or increasing their energy efficiency.
In conclusion, I have sought to assure noble Lords who tabled amendments in this group that the Government are committed to energy efficiency and supporting vulnerable consumers. Therefore, I hope they will perhaps not press their amendments—but looking at the gathering of the clans, I suspect not.
I asked the Minister whether he would meet me, the noble Baroness, Lady Thomas, and representatives of disabled peoples’ organisations. I think I heard him say that this was more appropriately handled by the Cabinet Office. Would he help me to ensure that this same group, including myself, could meet the relevant Minister in the Cabinet Office on this issue?
I will certainly reply, although of course I cannot speak for Cabinet Office Ministers. I checked and they do have responsibility for ensuring that the Civil Contingencies Act is followed and implemented. I will certainly do my best to facilitate what the noble Baroness wants.
My Lords, I welcome the Minister’s response to my noble friend Lady Brinton on that important issue. He said that there are already lots of statistics for energy efficiency: absolutely, there are. They are all over the place, and every time you need to search for them, you have to work out what they are. One, from the energy poverty statistics, points out that, in England alone, 3.6 million households are in fuel poverty. That was in 2020, before this crisis.
Although the Bill, which we welcome in principle, is there to solve that problem—or not make it any worse—let us remember that the present average price cap is £2,500 per household, which is getting on for double what it was in 2020. So the level of fuel poverty will hugely increase.
There may be good will or a wish among the Government but, whatever the Minister says—I do not doubt his sincerity—there is never a major move forward in the form of action on energy efficiency and demand reduction that actually makes a difference. As my colleague and noble friend Lord Foster, and the noble Lord, Lord McNicol, said, we have some of the least efficient housing and commercial building stock in this country. That is why we need to reboot the whole energy efficiency and demand reduction conversation, which must lead to action. This amendment is not the end of that process; it is a modest but essential start. On that basis, I wish to test the opinion of the Committee.
Amendments 9 to 12 not moved.
13: After Clause 15, insert the following new Clause—
“Energy profits levy
(1) The Secretary of State must lay before Parliament an assessment of the additional revenue that would result from the following policy measures—(a) amending the Energy (Oil and Gas) Profits Levy so that it applies to oil and gas profits incurred since 1 October 2021,(b) removing from the Energy (Oil and Gas) Profits Levy allowances for investment in oil and gas extraction,(c) increasing the rate of the Energy (Oil and Gas) Profits Levy beyond 25%, and(d) implementing a windfall tax on the excess profits of coal- and gas-fired power stations.(2) In addition, the Secretary of State must lay before Parliament an official estimate of the oil and gas super profits over the next 2 years.(3) The Secretary of State must lay the report before Parliament no later than 31 October 2022.”Member’s explanatory statement
This new Clause would require the Secretary of State to lay a report before Parliament detailing the impact of expanding the government’s Energy (Oil and Gas) Profits Levy.
My Lords, without, I hope, taking away too much tension from the Committee, I am not going to press this amendment so I shall be relatively brief in explaining it. It has an important basis in the Government’s Energy (Oil and Gas) Profits Levy Act. It also has an element of looking at how the Bill and previous schemes discriminate against the renewables industry compared with fossil fuels.
A key element of Amendment 13 is to assess the impact of that date in the levy so that it applies to oil and gas profits incurred since 1 October 2021. The Government’s energy profits levy is effective from 26 May, meaning that profits accrued before that date are outside its scope. It was clear over a year ago that surging profits for the oil and gas companies were in stark contrast to the real struggle faced by ordinary people and small businesses faced with high and soaring energy costs. In fact, it was one year ago today that my right honourable friend Ed Davey MP called for the windfall tax on the profits of oil and gas companies, accompanied in due course by other parties and other parties represented in this House.
If the Chancellor had responded at that time and a levy had been in place from October, it would have raised billions more. If I could just remind the Committee of the profits since then, BP saw profits rise by 138% between quarter 1 of 2021 and quarter 1 of 2022—from £2.6 billion to £6.2 billion; it was similar for Shell. These combined super-profits alone amount to £7.5 billion in the first quarter of 2022. That is £7.5 billion more than they made in the same quarter in 2021. Had those windfall profits had been taxed by the same amount, it would have raised £1.8 billion.
What we are looking for in particular here has to do with the levy. Like proposed new subsection (1) in Labour’s Amendment 14, proposed new subsection (1)(b) in Amendment 13 calls from the removal of allowances in the levy for investment in oil and gas extraction. This is one of the key differences between the revenue cap on renewables and the fossil fuel industry, where there is that huge investment incentive of getting 80% back for investment in—dare I say?—fossil fuels, obviously. That is where we want there to be quality.
We on these Benches know, as do Members from other parts of the House, that renewables, rather than fossil fuels, are really the way forward. The Government have committed themselves to a large amount of investment in offshore wind. We recognise that but we need to keep at least a level playing field in taxation matters between renewables and fossil fuels. I very much believe that we need then to push investment in renewables further forward. I beg to move.
My Lords, the whole question of the energy market is complicated and beset by a series of legislative procedures which can cause confusion. That said, the new clause proposed by Amendment 14 would simply require the Secretary of State to produce a report assessing the impact of removing the investment allowance from oil and gas companies, as set out in the Energy (Oil and Gas) Profits Levy Act, and, in particular, to assess the impact on domestic and non-domestic users. Currently, oil and gas companies receive an 80% rebate on every pound invested but that is not available to renewables or other zero-carbon technology. This appears to tilt the market away from investments in cheaper domestic clean power sources towards oil, gas and fracking.
The proposed new clause would require the Government to assess the revenue and profits of electricity generators and oil and gas producers every six months, to see what the effects would be. Amendment 20 would require the Secretary of State to disaggregate the cost of production of natural gas from the cost of production of other energy sources to reduce the cost of electricity to domestic and commercial consumers. This dates back to when gas was the only game in town for energy companies; now, renewables account for 43% of the generation mix.
Gas prices have increased fourfold since the beginning of 2011, which means that consumers are paying much more for electricity than the average cost of generation across the market. Splitting the market is a likely consequence, by creating a separate pool for cheaper, intermittent, renewable generation and a second for traditional fossil fuel, which in turn could lead to consumers determining when to use cheaper electricity for things such as car charging by timing their usage accordingly. Electricity prices would be determined competitively by companies considering their own boundaries rather than working through gas. I give notice of our attention to move Amendment 14 to a vote.
I thank all noble Lords who have tabled amendments in this area, on the energy profits levy, including an amendment that seeks to reduce the costs of electricity to consumers.
I start with Amendment 13, tabled by the noble Lord, Lord Teverson, which would require the Secretary of State to publish a report on the additional revenue that could be raised from expanding the energy profits levy. I shall say something very similar to what I said to the noble Lord, Lord Foster, that all taxes are kept under review, and any changes in tax policy should be considered and announced by the Chancellor, in line with the usual Budget processes. The Treasury view, therefore, is that this amendment is not appropriate for this Bill.
The energy profits levy has been designed with a bespoke tax base, appropriate to respond to the extraordinary global context of high oil and gas prices. The levy is expected to raise substantial revenue while providing companies with a new incentive for investment. It is right that we continue to encourage investment in North Sea oil and gas to strengthen the UK’s vital offshore oil and gas sector and bolster our future energy security. The amendment would also require the Government to produce an estimate of upstream profits expected in the next two years. Such estimates will be highly sensitive to commodity price fluctuations. Given the volatility in prices since last year and that most companies’ out-turn profits are publicly available, it is not clear that producing such an estimate would be a beneficial use of public resources.
I turn to Amendment 14, tabled by the noble Lords, Lord Lennie and Lord McNicol. This amendment requires the Secretary of State to publish a report on the impact of removing the investment allowance in the energy profits levy. The Treasury has made clear its view that it is not for this House to discuss the matters raised by this amendment in relation to this Bill, on the basis that fiscal issues are a matter for the House of Commons. Tax policy changes are an area for the Treasury, which believes that the Chancellor should consider and announce any changes in line with the usual Budget process. Taxation on the profits of oil and gas producers is not in scope of this Bill. The energy profits levy, introduced under the Energy (Oil and Gas) Profits Levy Act 2022, has been in place since May. It is not standard for the Government to publish assessments of the economic impacts of measures that they are not introducing. The Government already monitor the UK oil and gas sector; data on upstream production is published regularly on GOV.UK. It is not clear how a report on the impact of a hypothetical change would be a beneficial use of public resources.
I turn to Amendment 15, also tabled by the noble Lords, Lord Lennie and Lord McNicol, which would require the Secretary of State to publish an assessment of the revenue and profits of electricity generators and oil and gas producers every six months. The profits of oil and gas producers are not in scope of these measures but are subject to the energy profits levy, which has been in place since May. The out-turn revenue and profits of most electricity generators are already in the public domain, so I do not believe this amendment is necessary. The objective of the Energy Prices Bill is to protect consumers from very high energy prices. We recognise that we must strike a balance that is fair to generators, achieves value for money for consumers and maintains investor confidence. That is why it is appropriate that the House gets the chance to debate fully the first set of regulations made under the temporary cost-plus revenue limit.
I turn to Amendment 16, proposed by the noble Lord, Lord Rooker. The Government are seeking powers to introduce a new temporary cost-plus revenue limit for low-carbon generators not already on a contract for difference, limiting the revenue they are able to achieve in the wholesale electricity market. This amendment would mean that the temporary cost-plus revenue limit would not apply to low-carbon energy generators that have fuel import costs. It would affect biomass and nuclear technologies that can provide dispatchable and baseload power. Of course, we recognise the value of the power that these technologies can provide, hence we have been clear that we are giving careful consideration to their specific arrangement as part of the detailed policy design. However, it is right that no generators should receive excess revenues just as a result of Putin’s illegal invasion of Ukraine. The precise scope and mechanics of the temporary cost-plus revenue limit will be subject to an appropriate consultation to be launched shortly.
I turn to Amendment 20, proposed by the noble Lords, Lord Lennie and Lord McNicol. The cost-plus revenue limit is a temporary measure to break the link between extraordinarily high gas prices arising from the invasion of Ukraine and the cost of production of low-carbon generators not already on a fixed-price contract. I agree that we need a long-term solution, which is why the Government have launched a review of electricity market arrangements. As I said earlier in Committee, the review is considering a broad range of reforms, including ways in which we could decouple gas and electricity prices. It is important that we do not prejudge the correct solution in our haste to tackle the present crisis. I must therefore resist this amendment. The Government have recently concluded a consultation on the review. We will pursue reforms at pace to ensure that our electricity market is fit for purpose and delivers secure, low-cost, low-carbon electricity for the long term. I hope that the noble Lord will therefore not press the amendment.
Finally, I turn to Amendment 30 tabled by the noble Lords, Lord Lennie and Lord McNicol. It is my firm belief that this amendment is not necessary. As I have mentioned before, the Bill does not legislate for oil and gas producers. We are imposing the cost-plus revenue limit on some low-carbon electricity generators. This is subject to consultation and the drafting of secondary legislation. The amendment would prejudice the outcome of that consultation and development of secondary legislation, which of course will be debated fully in this House. Therefore, I hope that the noble Lord will feel able not to press his amendment.
I thank the Minister for his reply, and beg leave to withdraw the amendment.
Amendment 13 withdrawn.
14: After Clause 15, insert the following new Clause—
“Report on additional expenditure treated as incurred for purposes of section 1 of the Energy (Oil and Gas) Profits Levy Act 2022
(1) The Secretary of State must, within six months of the day on which this Act is passed, publish and lay before Parliament a report on the effect of removing the allowance under section 2(3) of the Energy (Oil and Gas) Profits Levy Act 2022.(2) The report must set out projections of the effect of the reduction set out in subsection (1) on domestic and non-domestic energy bills.”Member’s explanatory statement
This new Clause requires the Secretary of State to produce a report assessing the impact of removing the investment allowance for oil and gas companies as set out in the Energy (Oil and Gas) Profits Levy Act, and in particular to assess the impact on domestic and non-domestic bills.
My Lords, the welcome part of the Minister’s statement was the consideration of disaggregating gas from electricity. We welcome that and look forward to seeing the outcome. But Amendment 14 simply asks for a report to be produced; it is not trying to interfere in Treasury decisions or to do anything about fiscal policy. It is simply trying to find out whether the market is distorted and, if it is, by how much. I wish to test the opinion of the House on this amendment.
Amendments 15 and 15A not moved.
Clause 16: Temporary requirement for electricity generators to make payments
Amendments 16 to 19 not moved.
Clause 16 agreed.
Clauses 17 and 18 agreed.
Amendment 20 not moved.
Clause 19: Requirement to pass on energy price support to end users
Amendment 21 not moved.
Clause 19 agreed.
Clause 20 agreed.
Clause 21: Power of the Secretary of State to modify energy licences etc
Amendments 22 to 24 not moved.
Clause 21 agreed.
Clause 22: Power of Secretary of State to give directions
25: Clause 22, page 21, line 1, after “may” insert “by regulations”
Member’s explanatory statement
This amendment and others in the name of Lord Lennie make the powers in Clause 22 subject to affirmative parliamentary procedure including a sunset Clause.
My Lords, I just want to remind the House of the warnings and the contribution from the noble Lords, Lord Rooker and Lord Cunningham, about the Government ignoring the recommendations of the DPRRC as against the normal practice of this House. I beg to test the opinion of the House.
Amendments 26 to 29 not moved.
Clause 22 agreed.
Clauses 23 to 26 agreed.
Clause 27: Consequential provision etc
Amendment 30 not moved.
Clause 27 agreed.
Clauses 28 to 30 agreed.
Schedule 1: Non-domestic relief regulations for Great Britain
Amendments 31 to 33 not moved.
Schedule 1 agreed.
Schedule 2: Non-domestic relief regulations for Northern Ireland
Amendments 34 to 36 not moved.
Schedule 2 agreed.
Schedules 3 to 5 agreed.
Schedule 6: Time limits on the exercise of certain powers under this Act
Amendments 37 to 42 not moved.
Schedule 6 agreed.
Schedule 7 agreed.
Bill reported without amendment.
Arrangement of Business
My Lords, before we move to the regret Motion in the name of the noble Baroness, Lady Sherlock, I will just outline the next steps on the Energy Prices Bill. Noble Lords now have 30 minutes to table amendments to the Bill on Report. Therefore, amendments need to be tabled by 6.50 pm. Members can do so with the Public Bill Office in the usual way. The House will resume proceedings on the Bill at a time to be displayed on the annunciator.
Universal Credit (Transitional Provisions) Amendment Regulations 2022
Motion to Regret
That this House regrets that the Universal Credit (Transitional Provisions) Amendment Regulations 2022 (SI 2022/752) do not take adequate steps to protect claimants from financial hardship removing (1) the requirement to evaluate the managed migration programme after the initial 10,000 claimants have been transferred, and (2) the obligation to involve Parliament in the decision to expand the rollout of the programme nationally.
Relevant document: 10th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument).
My Lords, my regret Motion relates to the regulations which amend the process of “managed migration”, the means by which DWP plans to move people who are currently claiming legacy benefits to universal credit. Some 2.5 million households receive legacy benefits, with most receiving ESA or tax credits. Some of those households will move on to universal credit over time through “natural migration” if, for example, their circumstances change. Some will choose to move and some will end their benefit claims altogether. The rest will be moved on to universal credit via a compulsory managed migration process. This was originally intended to be completed by April 2017. It is now due to happen, I believe, by late 2024. Will the Minister confirm if the current aim is still to complete migration of all legacy benefit claims by late 2024?
Concerns about this process have been expressed over many years, both within Parliament and outside. Originally, we all assumed the term “managed migration” meant that DWP would in fact manage the process of transferring people from the current benefit on to universal credit, but that is not what is going to happen. Rather, people will get a letter telling them to apply for universal credit and three months later their benefits will be stopped, even if they have not made an application for UC. If they do not make a successful application within that time, they will no longer be eligible for transitional protection, which is the only guarantee they have that they will not be worse off when they move to universal credit. I will return to this.
The original managed migration regulations were introduced in 2018, but the volume of concern from many quarters, including the Secondary Legislation Scrutiny Committee, led to their being withdrawn. After a couple of false starts, some new regulations were introduced in January 2019. These still, however, did not address some of the key concerns about the migration process.
DWP began testing the migration process in 2019 through a pilot, which was expected to last some 12 months before being evaluated and the process gradually scaled up. Such was the concern that the then Secretary of State undertook to come back to Parliament before the full rollout. The 2019 regulations permitted only 10,000 migration notices to universal credit to be made, after which Parliament would have to vote specifically to extend the migration to the rest of the remaining legacy benefit caseload. However, after only a handful of cases, Covid hit and the pilot was abandoned.
These new regulations remove that 10,000 limit, leaving the Government free to scale up the rollout entirely at their discretion, without any further reference to Parliament. In place of a pilot, DWP is running a “discovery phase”, but there is no transparency about how this will work or what the learning is from it. Without information about success criteria and performance, there is no way for Parliament to hold the Government to account on this hugely complex and vital project. DWP was due to publish an evaluation strategy and a full evaluation for the pilot, but I believe it is not planning to do so for the discovery phase. Is that true? If it is not doing so, will she explain why not?
I commend the Secondary Legislation Scrutiny Committee for its valiant if ultimately fruitless efforts to get DWP to provide more information and answer questions about this new approach. DWP’s case seems to be in essence that it managed lots of new applications very quickly during the pandemic, so it does not need a pilot to prepare it to scale up. However, as the SLSC points out, it offered no evidence to support that view. It said:
“Our concerns were not simply an issue about gearing up IT platforms and administrative capacity but also about the practical impacts that these changes might have on benefit claimants. DWP has been entirely silent on these issues in the EM for these Regulations”.
The Committee also noted that DWP has no firm plan for achieving transition by the end of 2024, nor does it explain why providing evidence to Parliament after 10,000 notices would obstruct that objective. It said:
“In 2019, the then Secretary of State, Amber Rudd MP, undertook to gather evidence and return with it to Parliament, to seek permission to complete the migration. That undertaking has been overturned by this instrument without explaining either why that promise will not be fulfilled or offering alternative briefing to this House. … In doing this, DWP also removes any obligation to involve Parliament, particularly the House of Lords, in the decision to expand the rollout”.
The Committee then wrote to DWP to ask for further justification for the removal of the cap, but noted that the response it received:
“Does not provide any additional explanation”.
It therefore drew these regulations to the special attention of the House and concluded:
“We therefore still take the view that the House has been given insufficient detail to make an informed decision about DWP’s proposals”.
The Social Security Advisory Committee also took these regulations on formal reference. SSAC is privy to rather more detail than most parliamentarians about DWP’s plans, but its most recent report was still casting doubt on the department’s capacity to meet its ambitions, noting the lack of evidence to back up the information about DWP performance. SSAC was also concerned about the removal of the requirement to return to Parliament at the 10,000 mark. It said in its last report:
“In the absence of such a stage-gate, we are not convinced that the governance arrangements currently in place are sufficiently robust to safeguard against, or put strong mitigations in place for, those risks which have the potential to impact adversely upon up to 1.7 million households and to affect public confidence in the programme”.
Has the Minister’s department been able to satisfy SSAC any further since then?
Coming back to Parliament is not just a matter of protocol. Amber Rudd, as Secretary of State, made that commitment because of widespread concern about the impact this process could have on a very large number of people. Will the Minister tell us the latest figure for the number of people likely to be subject to managed migration? I believe that, as of December 2021, DWP estimated that some 1.7 million claims would be migrated, but that figure may have come down a touch. However, that is a lot of people.
To summarise, I have three main concerns. First, I am concerned about the way the process will affect vulnerable claimants, given that the plan to stop legacy benefits three months after a managed migration notice has been issued is going to operate like a hard stop. DWP’s suggestion that its pandemic experience means that everything will be fine does not answer the question, because the legacy benefit caseload is not the same as the caseload that came on to universal credit during the pandemic. Almost half of those people, or thereabouts, are claiming ESA, the benefit for people who are sick or disabled. Most of those are in the support group and most have been on ESA for at least five years.
Mind points out that as of last August:
“There are more than 700,000 people with mental health problems, learning disabilities and dementia receiving income-based ESA who will be affected by managed migration”.
Managed migration is therefore going to affect some of the most vulnerable claimants, including many who will really struggle to deal with this process without support. Both SSAC and the Work and Pensions Select Committee have raised concerns about the impact of managed migration on vulnerable claimants. I understand that DWP’s own research highlights similar risks.
DWP says, “Don’t worry, we will support vulnerable claimants through the managed migration process”, but the Minister will be aware that charities in this field are not confident that DWP is always good at being able to identify and support all the vulnerable claimants. CPAG research found that staff do not systematically ask if claimants with a mental health problem require any reasonable adjustments to their service, contrary to the department’s own guidance. We know from some of the terrible cases that hit the newspapers this does not always work the way that it should.
Have the Government looked again at whether it is possible for the remaining claimants to be moved across rather than having to apply afresh? If not, what assurance can the Minister give the House that vulnerable people will not find themselves left without funds? What additional safeguards are planned to ensure that all vulnerable claimants are identified, and what support will they get? Why does there have to be a hard stop on legacy benefits, and will someone’s universal credit be backdated if they do not apply in time but there has been no gap in eligibility? We need to hear detail. Simply telling us how good the DWP is—even if it is—without offering evidence will not satisfy the House any more than it satisfied the SLSC, SSAC or the Work and Pensions Committee.
Secondly, on the financial impact of transition, the DWP estimates that about 35% of households—probably about 900,000—would be worse off under UC than under the legacy system, so it is offering transitional protection whereby households are guaranteed that they will not be worse off in cash terms at the point of transition if they are subject to managed migration. I think the DWP estimates that around 600,000 households are in that position; perhaps the Minister can confirm that. The thing is, you get the transitional protection only if you are subject to managed migration and if you apply for universal credit within three months of getting your notice that you are subject to managed migration.
Furthermore, this process was designed when inflation was low and stable. Assuming that the Government do not resile from the commitment given by the former Chancellor—shortly to be Prime Minister, if he is not already—to uprate benefits in line with inflation, benefits will rise in April by 10.1%. However, that means that if you get your managed migration notice in December, so you migrate in January, your benefit will be held at the current level, so you will actually be worse off next year than you are now. However, if you move across in April, you will have already received that 10.1% increase, so your benefit will be held at the higher level when you move across to universal credit. If someone does not apply for universal credit within three months of getting their notice, the plan is to terminate their legacy benefits. If they then apply for UC, they will lose their entitlement to transitional protection. Could their benefits not be suspended instead and, if so, would that allow them to retain access to transitional protection?
Thirdly, has any consideration been given to uprating transitional protection for claimants migrated in 2022-23? Has consideration been given, say, to delaying managed migration until inflation has stabilised? If a claimant is sent a managed migration letter within three months of the end of the fiscal year, will they be advised that their transitional protection could be 10% higher if they transfer at the end of their three-month grace period rather than at the beginning?
Finally, I have two process questions. What is the justification for ditching the pilot and therefore the requirement for Parliament to be given assurance on progress and to vote before the full rollout takes place? Since the regulations ditch the legal requirement to return here before rolling out universal credit, how will the House be informed of what is happening and how can we intervene if things appear to be going wrong?
I have been very grateful to the Minister for giving me access to her officials and for the briefing that they have given me and the conversations we have had. However, I have to say that I remain shocked, not only by the way the Government have decided to cut Parliament out of decision-making on something as big as this but by their refusal to account for actions to the committees set up by Parliament precisely to scrutinise the work of the Executive. I very much hope that the Minister can give a better account to this House tonight. I beg to move.
My Lords, I am grateful to the noble Baroness, Lady Sherlock, for bringing forward this regret Motion, which highlights important issues arising from the continued managed migration from legacy benefits to universal credit, and I pay tribute to her detailed knowledge in this area. As she said, the Government removed the need for the DWP to return to Parliament after 10,000 claimants had been migrated to universal credit from legacy benefits without a full evaluation of the programme so far.
In supporting her Motion, I will raise three important concerns: the lack of safeguards for vulnerable claimants, as we have heard; transitional protection, given the evidence of adverse impact of technical issues on claimants; and lack of scrutiny by Parliament, removing the opportunity for MPs and Peers to challenge and question the process so far or to introduce any legislative changes thought necessary.
First, the impact on vulnerable people can be severe. Fifty per cent of claimants of legacy benefits are on employment support allowance, which is a benefit for people who have an illness or disability that prevents them working. The process of claiming universal credit is difficult but for these people it presents a major challenge. The DWP plans to stop payment of legacy benefits to those who do not comply after three months; this is a significant sanction and could cause major distress, particularly to the most vulnerable claimants. The Government have removed the cap without publishing an evaluation. It seems essential that managed migration should be halted until an evaluation has been published.
Secondly, transitional protection is available only to those households that are migrated. There is evidence of the adverse impact of a number of technical issues on certain groups of claimants. For example, claimants will be better off if migrated after the annual uprating and worse off if migrated before. That is unfair and inequitable. People transferring from temporary to mainstream accommodation will have the housing cost element added to their universal credit. That will erode any transitional protection they may receive.
Carers, of all people, who give so much to our communities and who are entitled to the limited capability for work-related activity, will lose out on transitional protection, as the LCRWA full amount means that transitional protection is eroded by this element. Transitional protection comes to an end when joint claimants separate as a couple, even when a partner has died or left as the result of an abusive relationship. A full evaluation would enable these important issues to be reviewed and, where necessary, action to be taken to strengthen transitional protection. No claimant should be worse off at the point of transfer and vulnerable claimants need to be protected from the consequences of not coping with claims.
Thirdly, there is a lack of accountability to Parliament. As the Secondary Legislation Scrutiny Committee points out, insufficient detail has been provided for there to be confidence in the DWP’s capacity to carry out the full migration without detriment to claimants. The managed migration to universal credit is an enormous project. The volume of claimants alone is a cause of concern, in that failure to deliver competently could cause widespread distress and hardship to those claimants.
Of the 2.6 million people still on legacy benefits, up to half are vulnerable long-term claimants such as the sick or disabled. The DWP needs to provide stronger evidence of its competence to communicate with the most vulnerable claimants and of its capacity to transfer their claims without disruption to those payments. Parliament should not be excluded from this major project, the impact of which on the poorest and most disadvantaged people may be very serious. It is essential for MPs and Peers to exercise full scrutiny and accountability and that they are kept in full touch as the project is rolled out. We support the Motion.
My Lords, the Minister told the House on 17 October that, as of February 2022, 5.18 million working-age adults, or 12.7% of the GB working-age population, were receiving out-of-work benefits. She explained that the largest categories were universal credit “out-of-work” or those with “no work-related requirements”, but can she inform the House how many are claiming the legacy employment and support allowance? Presumably, they would all be migrated as part of “move to UC”.
She also said that the DWP is trying to reduce the flow into unemployment and inactivity through prevention and retention work by supporting disabled people and people with long-term health conditions. Will the migration of people currently claiming legacy employment and support allowance into universal credit mean these claimants receive more attention from work coaches, with the aim of their being better enabled to work? This is not about being punitive, but ensuring that no one is simply parked on benefits when their well-being and sense of purpose would be greatly boosted by working or increasing their hours. This is obviously even more important when there are so many vacancies.
My Lords, I am grateful to my noble friend for tabling this important regret Motion, which she introduced with her usual power and precision. All I can do is reinforce some of the points she and the noble Lord, Lord Storey, made emphasising how much this matters for both the well-being of claimants, particularly those in vulnerable circumstances, and transparency and accountability to Parliament.
I have yet to see a convincing justification for the removal of the stage gate, which was introduced to assuage concern raised in both Houses. Two reasons were given by the then Secretary of State in a letter to the chair of the Work and Pensions Committee in May: first, that early lessons and observations were captured during the truncated pilot in Harrogate. We have not been told what those lessons were and, curiously, in oral evidence to the committee in June, the next month, the same Secretary of State said:
“We learned a bit in Harrogate, but not a lot. The main thing we learned in Harrogate is not to do it the way it was done in Harrogate.”
That is all the more reason, one would have thought, for maintaining the piloting approach that Parliament was promised. But, no, apparently UC’s resilience during the pandemic means that a pilot is no longer needed. As my noble friend pointed out, that was a very different exercise involving a very different group of people, almost certainly far fewer in vulnerable circumstances. Instead of the pilot, as we have heard, we have what is called the discovery phase—which sounds so appealing, like a mystery cruise, but has actually reassured no one, particularly the SLSC and SSAC, never mind external stakeholders.
Although ultimately SSAC drew back from recommending that the stage gate be retained, it made clear its concerns at its abolition. Among the points it made was the need to monitor the impact of the declining ratio of staff to claimants during the discovery phase and to publish before the Summer Recess the criteria for scaling up and moving on to the next phase of implementation, yet, to my knowledge, they have still not been published. Why not? Will the Minister give an undertaking today to do so, and to ensure that the declining staff/claimant ratio is monitored?
These and other issues, as we have heard, stem from a concern about the risk to claimants of the whole exercise. When the original regulations were considered, the view was put strongly by SLSC and SSAC that the balance of risk lay too heavily on the claimant. This was why CPAG, of which I am honorary president—I am grateful for its full briefing—Z2K and disability organisations called for the automatic transfer of migrated claimants, rather than requiring them to make a new claim. I never saw a plausible reason for rejecting that idea, but clearly it will not happen. As my noble friend asked, could the department at least consider the suspension of an existing claim rather than its termination in cases where a new claim is not made in the required period—not least because of the implications for transitional protection?
It is reassuring up to a point that the Secretary of State has made it clear that for the first group of claimants in this initial phase of discovery, benefits will not be terminated after the proposed three-month period, but instead there will an automatic extension of at least a month. How long will that first phase last and how big is this first group envisaged to be? Why does the one migration notice that I have seen say that a claimant must have good reason for the three months to be extended? This is the longer-term position, but it seems to contradict the Secretary of State’s assurance.
In the longer term, I am worried by the use of “good reason” as a test for exercising discretion to extend the deadline in the absence of any definition of what constitutes a good reason. A previous Work and Pensions Select Committee report on sanctions pointed to how the lack of such a definition leads to inconsistent treatment, and called for
“carefully drafted regulations on what constitutes ‘good reason’”.
At the minimum, there should be a non-exhaustive list. This also has implications for the right to transitional protection, to which I shall return.
As we have heard, the concerns of stakeholders who work with claimants stem in large part from the vulnerable circumstances many of them are in. As we have also heard, nearly half of those to be migrated are currently in receipt of ESA, many of whom are experiencing mental health problems that could well affect their ability to engage with the whole process. The DWP is well aware of the risk to claimants in vulnerable circumstances and says it will identify such claimants and support them through managed migration, but CPAG warns that experience of failure to identify and support claimants with mental health problems does not instil confidence. In June, the then Secretary of State assured the Work and Pensions Committee that benefit payments would not be stopped for vulnerable claimants during the discovery phase, but refused to explain the mechanism to ensure that. As CPAG argues, the safety and well-being of claimants in vulnerable circumstances should not have to depend on vague assurances: they need clear rights set out in regulations. Can the Minister release clarify exactly what the safeguards will be?
It is not clear what will happen after the discovery phase, when, as Z2K points out, hundreds of thousands will be moving each month, making the intensive support promised initially impossible—a concern also raised by SSAC. SSAC warns that the steep scaling phase presents
“the most significant risk … by far. Any oversights or missteps could be to the detriment of very large numbers of claimants”.
There seems to be an assumption that claimants in vulnerable circumstances can be supported by organisations with which they are in touch, but not all will necessarily have that support to hand, and we should not underestimate the pressure under which such organisations are currently working. I understand that the migration notices do not signpost claimants to local advice agencies that might be able to help. Why not?
I know that there is the Help to Claim service provided by Citizens Advice, although as far as I can see, you have to go to the government website to find about it. Moreover, that does not help once a claim is made, but many of those migrated could face problems. For instance, those migrated from ESA must get to grips with monthly payments, having been paid fortnightly in the past—an issue raised by the SLSC. There are all the difficulties associated with Digital by Default for those who struggle for various reasons, including cost, with the digital world. I co-chaired a meeting of the APPG on Poverty last week where we heard from members of the APLE group with lived experience of poverty of the difficulties created by a digital-by-default approach.
According to Z2K, a piece of qualitative research into the experiences of those in vulnerable circumstances who had moved to UC through natural migration has not been published, despite repeated requests, although apparently the Information Commissioner recently decreed that it should be. Can the Minister therefore give us some idea what it found? As it is, this is an example of the lack of transparency associated with the migration exercise, criticised by SSAC not least because of its implications for public confidence.
I have just received some Written Answers to Questions I put down, trying to get more information about what was happening, only to be told that
“learnings and observations from the first phase of discovery process
will be made available “in due course”. What is “in due course”? When will that be? It is one of those Answers we get that means absolutely nothing.
Linked to transparency is the all-important question of parliamentary accountability and scrutiny, which led to the original adoption of the stage gate. In its absence, as my noble friend has noted, SSAC questions the robustness of the Government’s governance arrangements, particularly at the point at which the discovery phase turns into steep scaling up—when, as SSAC points out, accountability to Parliament will be of the greatest importance. It suggests that
“it seems an appropriate and respectful step to report to Parliament”
in the absence of the legislative stage gate.
This is one of a number of recommendations made by SSAC, which has gone to great lengths to propose ways in which the risks to claimants could be reduced and accountability and transparency increased in the absence of the stage gate. The Secretary of State’s response was simply to formally note all the recommendations, leaving no one any wiser as to which, if any, of the recommendations the DWP might accept and act on. This really is not good enough. If I were a member of SSAC, I would be pretty cross at such a dismissive response. Can the Minister tell us exactly what the response is to each of these recommendations, either now or in writing?
Finally, I will say a few words about transitional protection. As we have heard, the DWP estimates that about 600,000 of those who move to UC under managed migration will be worse off and therefore entitled to transitional protection. This commitment is, of course, welcome, but it does not cover those who have failed to make the transfer within the required timescale. When we asked about this some time ago, pre-pandemic, the response was that we could not leave the process entirely open-ended, so it seems that this is a stick with which to beat people into claiming according to the Government’s timetable. That comes across as punitive and unfair, given that the Government have not assuaged worries about the risks to people in vulnerable circumstances of the whole exercise. Am I right in assuming that this rule will at least not apply during the initial discovery phase, when there will be an automatic extension of the deadline? As I said earlier, it is unclear how long this phase will last.
In addition, CPAG provides a number of examples, with case studies, of how transitional protection can quickly be eroded. As we heard from the noble Lord, Lord Storey, these include: when someone moves from temporary or specified to mainstream accommodation, for example a woman leaving a refuge; when joint claimants cease to be a couple, including because of death; and where a carer’s health deteriorates and the carer element of UC is replaced by the limited capability for work-related activity element. Moreover, ESA claimants who do permitted work will be worse off at the point of transfer, because UC does not make allowance for permitted work. Their case studies illustrate how we might be talking about a loss of hundreds of pounds a month.
As my noble friend has warned, transitional protection is quickly eroded at a time of high inflation. Assuming that benefits continue to be uprated with the previous September’s inflation rate—the Minister knows how worried I am about rumours that they will not be next year—even if they are uprated only in line with earnings, that will affect transitional protection. It is clearly in the interests of anyone due transitional protection to migrate after the day that the benefits are uprated, rather than in the months immediately before that date, as it could make a big difference to how much benefit they receive over the coming year. Will this be made clear to those due to migrate during this period? Indeed, there may be a case for pausing the exercise prior to any April uprating, to ensure that no one loses out unfairly.
Given the concerns expressed by SSAC, the SLSC and stakeholders about the risks to claimants in vulnerable circumstances and the erosion of accountability to Parliament, I hope that, even at this late date, the DWP will think again and withdraw what, as my noble friend said, are really quite shocking regulations.
I thank the noble Baroness, Lady Sherlock, for raising this Motion, and noble Lords for their contributions. I would also like to thank representatives of the Secondary Legislation Scrutiny Committee and members of the Social Security Advisory Committee for their detailed scrutiny of these regulations and for reports relating to their assessment of the impact of these regulations. We have continued ongoing dialogue with SSAC. From the meeting we had with the noble Baroness, Lady Sherlock, we were able to confirm to her that we were in a much better place with SSAC and the committee.
I will endeavour to answer all the questions, because I want to, but I am sure that there will be some things that I have to write about. I ask noble Lords to allow me to do that. Because of the technical nature and depth of the questioning, it is very important that I get those things right. I should also say that we had a pre-brief meeting with the noble Baroness, Lady Sherlock, and I am happy to put on record that after this debate, however it transpires, we are prepared to have further meetings so that people can raise points which we can learn from as we go on. I hope that demonstrates that we wish to get this right and be transparent.
The Universal Credit (Transitional Provision) Amendment Regulations 2022, laid on 4 July, came into force on 25 July 2022. These regulations build on insights from the previous Harrogate pilot and from the pandemic and improve the existing legislative framework so that it better supports the DWP’s revised strategy, published in April 2022, Completing the Move to Universal Credit. I can confirm that the strategy is to migrate all legacy benefit claimants into a single, streamlined and simplified benefit system by the end of 2024.
The Motion tabled today by the noble Baroness is driven not by criticisms of the technical provisions and amendments within the regulations; these make needed improvements to legislation that sets out how claimants should be migrated to UC and protections they receive in doing so. They will also remove unnecessary complexities that benefit neither the claimant nor the taxpayer or provisions that do not reflect our policy intent. The concerns are instead focused on the removal of a statutory limit on the number of claimants, in the belief that this risks a lack of oversight of DWP’s progress and transparency about the nature of our plans for migration. These reflect concerns raised by the Social Security Advisory Committee and the Secondary Legislative Scrutiny Committee, and whilst I am sympathetic to their origins, I can assure the House that they are misfounded.
First, moving to universal credit is a good thing for claimants. Overall, we estimate that most people are better off under UC. We estimate that 55% of all legacy claimants will have a higher entitlement under UC, relative to legacy benefits; around 10% of legacy claimants will see no changes; and 35% will have a lower entitlement. That 35% who are not better off will be considered for an assessment for transitional protection to support that move over. Once they are moved over, they take advantage from a more dynamic system of support that focuses on work, incentives and earnings.
However, despite these advantages, the startling fact is that those who could benefit most—those still to migrate over—either are not aware or do not share this opinion of universal credit. Internal work looking at claimants’ attitudes suggests that there is a hesitancy towards moving to universal credit as there is concern that they will not be better off.
Media reports have influenced this belief, and it is important that we change this misconception; hence we all share the priority of ensuring an effective transition to UC for those who need most help to make the journey. Sometimes this gets lost, even in our more nuanced and informed debates in this House. It is legitimate to ask questions but let us make sure that we are balanced and recognise our role in helping claimants understand the true picture: that the majority will gain and that those who do not will be protected. We have always been clear that, whatever approach we choose to take, claimants’ interests will come first; nobody will be left behind.
Since Covid, we have adapted our plans. The approach we proposed to take before the pandemic was developed particularly because there was concern that the DWP could not handle volumes. This concern proved unfounded. In three months, UC took more claims than were needed in the whole of the managed migration. This is why the legislation has been changed. The removal of the 10,000 limit was brought forward, as that ceiling on the number of claimants no longer reflected how we wished to test and learn how to transition claimants. We have moved on from 2019 and so have the regulations. It does not change our intention to make sure we have processes in place that allow claimants to move safely from legacy benefits to universal credit.
The Harrogate pilot began in October 2019 but was suspended in 2020. Learning from this informed both process design and future communications to claimants for the recent resumption. This same approach of testing and learning is replicated at the heart of our new approach to managing migration claimants.
The replacement for the Harrogate pilot is the small-scale discovery activity of the discovery phase. This is run across multiple sites, with decisions on testing and scaling-up not pitted to a pre-set timetable. It starts with small volumes across selected areas and uses quantitative and qualitative evidence to inform the programme design and processes of universal credit. Central to its implementation of ongoing learning is gathering evidence that seeks to understand the claimant’s experience. This informs how we can best support vulnerable claimants, including how to communicate with them to make sure they know what is required and how to make a claim for universal credit, and how to proactively work with claimants who do not make a claim within their three-month period, and what action they then need to take.
Finally, we have been transparent with Parliament. We set out our plans. In April 2022 we published our approach. We have been working with stakeholders, developing our plans and regularly updating them and seeking their help in the task. Our publication, Completing the Move to Universal Credit, sets out the three strands for migrating claimants, but only one—that of managed migration—provides financial security at the point of moving across.
Keeping a statutory limit on migration would mean delays in sending migration notices to claimants. More claimants, therefore, would risk experiencing a significant change in circumstances before being sent their migration notice and moving to UC naturally. Only those who receive a migration notice will be assessed for, and potentially benefit from, transitional protection at the point they transition to UC.
In addition, delays in scaling-up the process of managed migration would mean that greater volumes of claimants would be migrated to UC later, so a larger volume of legacy claimants would miss out on the benefits of claiming UC, including, where appropriate, tailored work support that can lead to higher earnings, as well as higher average benefit entitlement. The analysis within our own Completing the Move to Universal Credit paper estimates that those who are better off will be better off, on average, to the tune of £220 per month.
Finally, as with all former early elements of UC implementation, we remain committed to engagement with stakeholders and to meeting our obligations to Parliament. Stakeholder engagement with a diverse range of organisations, through regular meetings, ensures the claimants’ perspective and the needs of the vulnerable are safeguarded as part of our ongoing testing of the design of UC. In addition, we are open to wider sharing and scrutiny, not just through the wider parliamentary channels and ongoing discussions with the Work and Pensions Committee but through sharing progress publicly. This was demonstrated by our recent commitment to publish the early findings of the UC discovery journey since May 2022.
Noble Lords have raised many questions, and I will give the answers I have here. The noble Baroness, Lady Sherlock, asked about the timescale for the DWP’s plans for the migration of all legacy claimants. As I said, it is our ambition to complete them by 2024. The noble Baroness asked how we will rapidly increase the volumes migrating through managed migration. The increase in the volume of claimants migrated will start once the department is confident that it is ready to do so; this will be no earlier than 2023.
The noble Baroness, Lady Sherlock, asked how, without a valuation, a claimant will know they are ready to move to the next stage of migration and how we will measure success. We continuously monitor test-and-learn activities within the discovery process and through gathering qualitative and quantitative evidence, with particular focus on those claimants who may have enhanced support needs. Learning is fed back into the design and implementation to ensure safe migration to UC.
The noble Baroness asked why we were removing the 10,000 limit. This limit creates a regulatory constraint on the number of claimants that can be migrated before legislation has to be amended. If we can roll out migration more widely, having a fixed point at which it is assessed no longer reflects how we wish to test and learn or work with others to evaluate safely moving claimants.
The noble Baroness, Lady Sherlock, also asked why the DWP did not automatically transfer all claims across to UC. Several systems hold personal data. The department may not have sufficient information to determine the full UC entitlement because some of this information may not be available. It is therefore crucial that new claims for UC are made to ensure that data is as accurate and as up to date as possible.
I was also asked how many will receive transitional protection. The DWP estimates that approximately 600,000 will be managed, migrated and eligible for transitional protection. All eligible claimants who move through the managed migration will be assessed and, where appropriate, awarded transitional protection. The 600,000 figure is based on an estimate of those who were still on legacy benefits in April 2022.
The noble Baroness, Lady Sherlock, and others asked what has been done so far to ensure that vulnerable claimants are supported in the discovery phase. The DWP is working closely with claimants and support organisations to learn in a safe way what support is required and to adapt the service to meet those in need.
The noble Baroness, Lady Sherlock, asked how uprating will impact the level of transitional protection that claimants receive. We cannot comment on benefit uprating. We can say that transitional protection is eroded with an increase to, or addition of, another UC element, including uprating benefits.
The noble Baroness also asked whether any benefit claimants have had their claims terminated. Since the resumption of the move to UC, the discovery phase has made every effort to engage with claimants before their deadline day to try to understand why no claim has been made and to provide support in the making of their claim. Where the claimant is unable to make their claim within the three-month window and requires an extension, they are told to contact the DWP. In our briefing, there was talk of home visits and of going the extra mile to make sure that we engage with people who have not responded.
The noble Baroness, Lady Sherlock, asked why we could not extend the period in which a claimant could receive transitional protection beyond one month after the deadline of three months. Where a claimant makes a claim within one month of their deadline day passing, they will still be eligible for transitional protection.
The noble Baroness asked what safeguards will be in place so that no claimant will lose entitlement by failing to make a claim to UC by the deadline date. To prevent vulnerable claimants being disadvantaged, discovery has policy safeguards on which to draw and has put new ones in place.
The noble Baroness, Lady Sherlock, asked how and why a claimant might have their deadline extended. A claimant’s deadline can be extended if it is believed that this would be in the interest of the claimant or the department. She asked whether we will publish a formal evaluation and report on operational readiness. We will continue to update Parliament at appropriate milestones, as we have done throughout the implementation of UC, and will continue to communicate as much as possible.
The noble Lord, Lord Storey, asked how DWP will engage Parliament in the next phase. As I have said, we are committed to openness and transparency in how we are implementing the next phase of migrating claimants to universal credit. We will continue to engage with Parliament, as during previous stages of universal credit, through standard parliamentary channels, sharing progress as and when it is possible to do so. He asked what safeguards will be in place so that no claimant loses their entitlement by failing to make a claim. To be clear, our goal has been and remains to support all claimants to claim UC and move them across safely. Terminating benefits is a last resort. To prevent vulnerable claimants being disadvantaged, the discovery phase has policy safeguards to draw on and has put new ones in place. They include extending the deadline date when a claim must be made, cancelling migration notices in certain circumstances and offering claimants support to make a claim for UC, such as through the independent help-to-claim services provided by the citizens advice service.
The noble Lord, Lord Storey, referred to transitional protection offering only temporary help and asked why we do not make it a permanent uplift. Transitional protection is not an indefinite increase in a claimant’s UC award. Transitional protection provides time for the claimant to adapt to their new level of entitlement. This is not new policy. The erosion over time of transitional elements of an initial award is an established principle in social security.
The noble Baroness, Lady Sherlock, and the noble Lord, Lord Storey, asked how we will engage with Parliament in the next phase. I believe I have already answered that.
My noble friend Lord Farmer asked how many people are receiving out-of-work benefits or claiming the legacy ESA. There are around 1.2 million households on income-related ESA. Not all will be managed migrated and some will leave ESA prior to being moved. The second part of my noble friend’s question was about whether the migration of people currently claiming legacy employment support allowance into universal credit will mean that these claimants receive more attention from work coaches with the aim of being better enabled to work. A claimant’s requirement to engage with work coaches will depend on their circumstances. However, for the first time, we will be engaging with partners of former ESA claimants to support them in the labour market. The department recognises the importance of establishing the best possible support arrangements for those moving from legacy benefits to universal credit. There are around 400,000 new-style ESA claimants not subject to moving to UC.
The noble Lord, Lord Storey, and the noble Baroness, Lady Lister, asked what the process of managed migration will look like post the pilot. Our learning from the discovery phase will determine how we start to select more claimants in a controlled way to move safely over to UC.
The noble Lord, Lord Storey, asked what has been done so far to ensure that vulnerable claimants are supported in the discovery phase. The DWP is working closely with claimants and support organisations to learn in a safe way what support is required and to adapt the service to meet those needs.
The noble Baroness, Lady Lister, asked how, without an evaluation, you will know you are ready to move to the next stage of migration. We continually monitor test-and-learn activities in the discovery phase. As I have said, by gathering qualitative and quantitative evidence based on the needs of claimants, who may have enhanced support needs, learning is fed back into the design. The noble Baroness asked how we will rapidly increase volume. The increase in the volume of claims migrated will start once the department is confident that it is ready to do so, and no earlier than 2023. I have already said that, but I want to emphasise it.
The noble Baroness, Lady Lister, asked how we can support larger volumes. The department will consider several factors, including operational readiness, the efficiency of the service, key functionality being in place and ensuring that the department has processes in place to support vulnerable claimants before moving to higher volumes. The noble Baroness asked about signposting in the migration letters. When the claimant is unable to make their claim within the three-month window and requires an extension, they are told to contact DWP. Where they do not, we will make every effort to make contact with them. As I said, that might include home visits and interaction with key workers. The noble Baroness asked whether we will publish a formal evaluation and report on readiness. As I said, we will continue to update Parliament at appropriate milestones.
The noble Baroness and others asked whether we will start to scale. The department will increase the numbers required to move once we are confident in the process and that support is in place to move greater volumes.
The noble Baroness, Lady Lister, asked what governance arrangements are in place for the discovery phase. The department has robust governance processes in place, with accountability to the independently chaired UC programme board and our steering group chaired by the Secretary of State.
The noble Baroness, Lady Lister, and the noble Lord, Lord Storey, asked in what circumstances a claimant’s transitional protection will be eroded or terminated. Transitional protection will be reduced if another UC element, other than the childcare cost element, is awarded or increased. Transitional protection terminates if a claimant’s circumstances no longer resemble those when they claimed UC.
On the issue of uprating, I am afraid I cannot give any information. I am sorry, but I have to wait until the Secretary of State carries out—
Just to clarify, nobody who has raised the question of uprating has asked the Minister to comment on the amount by which benefits will be or should be uprated. On the assumption that every year there is some uprating, the value of transitional protection will be different before the next financial year or after, so if somebody moves before, they will be worse off than if they move after. The questions are, first, whatever those rates are, will the Government do anything about that? Secondly, will the department warn a claimant who could choose to migrate either side of the line that they will be worse off if they go this side of the line?
The answer to that question is that I will need to write to the noble Baroness. She raised it in our meeting and I have asked my officials to prepare me a written answer so that I get it correct. I will write to the noble Baroness and place a copy in the Library.
All noble Lords who have taken part today have asked a number of justifiable and understandable questions. I will make sure with my officials that they are all answered in a subsequent letter. I thank all noble Lords who spoke whose questions enable us to clarify in more detail. Be reassured that the Government are fully aware of the concerns over the scrutiny of managed migration. We believe that managed migration to UC is the right step for claimants and that this is the right time. We believe we know how to protect claimants and are learning from the discovery phase. Given my response, I respectfully ask the noble Baroness to withdraw her Motion to Regret.
My Lords, I thank all noble Lord who have spoken tonight and thank the noble Lord, Lord Storey, for making some important points about the position of vulnerable claimants and asking some good questions. I thank my noble friend Lady Lister for a powerful speech illustrating the range of issues that will have to be considered very carefully over the weeks and months ahead. I am grateful to the noble Lord, Lord Farmer, for raising the questions he did and to the Minister for answering them.
Given the lateness of the hour and the business ahead of the House, I will not respond at great length, but I want to say a couple of things. First, the Minister said that my Motion was “mis-founded” because universal credit is good for claimants, so they should be encouraged to move across, and they do not want to do anything that gets in the way of that. She is right that many people will be better off on universal credit, but others will not. For those who will be worse off, it is small comfort that someone else will be better off. It is incredibly important that those who will be worse off, and especially the significant numbers who are vulnerable, are given appropriate support, that their needs are properly attended to and they are not simply left behind, as she said, when others are moved across.
Secondly, she is right that a number of people are worried about universal credit, but not just on the grounds of media comment. The experience of some universal credit claimants has not been good: waiting a long time for benefits, complicated processes, things that they did not understand. I know, just from the charities and churches that I have spoken to, that the experience has not always been straightforward. There are good reasons for people to be concerned.
There are a number of questions here. The Minister is right: she said the Government wanted to change the regulations because the new approach better fits with their strategy and the old approach placed some regulatory constraint. That was the point: the point was to place some constraint. That is why the Secretary of State did it; that is what it was for; and that is what the Government have simply abandoned.
The Minister has said several times that she will update Parliament at the appropriate stages. The fact is, once these regulations go through, there is nothing to require her to come to the Floor of this House and say anything. The only reason she is here tonight is because I tabled a Motion against these regulations, so once they go through, the department will have complete freedom to whatever it wishes. I am really grateful for the time and the detailed responses she has given, but will she please commit to going through Hansard with some care? I think she will find when she does that there were questions that were not answered, or not answered fully. Secondly, will she please look for opportunities to engage this House and not simply the Work and Pensions Select Committee, so that we, as well as the other place, can properly have our say?
I think I have emphasised the value of regular meetings, updating people and giving them the opportunity to advise us of things they are worried about and things that have gone wrong. I have given my word here. I know our Secretary of State—
The noble Baroness, Lady Lister, saves the best line till last. I have no doubt that we want to take people with us; we want to know what does not work, and we want to amend it. I give noble Lords my word and the Government’s word that we will have that interface.
The point the noble Baroness raises about the people who will be better off and those who will not—they will not be any worse off with transitional protection—is a very fair one. These are the sort of things that people talk to each other about and get very worried about, so I will take that back and try to give a more definitive answer than I have given, if that is acceptable to the noble Baroness.
The Minister keeps talking as if transitional protection is the answer. As noble Lords have pointed out, many people will not get it or will not get it for very long, and there is the whole question of the inflation uprating. It is worrying for people: if they know what is going to happen, they know that transitional protection may not last long at all. So, please do not talk as if that is the answer.
I have no intention of talking as if that is the answer and nothing will be wrong after that. I understand that it has a fixed life. Our job is to work with these people, and I understand the vulnerabilities. I understand the barriers people face when work coaches are trying to find them extra hours they can do, taking into account the things that are stopping them now. The relationship with their work coach will be invaluable. There is nothing in a work coach’s job description that says they must say, “You’ve just got to do this”. I hope that the relationship with the work coach will make a huge difference, and that they will go to their superiors when there are real issues that cannot be overcome through those channels.
My Lords, I thank the Minister for her answers. There are still some outstanding questions, and I remain very worried about the impact on people who are utterly dependent on the benefits they get to keep body and soul together. I very much hope that we will have opportunities to discuss this. However, I have reached the limit of what I can do about these regulations, and voting on this Motion would not change them. In the light of that, I beg leave to withdraw the Motion.
Independent Inquiry into Child Sexual Abuse: Final Report
My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
“With permission, Madam Deputy Speaker, I would like to make a Statement about the independent inquiry into child sexual abuse. Last Thursday, the report of the Independent Inquiry into Child Sexual Abuse was published. It concludes seven years of investigation into institutional failure across England and Wales to protect and safeguard children from child sexual abuse.
I want to thank the chair of the inquiry, Professor Alexis Jay, and her whole team for their fearless dedication and commitment in uncovering generations of horrendous societal, professional and institutional failings. I have written to Professor Jay and want to meet with her in the coming weeks to discuss her findings.
Above all, I want to extend my profound gratitude to the thousands of victims and survivors who have come forward to share their testimonies and experiences with the inquiry. That took immense courage. We will honour that courage by keeping their voices front and centre in everything we do and in overseeing a radical improvement in how this crime is dealt with and prevented. The whole House will be deeply moved by the reasons that victims and survivors gave for wanting to share their stories. They wanted their experiences to be acknowledged, to be listened to and to be taken seriously; they wanted to protect other children from suffering as they have suffered. Yet they also wanted not to be defined by this experience and to find, as one survivor put it, “life after abuse”. Madam Deputy Speaker, they are heroic.
Nothing—nothing—is more wicked than hurting a child, and there is no worse dereliction of duty than failing to protect a child. The report reveals horrific abuse of children. It makes for devastating and distressing reading. It finds that organisations have put their reputations ahead of protecting vulnerable children—either turning a blind eye or actively covering up abuse. That is inexcusable.
I am a father of three children and this report has made for very difficult reading. I cannot imagine the pain that victims have been through. Madam Deputy Speaker, I say this on behalf of the Government and all Governments who came before: to all the victims who have suffered this horrendous abuse, I am truly sorry.
The inquiry heard from more than 7,300 victims and survivors. It investigated abuse over not only the last seven years but several decades. The report makes a wide range of recommendations, including greater accountability, increased reporting, better redress for victims, an increased focus on bringing the perpetrators of these abhorrent acts to justice, and a stronger voice from government on this issue. The Government will take all these recommendations, and the insights provided by brave survivors, seriously.
Getting this right will mean everyone redoubling their efforts and working more closely together—all of government, the police, the health and care system, local authorities, schools, and all other interested parties. I will convene meetings with Ministers across Whitehall to drive that change. Our new child protection ministerial group, set up following the care review, will champion children’s safety at every level and provide the leadership to oversee vital reforms across children’s social care. Several government departments have been core participants in the inquiry, and we have been working to respond in real time to recommendations already made during the course of the inquiry.
The actions that we have taken include the Government’s tackling child sexual abuse strategy, published in January last year; driving initiatives to increase reporting of this too often hidden crime, including awareness-raising campaigns, and to improve the confidence and capabilities of frontline professionals to identify and respond to child sexual abuse; ensuring that education and safeguarding professionals are better equipped and supported in identifying harmful sexual behaviours and protecting children from peer-on-peer abuse and harm; targeting offenders by investing in the National Crime Agency, GCHQ and new technology, and by giving the police stronger powers; and providing better support to victims—committing to a new Victims Bill and increased funding for specialised support services.
The conclusion of the Independent Inquiry into Child Sexual Abuse marks the end of a vital period of reflection and learning. It must also mark the start of the next chapter in how society confronts and defeats this evil. Nothing must be allowed to get in the way, be it inertia, misplaced cultural sensitivities, indifference, self-interest or cowardice from those whose job it is to protect children.
In fact, it is the job of every adult to do all they can to protect children. Anything less is a profound moral failing, let alone a professional or institutional failing. Walking by on the other side is never acceptable. Would-be abusers need to know that they will be caught and punished. Victims need to know that it is never their fault and that they will be heard and protected.
I have laid a copy of the inquiry’s report in Parliament. It is only right that the Government now take time to carefully consider its findings and recommendations in full. We will respond comprehensively and in line with the inquiry’s deadline, but let me make a promise now: I will use all available levers to protect our children and right the wrongs exposed by the inquiry’s findings. I will do all in my power to improve how law enforcement and the criminal justice system respond to child sexual abuse. I will work with my ministerial colleagues and across party lines to hold organisations to account, bring perpetrators to justice, and support victims and survivors with compassion and total care.
Where we can act more quickly, we will. That is why we have already announced that, through the support for victims and survivors of child sexual abuse fund, we are allocating up to £4.5 million over three years to seven organisations to support victims and survivors. The fund is only the start in addressing the inquiry’s recommendations but it is another step towards ensuring that we are providing vital support for children and young people who have experienced sexual abuse, adult survivors, and parents and carers of victims. It is also just one part of the more than £60 million a year that the Home Office is investing in tackling this crime.
Child sexual abuse is a terrible but preventable crime, and we must prevent it. We will do so with the recommendations of this inquiry in front of us and the words of heroic survivors ringing in our ears. I commend this Statement to the House.”
I thank the Minister for repeating the Statement. I join him in paying tribute to the 7,300 victims and survivors who gave testimony to the inquiry, and who have shown great bravery and strength in telling their stories; but there will be many thousands of other victims who did not feel able to come forward. I hope they too will feel that this report is a substantial and serious attempt to understand the extent of institutional failure to protect children over many decades.
This report, seven years in the making, is of immense importance. It offers practical solutions and a solid, rational oversight of a crime that is alternately ignored or sucked into conspiracy theories, which we see through organisations such as QAnon. The report shows the true banality of evil, and it is all the more powerful for that; I pay tribute to Professor Jay for producing it.
This is a report about one of the worst imaginable crimes—about the sexual abuse and exploitation of children and the institutional cover-ups when the abuse came to light. These institutions were there to protect children but instead they acted to protect their own institutional reputations.
The report raises concerns about current child protection arrangements. First, it refers to the explosion in online-facilitated child sexual abuse, including the grooming and rape of children and babies. The Home Secretary did not mention this in his Statement, but can the Minister confirm that the online harms Bill will complete its passage through the Commons next week and be accelerated straight to the House of Lords? Can the Minister also confirm that the National Crime Agency will not have to make the 20% staff cuts which it has been asked to draw up in the recent past?
Secondly, the report says that
“significant reductions in funding of public services”
after 2010 is one of the key factors that has had
“a deleterious impact on responses to child sexual abuse.”
Does the Minister accept the damage done by the scale of the cuts in child protection? What can he say about protecting our existing arrangements in the forthcoming spending review?
Thirdly, the report is clear that organisations still do not take child protection seriously enough. What is the Home Office’s position on a mandatory duty to report child sexual abuse? The Labour Party has been calling for it since 2014, and it is worth noting that former Prime Minister Theresa May, who initiated this report, supported this key recommendation of the report.
Fourthly, the report is clear about the failings in the criminal justice system. The charge rate on child sexual abuse has dropped from 32% in 2015 to 12% last year. There are many other examples of failures in the criminal justice system too, but surely child sexual abuse should be the top priority.
Fifthly, the Home Office has responsibility for unaccompanied asylum-seeking children, yet the independent inspectorate found just last week that they were being placed into unsuitable hotels where the staff did not even have DBS checks, and hundreds of children have gone missing. What action have the Government taken since the Minister saw those reports over the weekend?
This report is clear about the systemic failures, past and present. We in the Labour Party have been part of the problem. My right honourable friend Yvette Cooper apologised on behalf of the Labour Party for its part in that failure. Too often, there has been a deference to power, which has overridden a duty of care.
I spoke about the banality of evil. Noble Lords will know that I sit as a magistrate in London. Magistrates would not normally deal with these types of offences but several times in my experience as a magistrate in family courts, youth courts and adult courts, I have had witnesses and defendants make very serious child sex-related accusations when we were dealing with far lesser charges in the court process. We as a court system need to be alert to people reaching out for help when they are in the court system. We owe it to the thousands of survivors who have spoken out.
I have two final points to make. The first and very important point is that this is not a historical problem; it is happening today. My question to the Minister is: what is being done to ensure that children know where and how to report abuse? Secondly, I repeat a point made by many Members in the other place: can the Minister give an undertaking that there will be regular reports to Parliament on how the Government are implementing the recommendations in the report?
My Lords, I thank the Minister for repeating the Statement. This seven-year Independent Inquiry into Child Sexual Abuse sheds light on extraordinary and appalling institutional failings. I want to thank the right honourable Theresa May MP for establishing this inquiry in the first place, as well as Professor Alexis Jay, the chair, and her panel, and, most of all, the survivors and victims who selflessly came forward because they wanted to prevent what had happened to them happening to anyone else.
This is a catalogue of failure to protect children, failure to listen to children and failure to believe children. There must be a change of culture, both in society and in those institutions which put their reputations before protecting children. We on these Benches are also truly sorry. All Governments have failed these survivors and victims, along with the police, health and social services, and local authorities. We have all let down the victims and survivors of child sexual abuse.
The physical and emotional damage these children have suffered has led to a lifetime of suffering. The Home Secretary said that the perpetrators will be “caught and punished” and that “all available levers” in his power, including the police and criminal justice system will be used to bring offenders to justice. Can I ask the Minister how that will be brought about when there is a lack of police resources, the police are already overstretched and the Crown Prosecution Service does not have enough lawyers? The proportion of criminal cases overall resulting in prosecution is falling and there are serious backlogs in the courts. Will the Government increase the resources to the criminal justice system, for example, those available to the police and Crown Prosecution Service? Will the Government ask those institutions to prioritise child sexual abuse cases?
It is right that we should say sorry to the victims and survivors, but we should also not forget those falsely accused whose lives and reputations were seriously damaged as the police lurched from not doing enough to the opposite extreme. Those making false allegations damaged genuine victims as well as those they wrongly accused. Every victim must be protected, cared for and believed while the police engage in an objective search for the truth.
I shall mention three specific issues. First, will the Government introduce an effective statutory duty to report child sexual abuse?
Secondly, when it comes to unaccompanied asylum-seeking children, as has already been said, they are being placed in inappropriate accommodation in hotels where those looking after them have not been DBS checked. More than 100 have gone missing. In going missing, they are vulnerable to sexual abuse. In the Home Secretary’s Statement, he said that
“there is no worse dereliction of duty than failing to protect a child”,
but the Home Office has not been protecting these children by allowing them to go missing. What are the Government doing to ensure that this is stopped?
Thirdly, on prosecutions, the Home Secretary talked about the number of convictions for possession of indecent images of children increasing by 39%. But what about the number of children being rescued from abuse and the children in those indecent images? What about the prosecutions of those producing the images, not just those in possession of them?
There were 2 million pages of evidence and 107 recommendations. It will take time to fully process and action all those recommendations. That must not be lost in the current political turmoil. Child sexual exploitation is endemic and increasing. As the report says:
“this is not just a national crisis, but a global one.”
Urgent action is needed to reverse the increasing numbers of children being abused. Can the Minister confirm that the Government will regularly update the House and not wait until all the recommendations have been addressed?
My Lords, I thank both noble Lords for a large number of questions. I will do my best to get to all of them in the time available.
I agree with the noble Lord, Lord Ponsonby, that of course there are many thousands of other victims. We should be thinking about those who were unable, for whatever reason, to come forward, as well. As the noble Lord, Lord Paddick, said, there were an enormous number of submissions. Once again, I commend those who did and their bravery.
The noble Lord, Lord Ponsonby, asked me about the Online Safety Bill. I cannot confirm that it will be given expedited progress through this House. However, as the noble Lord noted, I believe it is on Report in the other place next week. We will be working with DCMS, particularly in light of this report.
In terms of cuts to the NCA, I do not know how it will be managing its budget. What I can say is that the Government have committed to a £20 million per annum uplift to that budget, which is going through. Whether that impacts staff numbers I cannot really say. I apologise for not having that information to hand. When we do, I am sure we will be able to come back to the House with it.
The noble Lord also asked me to accept the damage done by cuts. I am afraid I am going to refer back to an answer I gave in a debate last Thursday. The world has changed, and a lot of these crimes have developed as a result of the changes we were just discussing regarding the online world, so the responses will have to change. It would be inappropriate of me to use hindsight to say how the world might have been had things been done in a different way, given that the world has changed enormously. I cannot do that.
A number of questions were asked about the mandatory duty. I think the noble Lord, Lord Paddick, called it a statutory duty. This is going to be looked at. The Government have committed to look at all the various remaining recommendations. I remind noble Lords that 107 recommendations were made and 87 have been already actioned because they came out before the publication of the final report. The Government have committed to look at the remaining 20 and respond to them all within the six-month period. That is what we will be doing.
I understand the arguments for mandatory reporting. The inquiry’s report powerfully draws out the systemic failures of institutions to treat child sexual abuse seriously, as both noble Lords have noted, and to properly report allegations of child sexual abuse. As I have just said, we are committed to supporting front-line professionals working with children and to making sure they feel confident and equipped with the right resources and training to identify and respond to concerns or cases of child sexual abuse.
I could go on about this. There is one little caveat I would like to make. The noble Lord, Lord Ponsonby, suggested that the Labour Party was calling for this in 2014. In 2016, there was a consultation on mandatory reporting; I do not know if he remembers that. The evidence was very mixed. There were plenty of principled reasons from high-profile organisations which have a vested interest in this particular subject, which were not necessarily in favour of it. All these things have to be considered, and I am very happy to share those statistics with him afterwards if he would like.
Both noble Lords asked me about the criminal justice system and the various numbers. Again, there were calls for more money which obviously I am unable to answer. However, I can answer a little regarding the numbers of prosecutions and offences committed. I think my right honourable friend the Home Secretary referred to this in his speech. There were 103,496 child offences recorded by the police in the year to March 2022. It is a horrific number and a 16% increase on the previous year to March 2021.
However, there has been an increase, as the noble Lord, Lord Paddick, noted, in the number of convictions for indecent images. That number has increased by 39%. It is still a small number; I acknowledge that it is too small. I cannot say what has been happening to the victims of those images. I would like to be able to give him more information. I will investigate and come back to him if I can. I could go on in terms of the numbers, but, frankly, it is pretty horrible, and I think we should move on.
A question on unaccompanied asylum seekers was asked of me. On average, unaccompanied children seeking asylum are moved to long-term care within 15 days of arriving in a hotel. Obviously, we know that more needs to be done. That is why we are working closely with local authorities to increase the number of placements available and offer councils £6,000 for every child they can provide accommodation for. Any child going missing is obviously extremely serious and we work around the clock with the police and local authorities to urgently locate them and ensure that they are safe.
There is a lot of work being done around public awareness already, to which the noble Lord, Lord Ponsonby, referred. I am sure I will have an opportunity to go into more detail on precisely what that work is, but he should rest assured that it is happening. My right honourable friend the Home Secretary committed to action all the remaining recommendations, or at least to come back with considered responses to them within the six months mandated by the inquiry. I think I have answered most of the questions. I apologise if I have not, but I shall leave it there.
My Lords, the problem is that this is happening today, tonight and tomorrow morning. The Government must decide which of the 107 recommendations should have priority. There can be a debate about this, but one that needs urgent attention is legislation to deal with mandatory reporting. The first question is: on whom should such a duty be imposed? Obviously, it should be institutions responsible for the care of children, as well as individuals in positions of trust. But we also have to be careful that, in our haste, we do not impose a duty on victims to report other victims. They may find it impossible to report their own stories, so why should they be in a position where they have to report someone else’s? In some institutions, it must be perfectly obvious to victims that there are other victims of the same person.
We need to be careful about legislation. It is not an offence of obstructing the police for me not to answer a question; it is an offence to lie. If we are going to amend that law, we need to be clear about how we will do so. Section 44 of the Serious Crime Act 2007 is almost impossible to understand. I beg whoever is responsible for legislation not to simply say, “Well, we’ve got a good Act about that.” It is not a good Act; it is very difficult to follow, and it is confused in any event because it did not follow the Law Commission’s recommendations. So can we legislate urgently to deal with these issues but also be careful about how we do so?
My Lords, I am sure that those of us who sit on this Bench, along with—
Sorry, I thought it was me.
I thank the noble and learned Lord, Lord Judge, for that eloquent explanation of what I have just tried to explain, perhaps less eloquently, to the noble Lord, Lord Ponsonby. The previous consultation on this, which reported in 2018, also illustrates a little of what the noble and Lord described. Some 51% of respondents felt that introducing a duty to act would have negative consequences, 68% felt that mandatory reporting would have an adverse impact and 85% felt that it would not ensure that appropriate action was taken. This included people like the Children’s Commissioner and the NSPCC, who know what they are talking about. Some of the reasons given in the report—these go very much to what the noble and learned Lord said—were that it could
“dissuade victims from disclosing incidents of abuse and reduce ‘safe spaces’ for children.”
It could also have
“an adverse impact on the child protection system … e.g., by impacting the recruitment and retention of staff”.
“Increased reporting may divert attention from the most serious … cases”.
So many other reasons were given, illustrating the complexity of this subject and the care with which it needs to be looked at. So I agree entirely with the noble and learned Lord.
My Lords, those of us who sit on this Bench, along with all on other Benches in your Lordships’ House, are deeply saddened and ashamed by the harm and suffering experienced by victims and survivors of abuse. I salute the courage of survivors in coming forward to share their stories. We are determined to learn from the mistakes of the past and make the Church as safe a place as possible. That is why we welcome this final report and are already embracing its various recommendations with, for example, the Church of England’s redress board, which has a victims and survivors working group. In this respect, what exactly is the Government’s intention? Is it their preference to support institutions, including the Church, in establishing individual redress schemes? Or is it their intention to create a new overarching external regulatory body in this respect?
The right reverend Prelate obviously makes some good points. I will outline what the Government are doing to ensure that all sectors and leaders of society are working together to tackle child sexual abuse. In his opening speech in the other place, the Home Secretary comprehensively outlined the cross-party and multiagency dimension to all of this. We are transforming the way that local safeguarding agencies work together to ensure a more effective response in safeguarding children.
The Children and Social Work Act 2017 introduced significant reforms, requiring local authorities, clinical commissioning groups and chief officers of police to form multiagency safeguarding partnerships. All of the new partnerships were in place by September 2019, but we know that there are still improvements to be made to the quality and consistency of the local partnerships. We are working with local partners to understand and address those challenges in ensuring effective independent scrutiny, engaging with schools and other relevant agencies and distributing funding.
I reiterate that the Government are firmly committed to supporting all institutions that play a role in safeguarding children to develop robust safeguarding strategies that are carefully monitored, ensuring the safety and protection of children, regardless of where they live and spend their time.
My Lords, I worked with the right honourable Member for Maidenhead in setting up this inquiry. At the time, plenty of people said it should not have been launched: they said it was all in the past and that there was no point in raking it all up again. Then they said that the terms of reference were too broad and that it would never end. I am pleased to say that they were wrong on all counts.
I congratulate Professor Alexis Jay on her brilliant stewardship of this inquiry and on her hard-hitting report. As she did in Rotherham, she has revealed truths that mean we can never look at society in the same way again. There is too much to say here, but I will cite a couple of important statistics in the report that have not been mentioned. In any year group of 200 children, it is estimated that 10 boys and more than 30 girls will experience sexual abuse before the age of 16. The number of sexual abuse offences recorded by the police where the victim was a child under the age of four has risen by 45% in recent years. So, as noble Lords have said, this is not in the past; it is very much in the present, and it will continue to wreck lives if we do not do something to stop it.
Having worked on the inquiry’s Truth Project, I have listened to the accounts of victims and survivors. Although everyone’s experience is different, the damage is always the same: families torn apart, lives forced in a different direction and feelings of shame, anger and hurt. We should thank all those who came forward to ensure that what happened to them does not happen to future generations. Thanks to Professor Jay, it does not have to; she has given us the answers.
As I said, it is a brilliant report, but it can only ever be as good as the action that flows from it. So I thank my noble friend the Minister for the Statement, which reflects the deeper understanding that we now have of this issue. But could he assure the House once more that the Government will look quickly and seriously at its recommendations and ensure that all the relevant departments across government play their part in implementing them? As we saw from the interim report, if they do not work together, we cannot drive through the change that is very much needed.
I thank my noble friend for her remarks and commend her for her efforts when she was working with the right honourable Member for Maidenhead. I am grateful for the opportunity to commend the former Prime Minister for her extraordinary work on this.
Those statistics are genuinely appalling, particularly when they are put in those terms. I have read them as percentages, which perhaps seem rather dry, but to give numbers is harrowing. The Government have made it clear that they are determined to work across agencies and across departments; that work will be ongoing, and all relevant departments will be involved in it.
Something the Home Secretary said bears repeating: when asked about a Minister for children, he said:
“We all … have to be Ministers for children”.
I think he is right.
My Lords, it is disappointing that recommendation 13, on mandatory reporting, is not a pure system; it is a bit of a hotchpotch of mandatory reporting systems. Will the Government undertake to compare recommendation 13 to successful models of mandatory reporting elsewhere in the world, including Australia, Canada, Denmark, France, Ireland and the USA? In particular, will they compare the views of public bodies before it was introduced and after? In each of those countries, there has been a significant gain in confidence in the regulated bodies that have to report.
I thank the noble Baroness for those suggestions. I will happily take them back to the department and Home Secretary, and strongly recommend that he investigates them.
My Lords, the Statement made in the other place says, in summary:
“Victims need to know … that they will be heard and protected.”
I will pick up a point made by the noble Baroness, Lady Sanderson, and the noble Lord, Lord Paddick, who focused on the issues of the justice system. Abusers will of course seek out the most vulnerable: those who are the most excluded from society, including young people who may not be in education, employment or training; asylum-seeking children, as many noble Lords have identified; and those from particularly economically and socially disadvantaged communities. For them to be genuinely heard and to be able to talk to a sympathetic ear, resources will be needed in places such as schools and with their GPs and social workers—indeed, if one can imagine it, with immigration officers and border staff. Will the Minister acknowledge that there needs to be adequate resources in all those institutions where vulnerable children will encounter potentially responsible adults? The resources need to be there to enable those institutions to react appropriately.
Of course, I acknowledge that resources need to be adequate.
My Lords, do I have the permission of the House to speak, because I was not here for the earlier Statement?