Public Bill Committees
The Committee consisted of the following Members:
Chairs: Peter Dowd, Clive Efford, Sir Roger Gale, Carolyn Harris, † Esther McVey
† Abbott, Jack (Ipswich) (Lab/Co op)
† Atkinson, Lewis (Sunderland Central) (Lab)
† Campbell, Juliet (Broxtowe) (Lab)
† Charalambous, Bambos (Southgate and Wood Green) (Lab)
† Francis, Daniel (Bexleyheath and Crayford) (Lab)
† Gordon, Tom (Harrogate and Knaresborough) (LD)
† Green, Sarah (Chesham and Amersham) (LD)
† Hopkins, Rachel (Luton South and South Bedfordshire) (Lab)
† Joseph, Sojan (Ashford) (Lab)
† Kinnock, Stephen (Minister for Care)
† Kruger, Danny (East Wiltshire) (Con)
† Leadbeater, Kim (Spen Valley) (Lab)
† Malthouse, Kit (North West Hampshire) (Con)
† Olney, Sarah (Richmond Park) (LD)
† Opher, Dr Simon (Stroud) (Lab)
† Paul, Rebecca (Reigate) (Con)
† Richards, Jake (Rother Valley) (Lab)
† Sackman, Sarah (Minister of State, Ministry of Justice)
† Saville Roberts, Liz (Dwyfor Meirionnydd) (PC)
† Shah, Naz (Bradford West) (Lab)
† Shastri Hurst, Dr Neil (Solihull West and Shirley) (Con)
† Tidball, Dr Marie (Penistone and Stocksbridge) (Lab)
† Woodcock, Sean (Banbury) (Lab)
Lynn Gardner, Lucinda Maer, Jonathan Whiffing, Committee Clerks
† attended the Committee
Witnesses
Professor Sir Chris Whitty, Chief Medical Officer for England
Duncan Burton, Chief Nursing Officer for England, NHS England
Mark Swindells, Assistant Director - Standards and Guidance, General Medical Council
Dr Andrew Green, Chair, BMA Medical Ethics Committee and MEC lead on physician assisted dying, British Medical Association
Glyn Berry, Co Chair, Association of Palliative Care Social Workers
Professor Nicola Ranger, Chief Executive and General Secretary, Royal College of Nursing
Public Bill Committee
Tuesday 28 January 2025
(Morning)
[Esther McVey in the Chair]
Terminally Ill Adults (End of Life) Bill
Examination of Witnesses
Professor Sir Chris Whitty and Duncan Burton gave evidence.
We are now sitting in public and the proceedings are being broadcast. Before we begin, I remind Members to switch electronic devices off or to silent. Tea and coffee are not allowed during sittings. Before we start hearing from the witnesses, do any Members wish to make declarations of interest in connection with the Bill? No.
We will now hear oral evidence from Professor Sir Chris Whitty, chief medical officer for England, and Duncan Barton, chief nursing officer for England, NHS England. Before calling the first Member to ask a question, I remind Members that questions should be limited to matters within the scope of the Bill. I also remind Members that time is tight, so please keep your questions to the point. We must stick to the timings in the sittings resolution that the Committee has already agreed. For this session, we have until 10.05 am. Will the witnesses please briefly introduce themselves for the record? If you are to give an opening statement, please keep it short.
Professor Whitty: I am Chris Whitty, the chief medical officer for England, and I am also representing the chief medical officer for Wales. One statement, which is on behalf of Duncan and myself, and all the CMOs, is that we are completely neutral on the principles of the Bill, which we consider are entirely for society and therefore for Parliament. Although we are answering technical questions, we will not be answering questions of principle, because we feel that is a societal question. We have made it clear to the medical profession, however, that individual doctors should be able to make whatever statements they wish. Obviously, doctors have strong views on all sides of this argument, as members of society do.
Duncan Burton: Good morning. I am Duncan Burton, the chief nursing officer for England. For transparency, I will say that I am also a volunteer trustee of a hospice.
Q
My question is: do you believe that it would be safe to implement this legislation if those provisions had not been fully put in place?
Professor Whitty: If this Bill is passed—I want to stress that; I will say it once, but assume it applies for all the answers I subsequently give—we will clearly need both: a period to make sure that there is technical guidance and legislation, via secondary legislation, because obviously the primary legislation is the Bill; and necessary training for people to be able to do this in an appropriate and dignified way, if that is what Parliament chooses.
So would it be safe?
Professor Whitty: We would want to have the time to do that, but you can do things at speed if you need to. My view is that this is something that is best not done at speed if we can avoid it.
Q
Professor Whitty: That is an absolutely critical question, because it is very important that if the Bill is passed, all parts of society, of whatever ethnicity and of whatever background, have equal access to the Bill—or not, as Parliament determines. That will require adjustment in a variety of ways. Some can be done at a macro level—for example, making sure that everything is translated into the major languages spoken in the United Kingdom—but a lot of it will be to do with the individual interactions that doctors, nurses and other healthcare providers have with individual patients, which must take into account their own starting point, their own knowledge and, most importantly, their own beliefs.
Q
Professor Whitty: I will give my view, and it might be useful to get Duncan’s view on the nursing side, because nurses will often be heavily involved in these discussions.
I would divide the kind of training that is needed into two broad groups: training that is essentially normal medical practice but may need some variation, and things that are clearly specific to this Bill. Issues, for example, around mental capacity—as determined by the Mental Capacity Act 2005—are dealt with every day, in every hospital up and down the country; every doctor and nurse above a certain level of seniority should be able to do that normally. It may require some slight adjustment. There is an absolute expectation within the Act, for example, that the more serious the decision, the greater the level of capacity that someone needs to have. That is already built into the principles of the Act and the way that things are done. I would extend that to the management of end of life, which should be a normal part of medical and nursing practice—we will all die eventually, and that has always been part of medicine, and always should be. That training should be generic, but may need some adaption.
There will then be some specific things that will be necessary for people to understand the legislation, including, in some cases—if this Bill is passed—if they are to take part in the final part of prescribing drugs to patients. It is much more likely that a very large number of doctors and nurses may get involved in the very earliest stages, because someone may raise an issue with their GP, nurse or consultant, who will need to have the basic understanding for that. In my view, the more detailed later stages will require some specific training. I think there will be a gradation of doctors: those who are happy to have the general, initial conversation; those who are happy to have the structured conversation that follows; and a minority who will be happy to go on to take part in the final stages.
It is very important that the wishes of the patient are respected. That is the central point of this. We must start with what is good for someone in their last six months of life, and for their immediate family, but we must also make sure that the wishes of healthcare professionals around this area are absolutely protected, when it comes to conscience and to choice.
Duncan Burton: I am mindful that there are two groups of staff who would potentially be working in this service, if the Bill is passed, but also of the wider workforce. At 2 o’clock in the morning, when a patient wants to have a conversation with somebody about end of life, it is going to be a nurse with them, or a nurse in a care home, or a specialist nurse providing cancer care, so we have to think about the training and support that is required for them, be that around signposting or explaining where they can go to access more information. There is an important part about the entire wider workforce that we need to think about.
Clearly, for those people who are working in such a service, we need to think about the safeguarding elements, and how we make sure there is support through safeguarding training and confidentiality—particularly mindful that some patients may choose not to tell their families about this. We need to think about how we enable and support staff in managing those kinds of circumstances and navigating the legal requirements through the Bill. We need to think ahead about what we need to do in undergraduate training for doctors and nurses, and in the curriculum.
Q
Professor Whitty: You are absolutely right: it is a completely normal part of medical and wider nursing, and other practice, but particularly medical practice, to consider issues of consent and capacity. It can be that someone says they do not want treatment that is clearly going to be lifesaving. A very well known example is that of Jehovah’s Witnesses, who choose not to have blood products. If they are bleeding heavily, that is an issue that could lead to the end of their life. Provided they understand that and they have capacity, that has to be respected.
The alternative way—the other thing that doctors have to do—is to give people advice before they have major operations, chemotherapy or other drugs that may in themselves lead to the end of their life, but which also may lead to a benefit. Explaining to people the risks and benefits, including the fact that they may lose their life as a result of the next stage—if someone is at high anaesthetic risk, that is not a trivial risk sometimes with operations—is a very standard part of medical practice that you do from the point that you qualify. Obviously, as people get more senior, they tend to be more experienced in it—and, as with most things, if you get more experience, you generally get better at it.
Q
Professor Whitty: If I am honest, I think it would be extremely difficult. If I may, I will explain why, because it is a really important question. Let us take cancer. For the great majority of people with the majority of cancers that are diagnosed tomorrow, the doctor who is seeing them will say, in all confidence, “You have cancer and I expect you to be alive not just next Christmas, but for many years to come.” The fact that they have cancer is not in itself a demonstration that they are going to die. In fact, the majority will not. Almost 80% of people with breast cancer diagnosed tomorrow will still be alive 10 years later, for example.
Equally, there are people who may not have a single disease that is going to lead to the path to death, but they have multiple diseases interacting, so they are highly frail; it is therefore not the one disease that is the cause, but the constellation that is clearly leading them on a path inexorably to a death at some point in the foreseeable future. Exact timings are tricky—we might want to come back to that. I therefore think it is quite difficult to specify that certain diseases are going to cause death and others are not, because in both directions that could be misleading.
Q
Professor Whitty: At the extremes —most people are at the extremes—it is very clear what is going to happen. For most people, you can say with confidence, barring some extraordinary accident like being hit by a car on the way out, “You’ll be fine in a year, even though you have heart disease, cancer or whatever.” At the other extreme, there are people who are clearly dying and will die in the next two or three days, and virtually nothing will change that reality.
What we are talking about in the Bill, of course, is a point between those stages, but people will definitely reach a point where there will be an inexorable and, importantly for the Bill, unreversible slide towards a point of death. People can make a reasonable central view, if they are experienced in a particular disease, about when the death is likely to happen, accepting that there is a spread around that. I am sure that the general public and Members of Parliament fully accept that this is not a precise science. This is a central view, and there is a big academic literature around this. Some people will die significantly earlier than they are predicted to; a small number will die very significantly later; and some people will certainly die a bit later or to some degree later. The central view is usually reasonably accurate—that someone is now on a pathway from which there is not going to be a return.
Q
Professor Whitty: Duncan, why don’t you take the first bit and I will take the second?
Duncan Burton: In terms of looking for signs of coercion, all of our nursing and clinical staff have safeguarding training, which already looks at things like whether people are under financial coercion or other forms of abuse. That training is already in place and it is extensive across the NHS and social care. If the Bill is passed, we will need to look at how we strengthen that training in relation to spotting the potential signs of coercion in this space as well. Given that that mechanism is already in place, I think that would be an extension, so it is important that we factor that in. I am also mindful, given the scale of colleagues we have working across health and care, that the time between the Bill being passed and its implementation is sufficient that we enable everybody to receive that additional training, if it is required.
Professor Whitty: In terms of strengthening the Bill, as a practitioner, I was relieved that the decision was for the Bill—if it stays this way—to stick with the Mental Capacity Act, and that was for two reasons. First, that Act is used up and down the country by doctors and nurses every day; they know it and they understand it. Although, as you say, it is a large piece of legislation, it is one that people have worked through in practice multiple times. If you ask six or seven doctors, “Does this person have capacity?”, in almost all cases you will get six or seven identical answers, because people are used to using it.
It additionally has the advantage of being tested in the courts. That has gone as far as the Supreme Court, and the various ambiguities that were inevitably in the legislation have been clarified by senior judges. Therefore, to practitioners like me, it feels like a piece of robust and predictable legislation. Within the legislation, it is very important that there are some situations where you will need to call for additional assistance. For example, if someone has a co existing mental health condition, you will probably want to ask a psychiatrist additionally whether that condition is interfering with the decision taken to the point that someone loses capacity for this very important decision. The level of capacity has to be reasonably high.
My own view is that starting this way is the sensible thing to do. That does not mean there could not be arguments for some additional points, but I cannot immediately—again, as a jobbing doctor—see ones where I think, “This is going to make a big difference.” The fact is that this is founded on a very established bit of well used and well recognised legislation.
Q
Professor Whitty: The further you go up in the seriousness of the decision, the more you would do that. For example, if you were setting a finger that had been broken, you are not going to wait until a psychiatrist has said that you can do that. Within reason, provided that someone gives consent, you will do that. You will be much more cautious about moving forward with things like open heart surgery or deprivation of liberty if you think there is uncertainty. It should be clear. For the majority of people, it is very clear they have capacity or very clear they do not. There is a relatively small—but important—number in the middle where that is less clear and where additional views are relevant, particularly where there is a question of co existing mental health issues. The fact of the mental health condition does not in itself mean that someone does not have capacity, but what has to be taken into account is, “Do they have the capacity for this decision at this point in time?” That is how the Mental Capacity Act works.
Q
Professor Whitty: As we have seen in covid, the NHS, like any service, can swing very fast if there is a need for speed. In this case, I think most people in society would say that the key thing is to get this right. Personally, I would rather it was not running against a timeline. You would not want it to drag on forever, because then you have uncertainty for everybody, but I think Duncan and I would both say that two years seems a reasonable starting point. With some things, it might take longer than that to work out how we are going to provide this in the most safe and equitable way—for example, in dealing with minority and other groups. We need to get all that right and, at least at first pass, get it as close to good as we possibly can.
Equally, we may find when we first start using the legislation that there are some things that we had not considered at the beginning, and therefore we need to go back and improve on them because we just had not thought about them in the first way through the gates; that is why I hope that some of the more operational issues are done through secondary legislation and regulation. Inevitably, that is true for many bits of legislation, but it is particularly important here.
I go back to my very first comment: the central person here is an average citizen in their last six months of life. What we do not want is a system very difficult for them to navigate so that they spend their entire last six months of life—if the Bill is passed and they choose to take account of it; they are going to be a minority—stuck in a bureaucratic thicket. We need to keep this simple. My view is that the best safeguards are simple safeguards. Overcomplicating usually makes the safeguard less certain.
Q
Professor Whitty: I think that there is a big difference between the Act coming into initial force—that is, “This is now where the law is”—and the service being provided. On the second of those, I would argue against putting a firm deadline, with a reasonable expectation that the NHS and others should be involved in trying to make plans for this as fast as possible. But if the Bill is passed, we are going to have to sort out multiple different things to get this to work. If we were three months away from being able to get something sorted out, I would not want to have a situation where it all had to start the following day. I think that would make it much harder to provide a safe, fair and secure service.
Duncan Burton: In my understanding, the Bill does not call out the NHS specifically in terms of providing this service. A number of steps would have to be gone through to understand the implications—the operational and training implications, as we have already discussed—to understand the timeline required. For the reasons Chris has outlined and as mentioned earlier, when thinking about the wider implications for the workforce there would need to be sufficient time to be able to work through those.
Q
Professor Whitty: That is a key question, and to me that does seem something that Parliament may want to debate. That is not a question for us, but it is a point of principle one way or the other.
Q
Professor Whitty: First, I have had quite a lot of conversations—not just with the chief medical officer for Wales, but all the other chief medical officers and indeed a much wider range of the medical profession; I wanted to feel that I was giving a central view of the medical profession in terms of the practicalities. My view is that, in a sense, the principles of the Bill are no different between England, Scotland, Wales and Northern Ireland, although the legislation would apply only to England and Wales were it to be passed.
The operational questions we have been talking about will be either subtly or importantly different between the different jurisdictions for a variety of different reasons. I do not think that is a problem, provided it is in secondary legislation and it allows the different jurisdictions to do things in the way that best suits their own set up. Again, as we saw during covid, different nations will choose to reach the same end state using slightly different practical routes.
Q
Professor Whitty: Yes. I think in principle it would be better to be as close as possible, but if there were important practical differences why it was not going to start on the same date, the more important thing would be to get it right rather than to get simultaneous timings.
Q
I also heard what you said about the scaling of decision making, but within the Bill, in some of those scenarios there is no mandating; the word “may” is used rather than “must”. I want to understand your viewpoint on whether it would provide stronger safeguards if those parts of the Bill were tightened to include “must” rather than “may”, and if the reference to capacity were replaced with a separate definition of “ability”, as proposed in our amendments.
Professor Whitty: I am probably not the best person to ask about the exact drafting of the Bill in terms of “may” and “must”, but I can answer the second part of your question, which is really important.
If there were no Mental Capacity Act, there would be an argument, which has been used for a long time, that the Bill would have to define what was meant with a fair degree of clarity. It would not be able to do that with just one clause; there would have to be quite a lot of clauses, if I am honest. All systems of this sort are going to be imperfect. The reason why I think it is sensible to base yourself on the Mental Capacity Act is that it is well used and well understood in practice by practitioners every day. Having a system with two completely separate groups of assessment, one of which has never been tested in the courts or used outwith this Bill, would lead to a whole set of potential complications and ambiguities, which are not there at the moment because we have a well tested mechanism through the Mental Capacity Act.
People should move away from the Mental Capacity Act with some caution, because I think that will cause as many problems as it solves. It is not clear to me what problem people are trying to solve by doing that, given that the Mental Capacity Act clearly makes the point that the more severe the decision, the greater the degree of capacity that has to be assumed before people can actually take that decision. That is the foundation of some of the disquiet that people have had, but it is central to how the Mental Capacity Act works in practice.
Q
Is that in line with your thoughts on the matter?
Professor Whitty: I think that is a reasonable point in time provided that, in taking that period into account, Parliament assumes that we mean a central view that this is six months, although it might be before that and it might be after. Other times would be equally reasonable, but if you are going to choose one, then six months is reasonable. It is generally very predictable that someone is going to die in the foreseeable future, but predicting whether that will be in five months or seven months is a lot harder, and there would be some caution.
Notably, in the countries that have chosen to go down an assisted dying route—a variety of different ones have been chosen—a significant minority of people die before they actually get to the point where that occurs because there is uncertainty in both directions. I think that period is as good as any other, but I want people to be clear that this is not an exact science where you can say, for example, “On 20 August.” It is not as tight as saying that a baby is going be born on a certain date. It has a wider spread of uncertainty around it. In the overwhelming majority of cases, that does not mean that it will go on for months or years longer, but there will be some degree of uncertainty.
Q
Professor Whitty: Duncan may wish to comment for nurses. For doctors, we should be very mindful of the fact that for some doctors, as for some citizens, this is a point of very strong principle indeed, therefore there will be a gradation of people feeling that they can personally be involved in it. I suspect that if they themselves did not feel able to do it—because of conscience or choice, or because they did not feel that they had the necessary skills—the great majority would have no problem referring on, but it might be an issue for some people.
Personally, my view is that we should be able to have the range, provided that people are aware in general that, if one person cannot provide it and then does not wish to discuss it, there are alternative routes. But that really is a matter for Parliament and if Parliament says, “No, actually, that is unfair on the patient, because then the patient is having to go through an extra step,” that is an alternative and perfectly reasonable principle. Parliament is going to have to balance those two principles; that is not for me as a doctor. I just think that that range of opinion needs to be thought through when people are coming to that final parliamentary decision.
Duncan Burton: If I could add to that, again, I think that bit about the wider workforce and how we would support them is really important. We have situations like this already. We have advice professionally around things such as abortions and working in embryo services and fertility, for example, so we need to make sure that the safeguards for our staff are really clear. As Chris has said, our staff will have a range of views and opinions on this, as will the wider public. So the work you do in creating this Bill is really important in terms of the advice that we give to people about signposting and having those conversations. Actually, our clinicians are having conversations every single day about the choices that people have at the end of their lives.
Q
Professor Whitty: I would hope that most doctors are capable of identifying that someone has some degree—or a large degree—of mental health distress, or mental health illness, if you wish. What not all doctors will feel comfortable doing is actually deciding whether that is sufficient to interfere with someone’s ability to make a decision with full capacity. That is where help from colleagues from psychiatry, and mental health more widely, is going to be useful.
But that should be good medical practice, in my view, under all circumstances. This Bill takes it to a high level of need because of the seriousness of the decisions being taken, but that is part of medical practice. Duncan will have discussed with senior nurses, when he when he was operating clinically, “Should we actually get an opinion from a mental health colleague”—either a community psychiatric nurse, if it is that kind of question, a psychiatrist or others—“to make that assessment?”
That is really the question, but I certainly would not want to be in a situation where the fact that someone with a terminal diagnosis will have some degree of low mood in itself just rules them out from any kind of medical intervention—this, or any other. That should not be the case. They have to have access to whatever the state and the medical profession are able to provide—again, obviously, depending on what Parliament decides on this particular Bill.
Q
Duncan Burton: I think you are absolutely right—anybody working in stressful environments. If the Bill is passed, we will need to make sure that we have sufficient psychological support for nurses and doctors working in these services, as we do now for many of our nurses and other professionals working in these kinds of situations. People working in end of life, or cancer nurses, for example, often have psychological support to help them deal with some very difficult conversations with patients.
We would need to look at that and make sure that sufficient support was in place for anybody working in these situations. We would also need to be mindful about the wider workforce, given the issues from such a debate as this and how the decisions to signpost people on to services might create—for some people—moral injury. We do need to think about the support in place for those people.
Q
Professor Whitty: It is entirely a matter for Parliament, at one level, but I can give a view. It goes back to the point that Naz Shah and others made earlier: the situations that people find themselves in are extraordinarily different—culturally, where they are in their lives, where their families are and a whole variety of other issues. Only the clinicians dealing with that person will really know all the different factors at play. If there is a good therapeutic relationship, and you would certainly hope there was, they should understand a whole variety of things that are very difficult for people sitting around this table to predict, however wise you are—although I am sure you are extraordinarily wise, to be clear. That was not my point. My point is that this is very difficult and I could not, at this point, write down a law that would be helpful to someone dealing with a whole range of different scenarios in which they are going to have to have an end of life discussion.
My own view, for what it is worth, is that I would do fewer things rather than more. That is partly because simplicity is the key to really good safeguards, in my experience. If the safeguards are really clear and simple, everybody understands them—if you ask six people, “What does this mean?”, those six will give you the same answer. The more complicated you make things, the more room there is for ambiguity and uncertainty—because different things are playing in—and the more difficult it is for the patient, their family and the medical and nursing professionals assisting them, to navigate the system.
Without in any sense wishing to curtail what Parliament might wish to do, I would make a plea for simplicity wherever possible and for accepting the extraordinary variety of people’s lives, which may have unpredictable consequences in terms of the way the end of their lives plays out.
Q
Professor Whitty: I would certainly recommend that this is done by guidance or in secondary legislation, which can be adjusted if it turns out that it is not having the desired effect. Two things can change: first, we can spot things we had not thought of in the first place, however far sighted each of us is. The second is that medicine itself changes, the diseases people suffer from change and so on.
An Act has to be durable and that is why I have my view about secondary legislation and guidance, which have the ability to adapt in a way that primary legislation cannot. The fundamentals obviously need to be in primary legislation, but these kinds of issues are often done better in secondary legislation.
I am very mindful of the time, as it is now three minutes past 10. This will be the last question of the session.
Q
Do we take it, by implication, that you are fearful that this Bill could undermine good end of life care? In your view, how might we mitigate some of those risks in the Bill?
Professor Whitty: I will give a view and then Duncan will be able, as chief nurse, to mention the parallel bit of advice that said similar things. I think all medical, nursing and health professionals very strongly believe that palliative care and pain alleviation, which is not the same as palliative care but overlaps with it, and end of life care, which is also not the same but overlaps with it, are essential, and in some areas are not to the high standard that we would hope for. That would be a common view across the medical profession.
My own view and hope is that the Bill should not make the situation either better or worse. It changes one particular aspect in a very important way, but it seems to me that on the principle that we should be improving end of life discussions, which is where end of life care starts from, as well as supporting further the alleviation of symptoms and the provision of palliative care, there would be no disagreement from anybody in the medical or nursing professions, any other professions or the general public. That must be fundamental to how the Bill is thought about—
Order. That brings us to the end of our allocated time with these witnesses.
Professor Whitty: Duncan, do you want to say if you agree or disagree?
Q
Duncan Burton: I absolutely agree with that. This is, obviously, a decision for Parliament, but it is clear that there is increasing discussion in society around death and dying, and I think that is important. It is important that we have discussions and support people with their choices at the end of life, so anything we can do to increase that is important.
I thank our witnesses, Professor Chris Whitty and Duncan Burton, on behalf the Committee. I also thank Committee members for their short questions.
Examination of Witnesses Mark Swindells and Dr Andrew Green gave evidence.
Q
Mark Swindells: Good morning. I am here from the General Medical Council. The GMC, as the independent regulator of doctors across the UK, does not have a position on what the law should be on assisted dying. Similarly to what the chief medical officer said, we view it as a matter for wider society and, ultimately, Parliament. Having said that, we have looked at the Bill and, were it to pass, we would obviously be willing to work on things like the statutory code of conduct that it talks about to make sure the implementation works as well as possible.
Dr Green: Good morning. My name is Andrew Green. I am a retired GP, and I chair the medical ethics committee at the British Medical Association. We had a big survey of our members in 2020 and, on the basis of that survey, we moved from opposition to neutrality. All that means is that we neither support nor oppose any changes in legislation. That position has enabled us to reach out to people with a wide range of views and produce policy that we believe has broad support, looking particularly at the areas where it impacts on our members. We have had very positive engagement with legislators throughout the United Kingdom and the Crown dependencies, with the aim not of supporting the Bill, but of making sure that if it goes ahead, it works for doctors and patients. We have always believed that those things go hand in hand.
Thank you very much. For broadcast purposes, can everyone make sure that they are as loud and clear as possible?
Q
What are your views on the compatibility of that element of the Bill with the principles under Montgomery consent?
Dr Green: Both of these items came about because of things that were in our policy, and we are pleased to see them in the Bill. You are right that assisted dying must not become just another tick box thing that doctors mention to patients. That must not happen, and that is why we believe that it should not fall within those two Supreme Court judgements that you mentioned. But there is another side to that coin: we think that there are some circumstances in which doctors should be able to mention this to their patients.
I will just explain why that might happen. The consultation shows that some patients find it very difficult to bring up sensitive subjects with their doctors, even when those are the most important thing on their mind. Doctors are aware of that, and I hope that we get very good at reading between the lines of what patients say to get at what is left unsaid. In those circumstances, we need to be able to open the door for the patient, so they can go into a safe space and have those difficult discussions. That is what we are talking about here.
As a clinician, it is very difficult to know when to have those conversations. When we are battling with that internally, the last thing we would want is to feel the weight of legislation behind us, so please do not pass legislation that makes it harder for doctors to understand their patients. That is why it is important that in particular circumstances we should be able to gently raise the subject.
Mark Swindells: The GMC sets guidance on decision making and consent, as you will know. That is based on the existing law, including the case law on Montgomery, so it puts a lot of weight on the patient’s autonomy, the patient’s role and the doctor’s role in supporting that in the provision of information on different options, including the option of no treatment. Our guidance follows the law, so were the law to change, we would look at it and accommodate. We do not have a formulated view on what the eligibility should be, but we know the BMA’s stance.
Q
Mark Swindells: We have not done a forensic legal assessment of that nature, but obviously Montgomery is in case law, and Parliament has the power to set primary law. I listened to what the chief medical officer said and what Dr Green says about how restrictive or otherwise that might be in terms of the doctor’s role with the patient.
Q
Dr Green: Obviously, it would be great if we worked in a system where doctors had all the time they needed to deal with their patients. I believe that the Bill mentions a duty to provide information from the chief medical officer, and having read the Bill, to me it seems very much like this might be in the form of a website or leaflet. We believe that it is important that patients should be able to access personalised information, and we would like to see an official information service that patients could go to, either as a self referral or as a recommendation from their GPs or other doctors. That would give them information not just about assisted dying, but about all the other things that bother people at this stage of their life, and it would mention social services support and palliative care. It could be like a navigation service as much as an information service. That might address some of your concerns.
Q
Dr Green: You are right: all medical staff have safeguarding training, and of course patients make important decisions often with the influence and help of their family members. Usually this influence is helpful, and it almost always comes from a position of love. The point at which such influence becomes coercion is difficult to find out, but my experience is that it is rare. I would recommend that you look at what has happened in other parts of the world that have more experience with this, because they have it as part of their training modules. Certainly, we would expect capacity and coercion training to be part of the specialised training that doctors who opt in would receive. I anticipate that the general safeguarding training should be sufficient for other doctors, who would obviously only be involved at that very early stage.
Q
As I understand it, the General Medical Council already has guidance on dealing with assisted dying if it is raised by a patient, and how doctors should handle that. How easy would it be to translate that guidance—the process struck me as something that does not hinder but also does not enable—into something more informative?
Mark Swindells: It is important to note that our guidance on assisted dying is framed in the current law, so it guides doctors to explain that it is not lawful for them to assist their patient to die. It talks about the importance of explaining other available treatment options, including palliative care; making sure that the patient’s needs are met; and dealing with any other safeguarding matters. Oure guidance does follow the law, so if the law were to change, we would obviously attend to that. It is not framed quite as you are suggesting, so I do not think that would lift and shift into what the guidance would need to be for doctors if this were to pass.
Dr Green: I do not have any experience with what you are describing, but it would certainly make sense to look at best practice in other areas.
Q
Dr Green: As a general principle, I do not believe that unnecessary barriers should be put in the way of communication. This is such an important area for patients that it is vital that they form a good, trusting relationship with their key medical adviser, who would usually be a doctor. I also have to say that at the end of life, we depend a lot on our specialist nurses— Macmillan or Marie Curie nurses—and it might well be that they are the person whom the patient trusts most. Please do not put barriers in the way of understanding.
Q
Dr Green: Indeed. I believe that in New Zealand—and I think in the state of Victoria, but I would need to check that—there have been official reviews that have identified those concerns, and they are looking to review the legislation.
Q
I would like a quick clarification from Dr Green. In terms of the survey, my understanding is that the British Medical Association’s official position is to be neutral. The majority in favour of neutrality—moving away from an opposed position—were junior doctors and those not working with the elderly and the dying, whereas the great majority of doctors who work in palliative care and work with dying people remain firmly opposed to a change in the law. Is that your understanding?
Dr Green: There were some variations between specialities; that is true, but within all specialities, there was a wide variety of opinion. It is that wide variety of opinion that the BMA has based its policy on.
Q
I have a question for you, Dr Green, on the delivery of the service if it is brought into law. Is it your understanding that the Bill mandates the NHS to provide an assisted dying service? I appreciate that it is not clear in the Bill. Nevertheless, it does authorise the Government to pay for it and it establishes this right. My question to you is this: is this a medical procedure that we are proposing to legalise, and should the NHS provide it? If the answer is yes, should that be a separate service within the NHS or should it just be part of general practice?
Dr Green: We have not taken a view as to whether it should be inside or outside the NHS. That is not for us to take. We do believe that it should not be any part of any doctor’s normal job to provide assisted dying. In other words, it should be set up through a separate service with a degree of separation.
We believe that is important for patients, because it would reassure patients who may be anxious about the service that it would not just be part of their normal care. It would reassure patients that the service they were going into had proper quality and proper audit attached to it. It would reassure doctors, because doctors who did not want to have any part would not feel that it was part of their normal job, whereas the doctors who wanted to go ahead would be assured of having support, emotional support and proper training. Also, it should, hopefully, reassure the providers, who would then be assured that it would not be expected of them just as part of their normal duty. We believe a degree of separation is very important.
Q
Dr Green: I think we are always concerned about resourcing, and I can only back up what Dr Whitty said about the importance of palliative care.
Q
Mark Swindells: I would agree with you that there certainly needs to be really clear guidance for doctors on that scenario. We have not taken a view on whether that needs to be in the Bill, in regulation or in the statutory code of practice. What I would say is that we would be willing to participate in the setting of that. It would be very important to listen to the view of doctors and indeed patients who might be interested in taking such a course of action, to understand their issues.
Q
Mark Swindells: I am not trying to duck the question, but because we do not take a general view on whether the Bill should pass or not, we have not taken an established view on the delivery mechanism for it.
Q
Mark Swindells: We do get inquiries from doctors who are concerned that they are doing the right thing when it might become apparent to them that a patient wants to travel overseas to access assisted dying. We have taken legal advice, and on that basis, we guide doctors that it is permissible for them to provide the existing medical records to that patient, as you might under a subject access request, but to be really cautious about going any further in terms of recommending that or assisting the process more than that. That is based on our understanding of the existing law in the Suicide Act.
Dr Green: Of course, that leads to a further issue. As we heard from Dr Whitty today, this measure may progress at a different speed in Scotland and England and Wales. We also have the Crown dependencies, which are some way further ahead than the mainland Governments on it. That raises an issue for doctors who work in England and Wales but treat patients in the Crown dependencies. We would want clarity about the legal situation regarding a doctor in Liverpool who is treating a patient in the Isle of Man, should the law allow assisted dying in the Isle of Man.
Q
Dr Green: I do not think I ever suggested that doctors should recommend assisted dying. If I did, I apologise—
Sorry—I meant the provision of information for someone.
Dr Green: The provision of information would be very useful, because in a situation where a doctor was unwilling to have an initial discussion with the patient, it would provide a way for the patient to get that information that was in no way obstructive.
Q
Dr Green: We have not taken an official view on doctors recommending it, but I do not think it was ever in any of our minds that doctors would be recommending it as a course of action to patients.
Q
Dr Green: I am reluctant to make a statement on that in this forum. We will go away and discuss it, and come back to you.
Q
The question that worries me is, to be able to fulfil all those actions in all cases, without fear of mis determining, the two doctors would have to be specialists in all the relevant diseases. For example, if somebody has a brain tumour, lung cancer, or a different type of cancer, would the doctor have to be an expert in that to determine that the person is terminally ill?
From the GMC’s point of view, would we find ourselves in a situation where doctors are working outside their professional competencies and expertise? From the BMA’s point of view, how do we protect doctors from finding themselves having to diagnose life expectancy for a disease they are not a specialist in, or to determine capacity when they are not a specialist in that, or to determine a lack of coercion when they potentially do not know the patient and do not have experience of that? Finally, when the next step is taken and the court has to rely on the testimony of these doctors to protect the patient, can those testimonies safely be relied on by a court and by a judge, given all those concerns?
Mark Swindells: There are quite a few points there—let me work through them backwards. We have some existing guidance for doctors when they act as a witness—for example, in a court setting or a medical legal situation—that talks in general terms about the importance of being an appropriate witness. Inherent to that is some expertise and understanding of the topic they are assisting the court on. I suppose that those sorts of principles would be ones that, if the Bill is passed in this form—I say again, the GMC does not have a view on what the delivery mechanism or the Bill should look like—are applicable points from the guidance, which would read across.
You heard from the chief medical officer his caution with regards to going with a condition based assessment for this sort of thing. We would not have a particular view on that, but there is one thing that I want to highlight. The Bill talks about specialism in the context and seeking advice from a psychiatrist. On the specialist register held by the GMC, there are five specialisms connected with psychiatry, so some clarity—whether the Bill is intended to cover any, or a particular one, of those—would be good.
I know that it is not restricted in the “independent doctor” and “coordinating doctor” roles in the Bill either, but we are aware that when doctors pursue a specialty, in the sense that they become accredited and go on to our specialist register, that does not fix in time their individual scope of practice or expertise. Many doctors will go into slightly different fields, or focus on one particular area, so one cannot necessarily rely on the specialist register as a current indication of a doctor’s area of competence in that way. On what the precise delivery mechanism is and the point you make about whether either of those two roles of doctor have seen the person, because we have not taken a view on what the law should be, we have not taken a firm view of any process or eligibility, but I note the point.
Dr Green: If I may, I will clarify my previous answer, having had a little more thought. I do not believe that it is ever appropriate for a doctor to recommend that a patient goes through an assisted dying process. My internal thoughts on whether it should be on the face of the Bill, contained in guidance or contained in good medical practice was the point that I was unsure about.
indicated assent. Dr Green: With regard to the specific questions, no, I do not believe that a doctor has to be a specialist in the individual disease at stake to advise a patient about prognosis. I can only refer you back to what Dr Whitty said: that in the majority of cases, it is fairly clear—this applies to capacity, too—but in some cases, it is not so clear. What is important is that the doctor has the ability to seek further advice if they need it; it is not always required.
Q
to go forward with the assisted dying request “must, if requested…refer…to another registered medical practitioner”.
Are you happy with that clause?
Dr Green: No, we are not, because we know from our survey that some doctors feel very strongly about this. The word “referral”, to a doctor, means writing a letter or communicating with another doctor to see, but some doctors would find themselves not able to do that. For that reason, we believe that there should be an information service for the doctor to direct to. There is a particular problem with the word “referral”. Doctors would not be able to be obstructive; they have the same duties under good medical practice as they do, for example, with termination of pregnancy requests.
Q
Dr Green: We have not taken a view on the qualifications of the doctors involved. We had discussions about what grade they should be, for example, but we took the view that their skillset and training was more important than their grade or position.
Q
Dr Green: We did not take a view on that. We thought that training and experience was more important.
Q
Dr Green: That is why it is important that doctors should be able to opt out at any stage of this. There are doctors who would find it difficult to do that, and it is important that their position is respected.
Q
Dr Green: What would happen is that the doctor would provide the patient—through their receptionist, through leaflets or through a telephone number—with somewhere they could get the information. You cannot just abandon a patient. They have to be sure that the patient has the ability to do what the patient wants to do.
Q
Dr Green: Yes. It is the “referral” word that is problematic for us.
Q
I am interested in how that fits in with those very difficult conversations. When a patient executes that right to refuse treatment, are those cases logged? Are they monitored or reported on?
Mark Swindells: There was an important piece of case law—I think in the 1990s—that clarified that a patient refusing treatment and subsequently dying is not an act of suicide. You are right that our guidance talks about the importance of a doctor explaining to the patient about the likely course of action in terms of the option for no treatment. Again, that is intertwined with the Mental Capacity Act 2005, and puts a lot of autonomy in the space of the patient, along with the consent case law that we covered before.
On the previous point about referrals, our guidance is similar to what Dr Green was saying: in the case of conscientious objection—for example, on abortion—the important point is that, from the patient perspective, they are not left with nowhere to go. If that assists, that may be a principle that helps and reads across.
Q
Mark Swindells: Yes. It would be important for the patient’s records to cover the points of consent and that the doctor has recorded that they have interacted with the patient that way. I do not believe it is centrally held or collated in any sense like that, but I may be wrong.
Q
Dr Green: Yes, with the exception of the referral.
Thank you. I just wanted to clarify that.
Dr Green: Of course, we would regard much of clause 4(4) as normal care in any case.
Q
Dr Green: As Dr Whitty said, I think simplicity is the key here.
Q
Dr Green: In terms of the cross border issues?
Yes.
Dr Green: I think the concerns are that patients, particularly those from the Crown dependencies, might be looking for some things—for example, report on life expectancy—from doctors on the mainland. I think it is clear that if a doctor travelled to the Isle of Man or Jersey to do the work there, the GMC would be happy for them to do so, but we would want a clear understanding that they would not be at risk of any other legislative problems—from the DPP, for example.
And of course legislation is progressing in Scotland, which has different definitions from the legislation that we are discussing here.
Dr Green: Correct.
Q
Mark Swindells: There are aspects in which the law will differ, including on capacity. As a UK wide regulator, we have managed to attend to that in our guidance, so that doctors are as clear on their responsibilities as possible when they lie either side of a devolved border. There is a nuanced point with the Crown dependencies. In law, we are a UK wide regulator, and we know that the Crown dependencies and Gibraltar will choose to use doctors who are on the GMC register. Officially, we do not legally cover those areas, but it does give us some regulatory purchase there. If a doctor wishes to remain licensed to practice on the GMC register, there is a commitment to follow our professional standards.
I am mindful of time, so this will probably be the last question.
Q
Mark Swindells: We do not hold data. I have seen the coverage of the Bill and the uncertainty. I think we would agree with a lot of what the chief medical officer said to you about the stepped decision that a doctor will make, depending on the importance of the situation. We try to capture that in our end of life care guidance. We also agree with the point about a doctor giving a central estimate. In the guidance we talk about, for example, issues with taking a second opinion where there is a greater degree of uncertainty, and the importance of doctors keeping up with the latest clinical knowledge on the efficacy of different treatment courses to come to that determination. We would agree that there is inevitably a degree of uncertainty in the central ground that the chief medical officer was talking about.
As we still have a little time, I will call Kit Malthouse.
Q
Mark Swindells: I do not believe that we use the word “refer”, but I will double check. The word “referral”—this is part of the BMA’s position—has a particular meaning in the world of medicine. We talk about the importance, from a patient perspective, of not being left with nowhere to go, so there is some professional responsibility on the doctor to guide.
Q
Dr Green: We would expect that to be done with sensitivity.
Right, so professional judgment again—
Order. We have come to an end, but you may complete your sentence, Dr Green.
Dr Green: That was my complete sentence.
Excellent. That was perfectly timed.
That brings this session to a close. On behalf of the Committee, I thank the witnesses: Mark Swindells, assistant director of standards and guidance at the General Medical Council, and Dr Andrew Green, chair of the medical ethics committee at the British Medical Association.
Examination of Witnesses Glyn Berry and Professor Nicola Ranger gave evidence.
We will now hear oral evidence from Glyn Berry, via Zoom—hello and welcome—and from Professor Nicola Ranger. We have until 11.25 am. Will the witnesses please introduce themselves?
Glyn Berry: Good morning. My name is Glyn Berry. I am a palliative care social worker and a lead allied health professional. I am co chair of the Association of Palliative Care Social Workers.
Professor Ranger: I am Professor Nicola Ranger, chief exec and general secretary of the Royal College of Nursing. Previously, I was a chief nurse in acute hospitals for 10 years.
Q
Can you elaborate on why you say that?
Glyn Berry: Yes. As experienced social workers, working within the realms of a society that is quite often split into “have” and “not have”, we already see the despair and the difficulties that people encounter with inequitable care in palliative care services. We know that a lot of services are delivered by charities as well as statutory agencies and the trusts, and we know that the funding for palliative and end of life care is a real issue and has been heading that way for some years.
We would hate to see what has been happening in other countries in which assisted dying is already in place, where people feel that they have no option other than to apply for assisted dying, because they do not know what else might be out there for them. That is the role of a social worker when we work with our patients: we look at the bigger picture, not just at what is happening clinically. Obviously we depend hugely on our clinical colleagues and expertise, but our specialism, if you like, is to look at what else is out there for a patient—and for their family and friends, because they are as much a part of the patient’s journey as the patient themselves.
We also know that palliative and end of life care is hit and miss in terms of what people can access. Marie Curie reporting in 2024 showed that there are massive disparities in terms of better care for people at end of life or with a palliative condition, and they have a significant effect. What we say to people is that we will help them to live as long as they can as well as they can in palliative and end of life care situations, but that is really difficult when the resources are not there and things become a huge priority.
Q
Order. We are going slightly off topic, so could we have a brief answer?
Glyn Berry: It would be something that is equitable for everybody. At this moment in time, it is not. As I say, some people get it and some people do not. A sustainable model would give fair access to everybody.
Q
Glyn Berry: We work very closely with clinicians and other health professionals. We talk about a multidisciplinary approach, because a person is not just two dimensional; everything about their life needs the input of others in these situations. As social workers, our expertise and strength is in being able to ask difficult questions and really dig into people’s thoughts, feelings and opinions, giving them an opportunity to say things that sometimes they have never said in a whole lifetime. Other areas are around assessing capacity and giving people the option of knowing that there is not just one way of doing things.
I have worked in a hospice setting for the last six or seven years. I see daily how social workers contribute to the wider MD team in terms of safeguarding, capacity and applications for deprivation of liberty, but we also do the psychosocial aspect of palliative and end of life care. We sit and talk with patients, we do advance care planning and we deal with practical aspects such as supporting the arrangement of funerals. For families in which the parent or primary caregiver is the person who is ill, we will work with external statutory agencies like local authorities to give support where there may be children or vulnerable adults who are being cared for by the patient, to have provision put in place for after the death of the person. We also provide pre bereavement support for both the patient and the family, and post bereavement support for the family.
We have quite an extensive skills catalogue to support patients and families, but one of our biggest skills we have is in communication and in not being afraid to go where other professionals may feel uncomfortable going. Having conversations about people wishing to end their life is not a new thing: we have those conversations quite regularly.
Q
Glyn Berry: In our association, we have a list of recommendations. We are very conscious that the Bill is very heavy from a clinical perspective. There are a number of things. We do not feel that the decision and assessment should be all on the shoulders of a health professional, the clinician. Some clinicians are fantastic with assessing capacity and being aware of the safeguarding aspects of situations, but not all are, and we feel that our expertise lies in that particular area.
When we look at the overview of the process set out in the Bill, it is very, very clinical. Nowhere does it talk about the clinician exploring the other aspects of a person’s life; it is very much around the clinical aspect, and quite rightly so, because these are experienced clinicians. We feel that we should be involved in these decisions from the capacity and safeguarding aspect, but also in seeing whether there are things we can do to help the person make a more informed choice. If their decision to take their life is based on the fact that they do not have secure housing, that their benefits or finances are all over the place, that they do not want to be a burden on their friends or family, or indeed that they have nobody at all, those are areas that are very familiar to us in our daily practice. We therefore feel that we are well placed to support the clinicians in the whole process.
That was a really comprehensive answer. I think the key point that you touched on is the multidisciplinary approach.
Q
Professor Ranger: I think there is something really important about having a big difference in the beginning with regard to palliative care and assisted dying, and pain management. It is essential that those two things are slightly separated, because it would be heartbreaking to think that pain management was the primary reason that someone wanted to be assisted to die. We should be able to control and support someone’s symptoms and pain.
I think the primary thing with regard to being referred to another organisation is autonomy. I absolutely agree with what was said earlier: you would want anyone who is considering assisted dying to be slightly separated out of their normal clinical pathway, so it is not part of mainstream care for someone in a hospital or an organisation. There is something really important about separating that out, both in the discussions around the decision making and in any care involved in assisting them to die. I think those two things do need to be separated.
Q
Professor Ranger: Well, you would not really want any clinician to push this view on any patient. It has to come from the person themselves. That is the key thing around capacity and autonomy. I do not think that people should ever say to a patient or an individual, “Is this something you have considered?” It has to be led by the patient.
Q
Professor Ranger: It is vital that any of those barriers be removed and that we always maintain outstanding care at the end of someone’s life. The reality is that the majority of palliative care is given by nursing staff, whether it is in the community, in someone’s home, in a hospice or in a hospital. It is key that it be an expertise and a specialist practice in which someone has extra training and extra education. The skills of listening to patients, advocating for them and ensuring that they are pain free at the end of their life—these are skills that nurses have now, and it is vital that our nursing members maintain them. They are often the one a patient will speak to at 3 in the morning when no one is there.
As Glyn said, it is vital that the wider team be included in the Bill. The Bill talks about the guidance and recommendations being for the chief medical officer, but I think it is absolutely vital that the chief nursing officer be a key part of the guidance and the drawing up of any care, because even in these circumstances it is nursing staff who will give the majority of the care.
Q
Professor Ranger: Safeguarding is part of our professional responsibility now. Whether it is for a child, an adult or an elderly person, part of our role is to be vigilant against financial misconduct, physical abuse and mental health abuse: any of those things is a responsibility of every nurse now. It is a very good and simple process. You do not have to investigate or give a judgment; you need to refer it to be investigated. That takes the pressure off an individual clinician. Our job is to be vigilant and to refer safeguarding anywhere we think that there is any form of abuse. I think that that process would remain and could be part of how we do things now.
Q
Professor Ranger: We would want more support. I am not going to say that we always get it right. Sometimes things happen that we miss and we do not report. I cannot say that we get it right 100% of the time. When the Bill talks about education and training for medical staff, it is absolutely vital that nursing staff are included because we will need to be vigilant around anyone feeling they are a burden.
The Bill would add other skills that we want to make sure that nurses are included in. Education for medical staff is absolutely pertinent for nursing staff, so that nurses build on skills they already have. There will be a difference between the care of someone wanting assisted dying and palliative care. Those are two slightly different skills and it is really important that they are not always lumped together. Being involved in assisted dying will require a specialist skill and specialist training, and we would very much want nursing to be included within that.
Q
Professor Ranger: I do. They are professionals, and I believe they would be able to.
Q
Secondly, what level of training would that person need in terms of time? We have, for example, been talking about a two year process. If this new role came into effect, how long would that person need to be trained for to fulfil it adequately? Thirdly, do you have a sense of how many of these professionals we would need to make this a functioning system? Those are three separate questions.
Glyn Berry: To answer the first question, we feel, for the reasons I outlined earlier, that the role of an approved palliative care professional would sit beside the role of clinicians, balancing clinical and social observation and assessment.
In terms of the training, we, as social workers, already have continuous training opportunities to become best interests assessors, practice educators and approved mental health practitioners, so we envisage that the training would very much be along those lines. Doing those roles currently requires a course of training at university.
Our thoughts, at the moment, are that that would be for palliative care social workers, whether they are in charities, trusts or local authorities, or are independent, because that is where things sit with us at the moment and we know our roles. We like to think that it would roll out to other professionals, however, because assessing capacity is not specifically the role of the social worker; other professionals are able to, and do, complete capacity assessments.
It is quite difficult to answer your question in terms of numbers at the moment. If we were talking specifically about palliative care social workers, we currently have around 200 members in our association, but there will be other people out there who are not members and we do not know who they are. It is a role that could expand.
One of our other recommendations is that palliative and end of life care, as an aside to your question, is also brought into qualifying roles for people in training, such as doctors, nurses and allied health professionals, as well as social workers. We could see that happening in the future.
Q
I want to ask a bit more about what this end of life conversation looks like in your experience, because you are absolutely right; of all the people who are spending time with patients in their last few months of life, it is often nurses and palliative care social workers. You have a really important role to play.
I am also interested in what this would look like in reality. There has been talk of a kind of separation of palliative care and assisted dying, but, actually, I think we should be looking to embrace a holistic approach to end of life conversations and end of life care, which is what has happened in other jurisdictions. You might have a patient who has signed up for assisted dying but never does it because they have good palliative care and they work with their palliative care experts and specialists. Therefore, I think it is important that we do not try to separate these things.
I would like your views on that, but I think that one of the strengths is that having these conversations about death, about dying and about end of life is a really positive thing. Your members have an important role to play in that, so could you talk a little bit about the holistic approach that your members take?
Professor Ranger: You are right regarding the conversations and the care around dying. Having those conversations with people around pain management and symptom management is particularly the role of palliative care nurses. With assisted dying, I think the conversation is sometimes slightly different. It is talking more as a nurse in some ways, because the primary reason that assisted dying is often a discussion is a lack of autonomy, not pain. Therefore, the conversation generally tends to go in a slightly different way.
Symptom control, and being scared of pain, is understandable, and we absolutely have the ability to get that right for people, but when it comes to seeking assisted dying, the primary reason is usually autonomy, rather than pain and fear of dying. Therefore, in a practical way, I think an experienced nurse or doctor will start to gauge the difference in those conversations, because they are different. I think it is about being really clear around those conversations and really listening to what people have to say, and then having a way to be able to ensure that what an individual wants is something that you have got, and that you listen to.
I absolutely agree with Glyn about safeguards and all the things that we absolutely need to make sure are there, but the whole point of assisted dying is not to be paternalistic, but to respect autonomy. Whatever safeguards we put in with that, we have to be really careful not to ignore that right of autonomy, which is primarily what this Bill is trying to preserve.
I think it is about being really vigilant and listening. A primary role of a nurse is not to advocate their personal view, but to really listen to somebody else and to ensure that what they want is pursued. In all that discussion, it is really important that that does not get lost.
Q
Order. Is there a question there?
Yes. It sounds as though you are saying that your professionals are trained to have those conversations, which is very reassuring. Glyn, do you want to add anything?
Glyn Berry: Just to say that I absolutely agree with Professor Ranger. My experience of working with palliative nurses, and nurses in general, is long, and I have historically had exceptionally positive experiences and continue to do so. I think that we learn from each other, and it is really important that we can have those conversations with the person and ask questions that they might never have been asked before, such as, “What is it that you want?”
Professor Ranger is absolutely right in terms of autonomy and the person having control, because once that diagnosis is given, it can be a downward spiral for a person and they feel that they lose control. Patients and families talk about that—about having no control over what is happening. In effect, that is true in terms of what is happening in the disease or illness trajectory, but it is so important to remind a person that they are still the person that they were before that diagnosis, that they will continue to be that person, and that they still have a voice. In both our roles professionally, and alongside other clinicians, that is what we seek to do all the time. That is why a multidisciplinary team approach is so important.
Ultimately, we could find that, once you have asked all the appropriate questions and you have put potential safeguards in place following conversations, a person may not choose that particular point to end their life—as you mentioned, Kim—and may continue to live to the end of their natural life.
Q
Professor Ranger: Yes, we would want to see more support and protection for nurses. Of course, in the exploring of assisted dying legislation in Scotland, the second clinical decision maker is a nurse—so it a doctor and a nurse, whereas in England and Wales we are looking at two medically qualified practitioners. We absolutely want to make sure that the skills and support is there for nursing staff, and the ability—as I heard our medical colleagues saying—to not be involved in assisted dying absolutely has to be supported. It cannot be an expectation of the role; it has to be something you choose to proactively take part in as a conscious decision. It cannot ever be just an expectation of a nurse. We are absolutely adamant about that. The Bill cannot just support the needs of medical staff—nursing absolutely has to be included within that, both in skills and support.
Q
Professor Ranger: It is difficult. If I am honest, we have probably not explored that enough within our thinking as a college. We know what we would not want to see, which is a situation where there is an expectation that it becomes part of a pathway. It has got to be something you actively seek and opt into. I think how that is administered probably requires more thought, if I am honest, but I would not want to see it becoming an expectation of a pathway, because then the pressure on the individual may change. That is something we need to safeguard against.
I am worried that we should not make it so bureaucratic for the individual that it becomes impossible to have their autonomy respected, but how that happens is something that needs further exploration. We would fully support making it as clear and unbureaucratic for the person as humanly possible. But we would not want to see it as a sort of pathway within our current setting, because there could then be a sense that this is something that is externally influenced rather than being something that someone actively seeks for their autonomy.
Q
Professor Ranger: It is difficult, but in my experience there are ways to try and get people palliative care, whether that is, as was said earlier, via other organisations outside the NHS and within hospice care. There are ways through the current routes to get people the care that they need.
Q
Professor Ranger: I do not think it is as good as it needs to be. We know that it is sometimes hard for people to access care. We know the struggles regarding hospices. We know far too many people die in hospital. We know there are real challenges in social care and the health service. I cannot say it is not without challenge.
Q
Professor Ranger: When you put it like that, it could be possible, but we would want to strive to have a system that does not leave anyone in distress.
Q
Do you think—I cannot decide for myself what the answer is—it should be possible for a care home director to exempt their whole service, that care home and the people who work in that care home, from being involved in assisted dying? That is where people live, after all. If somebody is having it there, it could affect the entire atmosphere of the place, and the work that all of the people there have to do. Do you think they should be protected as an organisation?
Professor Ranger: Particularly for nursing homes, I think that would be difficult. How and where people end their life probably needs further thought and further explanation. There is something about being really clear— if you are the leader of that nursing home, we would have to explore your ability to be able to advocate for the care that you want to be able to give in that nursing home. All of these practical things need further exploration.
It is difficult, because for someone who wants to end their life, if that is their home, they may want to be there. It is all of these practical things that probably need further thought and exploration, because I think it could be argued either way.
Q
Glyn Berry: I do not think so. I think that the last question around care homes was a really good one. I am already thinking about the implications for registrations with the Care Quality Commission and what that would mean in terms of the process and the protection of staff, residents and families. It is a really helpful question to think about.
That brings us to the end of the time allocated for the Committee to ask any questions. I thank our witnesses on behalf of the Committee, Glyn Berry, co chair of the Association of Palliative Care Social Workers, who appeared via Zoom, and Professor Nicola Ranger, chief executive and general secretary of the Royal College of Nursing. Thank you all very much indeed.
The Chair adjourned the Committee without Question put (Standing Order No. 88).
Adjourned till this day at Two o’clock.
The Committee consisted of the following Members:
Chairs: † David Mundell, Valerie Vaz
† Ballinger, Alex (Halesowen) (Lab)
† Blake, Rachel (Cities of London and Westminster) (Lab/Co op)
† Caliskan, Nesil (Barking) (Lab)
† Cross, Harriet (Gordon and Buchan) (Con)
† Davies, Gareth (Grantham and Bourne) (Con)
† Kohler, Mr Paul (Wimbledon) (LD)
† MacDonald, Mr Angus (Inverness, Skye and West Ross shire) (LD)
† Murray, James (Exchequer Secretary to the Treasury)
† Osborne, Tristan (Chatham and Aylesford) (Lab)
† Poynton, Gregor (Livingston) (Lab)
Reynolds, Emma (Economic Secretary to the Treasury)
† Ryan, Oliver (Burnley) (Lab/Co op)
† Stephenson, Blake (Mid Bedfordshire) (Con)
† Strathern, Alistair (Hitchin) (Lab)
† Wakeford, Christian (Bury South) (Lab)
† Wild, James (North West Norfolk) (Con)
† Yang, Yuan (Earley and Woodley) (Lab)
Lynn Gardner, Kevin Maddison, Committee Clerks
† attended the Committee
Public Bill Committee
Tuesday 28 January 2025
[David Mundell in the Chair]
Finance Bill
(Except clauses 7 to 12, schedules 1 and 2, clauses 15 to 18, schedule 3, clauses 47 to 53 and any new clauses or new schedules relating to the subject matter of those clauses and schedules.)
Will everyone please ensure that all electronic devices are turned off or switched to silent mode? Tea and coffee are not allowed in the Public Bill Committee.
We are here today for line by line consideration of the Finance Bill. The selection list for today’s sitting is available in the room and on the parliamentary website. It shows how the clauses, schedules and selected amendments have been grouped together for debate. A Member who has put their name to the lead amendment in a group is called first. In the case of a Government amendment or stand part debate, the Minister will be called to speak first. Other Members are then free to indicate that they wish to speak in the debate by bobbing.
At the end of the debate on a group of amendments, new clauses and schedules, I shall call the Member who moved the lead amendment or new clause again. Before they sit down, they will need to indicate whether they wish to withdraw it or to seek a decision. If any Member wishes to press to a vote any other amendment in a group, including grouped new clauses and new schedules, they need to let me know.
Ordered, That— 1. the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 28 January) meet— (a) at 2.00 pm on Tuesday 28 January; (b) at 11:30 am and 2.00 pm on Thursday 30 January; (c) at 9.25 am and 2.00 pm on Tuesday 4 February; 2. the proceedings shall be taken in the following order: Clauses 1 to 6; Clauses 13 and 14; Clause 19; Schedule 4; Clauses 20 to 25; Schedule 5; Clauses 26 to 31; Schedule 6; Clauses 32 to 35; Schedule 7; Clauses 36 to 38; Schedule 8; Clauses 39 and 40; Schedule 9; Clause 41; Schedule 10; Clause 42; Schedule 11; Clause 43; Schedule 12; Clauses 44 to 46; Schedule 13; Clauses 54 to 86; any new Clauses or new Schedules relating to the subject matter of those Clauses or those Schedules; remaining proceedings on the Bill.—(James Murray.) Resolved, That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(James Murray.)
Copies of the written evidence that the Committee receives will be made available in the Committee Room.
I remind Members about the rules on declarations of interest as set out in the code of conduct. Does any Member wish to declare any interests? No. Then let us begin.
Clause 1 Income tax charge for tax year 2025-26 Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss the following: Clauses 2 to 4 stand part.
New clause 3.
It is a pleasure to serve on the Committee with you as the Chair, Mr Mundell. Clauses 1 to 3 impose a charge to and set the rates of income tax for 2025-26, and clause 4 maintains the starting rate for savings limit at its current level of £5,000 for the ’25-26 tax year.
Income tax is the largest source of Government revenue and helps to fund the UK’s schools, hospitals and defence, and other public services that we all rely on. In ’25-26, it is expected to raise around £329 billion. The starting rate for savings applies to the taxable savings income of individuals with low earned incomes of less than £17,570, allowing them to benefit from up to £5,000 of income from savings interest before they pay tax. It specifically supports those taxpayers with low levels of earned income.
As Committee members will be aware, both the income tax rates and the starting rate limits for savings must be legislated for each year. The Bill will not change the rates of income tax. We are confirming that they will remain the same, thereby meeting our manifesto commitment not to increase the basic, higher or additional rates of income tax.
Clause 1 imposes a charge to income tax for the year ’25-26. Clause 2 sets the main rates of income tax, namely the basic rate of 20%, the higher rate of 40% and the additional rate of 45%. These will apply to non savings, non dividend income of taxpayers in England and Northern Ireland. Income rates in Scotland and Wales are set by their respective Parliaments.
Clause 3 sets the default rates at the same levels as the main rates, namely 20%, 40% and 45%. These rates apply to the non savings, non dividend income of taxpayers who are not subject to the main rates of income tax, Welsh rates of income tax or Scottish rates of income tax. For example, they might apply to non UK resident individuals. The clause also sets the savings rates of income tax—again at 20%, 40% and 45%.
Clause 4 will maintain the starting rate limit at its current level of £5,000 for the ’25-26 tax year. The limit is being held at this level to ensure fairness in the tax system while maintaining a generous tax relief. In addition to the starting rate for savings, whereby eligible individuals can earn up to £5,000 in savings income free of tax, savers are also supported by the personal savings allowance, which provides up to £1,000 of tax free savings income for basic rate taxpayers. Savers can also continue to benefit from the annual individual savings account allowance of £20,000. Taken together, as a result of these generous measures, around 85% of savers will pay no tax on their savings income.
Finally, I should mention the Government’s efforts to encourage those on the lowest incomes to save through the help to save scheme. We recently extended the scheme until 5 April 2027, and we have extended the eligibility to all universal credit claimants who are in work from 6 April 2025. I encourage Committee members to do what they can to promote the scheme to their constituents.
New clause 3 would require a review of how many people who receive the new state pension at the full rate are liable to pay income tax this year and in the next four tax years, and specifically what the tax liability of their state pension income will be. The Government consider the new clause to be unnecessary, given the information that is already publicly available.
His Majesty’s Revenue and Customs has published statistics for this tax year and past tax years that cover the number of income taxpayers, including breakdowns by marginal rate, tax, band and age, and the Department for Work and Pensions has published figures for pensioners’ average incomes. The Office for Budget Responsibility is the Government’s independent economic forecaster and most recently published projections of the number of income taxpayers for future years in its “Economic and fiscal outlook” at autumn Budget. Those projections include a breakdown by marginal rate.
Income tax is a vital revenue stream for our public services and the clauses will ensure that that remains the case in 2025-26, while also retaining the starting rate of savings at its very generous existing value. I therefore commend clauses 1 to 4 to the Committee, and I urge the Committee to reject new clause 3.
It is a great pleasure to see you in the Chair, Mr Mundell. This is one of many Finance Bill Committees that I have participated in. The subjects have changed somewhat each time, but something has remained consistent: the presence of the hon. Member for Ealing North. It is a pleasure to see him in his place, and I hope that his experience as the Treasury Minister in a Finance Bill Committee is as unpleasurable as mine when I was facing him.
As the Minister rightly set out, clause 1 imposes a charge to income tax for the year 2025-26, which is a formality. Clause 2 sets the main rates of income tax in England and Northern Ireland for 2025-26—the 20% basic rate, the 40% higher rate and the 45% additional rate—leaving them unchanged. Clause 3 sets the default rate and savings rate of income tax for the tax year 2025-26 for the whole of the United Kingdom. Clause 4 freezes the starting rate limit for savings at £5,000.
Of course, the Government’s big announcement on income tax in the Budget was that they would not extend the freeze to income tax thresholds beyond April 2028. Committee members will be aware that that announcement does not need to be legislated for, as the income tax personal allowance and the basic rate limit are subject to consumer prices index indexation by default, unless Parliament overrides that via a Finance Bill, and Parliament has not overridden indexation beyond the 2027-28 tax year.
As the current legislative framework did not allow the Government to enact their announcement on income tax thresholds at the Budget, we must take them at their word that they will keep their promise and not succumb to the temptation to override the thresholds in future. Given the possibility that rising borrowing costs have eliminated the Chancellor’s headroom under the Government’s own stability rule, I would be grateful if the Minister could reconfirm that they will allow CPI indexation to resume from 2028-29 and that they will not renege on that promise.
On a point of clarity, I would be grateful if the Minister could confirm whether the unfreezing of income tax thresholds in 2028-29 will involve an increase to the fixed portion of the income tax higher limit, which he will be aware of. The limit is set at £100,000 plus twice the personal allowance, and that £100,000 is not indexed to CPI by default. Should we expect the additional rate to rise only in so far as the personal allowance rises, or will that £100,000 be unfrozen too? I would appreciate an explanation on that.
I leave it to others to interpret what it says about this Labour Government and Budget that a non binding commitment merely not to raise some tax thresholds in three years’ time is presented as a big win for the British taxpayer. On income tax, as with most of the Government’s more positive policy announcements, the benefits are prospective and entirely speculative.
Meanwhile the pain, as we have seen with national insurance contributions and in other areas, is very much immediate and certain. Pensioners left out in the cold by the Government this winter will recognise that all too familiar pattern. A pensioner who receives the full rate of the new state pension without additional income—whose income from April is roughly £12,000—is now in most cases no longer receiving the winter fuel payment. The Government have defended that decision by referring to the triple lock.
Will the Minister update the Committee on when the Government now project the full rate of the new state pension to exceed the income tax personal allowance, and how many pensioners they expect will be newly taken into income tax as a result of the development? If he cannot tell the Committee, perhaps he and his colleagues will vote in favour of new clause 3, which would require the Treasury to produce and publish forward projections for the number of people receiving the full rate of the new state pension who are liable to pay income tax, and specifically what the tax liability of their state pension income will be.
Pensioners cannot easily alter their financial circumstances, yet they were given less than six months’ notice of the withdrawal of the winter fuel allowance. They must not be blindsided for a second time by the taxman—especially not those who are just about getting by without additional income beyond the state pension. I urge Members and the Minister to vote for new clause 3 to prevent that from happening.
I thank the shadow Minister for the comments at the beginning of his speech, if not for all the questions subsequently. First, on the question about whether the £100,000 threshold will be unfrozen in due course, that threshold does not move, and it sets the personal allowance taper beyond that level.
The shadow Minister asked broader questions about the personal allowance and our decision to change the policy we inherited from the previous Government. In the many Finance Bill Committees that he and I served on before the general election, the personal allowance would routinely be frozen for more and more years into the future. That is what we have inherited: the personal allowance is frozen up until April 2028. We made clear that we would do things differently. As well as not increasing the basic higher and additional rates of income tax, as we set out, we did not freeze the personal allowance beyond April 2028, which means that it will continue to rise with inflation.
The shadow Minister asked specific questions about how the change affects pensioners, and referred to new clause 3, which I addressed earlier. I will repeat what I said: new clause 3 is not necessary because the data the shadow Minister requests is already in the public domain. We need to ensure that as the personal allowance begins to rise from April 2028, that will benefit not just people in work but pensioners, because they will see the personal allowance that applies to their pension income rising as well. That is underlined by the fact that we are maintaining the triple lock, which will see generous increases in the state pension as the bedrock of state support for pensioners.
Question put and agreed to. Clause 1 accordingly ordered to stand part of the Bill. Clauses 2 to 4 ordered to stand part of the Bill. Clause 5 Appropriate percentage for cars: tax year 2028-29 Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss clause 6 stand part.
Clauses 5 and 6 make changes to ensure long term certainty on company car tax by setting the rates for 2028-29 and 2029-30. The increases in the appropriate percentages will help to ensure that the tax system contributes to supporting the sustainability of the public finances. The effect of the clauses is to gradually narrow the differential between zero emission and electric vehicles and their petrol and diesel counterparts, while ensuring that significant incentives to support the take up of EVs remain in place. The provisions also increase rates for hybrid vehicles.
Company car tax applies when a company car is made available to an employee or their family member for private use. Company car tax rates were confirmed by the previous Government up until 2027-28. In the 2024 autumn Budget, the Government set out the rates for 2028-29 and 2029-30, to provide certainty.
The Government recognise that the company car tax regime continues to play an important role in the EV transition by supporting the take up of EVs and their entry into the second hand car market. Although it is important to maintain strong incentives to encourage the take up of EVs, the Government need to balance that against the responsible management of the public finances by gradually withdrawing them over time, as EVs become more normalised. That is why we have committed to raising the company car tax rates—or appropriate percentages—for EVs, hybrids, and petrol and diesel vehicles in 2028-29 and 2029-30, gradually narrowing the differential between EVs and other vehicle types, and bringing the treatment of hybrids closer to that of petrol and diesel cars.
The changes made by clauses 5 and 6 will set the company car tax appropriate percentages for the tax years 2028-29 and 2029-30. Appropriate percentages for EVs will rise by two percentage points per year, rising to 9% by 2029-30. Meanwhile, the appropriate percentages for cars with emissions of 51 grams of carbon dioxide per kilometre or over will rise by one percentage point per annum. By 2029-30, the appropriate percentages for petrol and diesel cars will rise to between 20% and 39%, depending on the car’s specific emissions. Together, the measures will gradually narrow the gap between EVs and their petrol and diesel counterparts, while maintaining a generous incentive for EVs.
On the changes to the hybrid appropriate percentages, I draw the Committee’s attention to recent research from the European Commission that has shown that the real world emissions of hybrid vehicles are in fact three and a half times higher than previously thought. Consequently, the Government have announced that they will align the treatment of hybrids more closely with that of petrol and diesel cars.
On aligning hybrid cars more closely with petrol and diesel cars, what assessment has been made of the impact on the hybrid car market and the take up of hybrid cars, if we are ultimately looking to move away from petrol and diesel in the long term?
Over the coming years we need to make the transition to electric vehicles. Hybrid cars obviously play an important part in the car market and car manufacturing in the UK. The clauses are about a plan over the next five years or so regarding what will happen to the appropriate percentages. This is not an overnight change. Actually, one of the important principles of our setting out the appropriate percentages now for some years in advance is to give car manufacturers and everyone interested in the car industry certainty about what will happen. That is why, as I have been setting out, the appropriate percentages for EVs will rise, thereby narrowing the gap between them and petrol and diesel vehicles, but there will still be a generous incentive to help to shift people towards purchasing EVs.
Hybrid vehicles obviously fit within the general scheme of appropriate percentages. However, as I was setting out, European Commission research shows that emissions from hybrid vehicles are in fact three and a half times higher than previously thought, so in setting the rates for 2028-29 and 2029-30, we have decided to reflect that fact in the appropriate percentages that we are legislating for. That means all cars with emissions between 1 gram and 50 grams of carbon dioxide per kilometre—those that largely fall in the hybrid category—will see their appropriate percentages rise to 18% in 2028-29 and to 19% in 2029-30. As I outlined to the hon. Member for Gordon and Buchan, by setting out the rates until 2029-30 we will give the industry and consumers certainty about the future rates.
The company car tax system offers generous incentives to encourage EV take up and makes an important contribution to the EV transition. The Government, however, must balance incentives against responsible management of the public finances. We are announcing the rates for 2028-29 and 2029-30 to start to narrow the differentials between EVs, hybrids, and petrol and diesel vehicles. I therefore commend clauses 5 and 6 to the Committee.
As the Minister set out, clauses 5 and 6 set the appropriate percentage used for calculating the taxable benefit for a company car for tax years 2028-29 and 2029-30. In those tax years, the appropriate percentage for EVs will increase by 2% to 7% in 2028-29 and 9% in 2029-30. For most other vehicles, the appropriate percentage will increase by a further 1% in each year, up to a maximum of 39%. Hybrid vehicles are the standout exception. The effect of these clauses for vehicles capable of operating on electric power while producing between 1 gram and 50 grams of CO2 per kilometre is to introduce a steep increase in the appropriate percentage of as much as 13% in 2028-29 to reach 18%, before rising to 19% in 2029-30.
Whereas previously the appropriate percentage for cars with emissions between 1 gram and 50 grams of CO2 per kilometre would rise as the electric range reduced, from 2028-29 that system will be replaced with a single flat rate, regardless of the electric range. That means that hybrid cars with the greatest electric range, which are presumably the least polluting, will see the steepest tax rise. Any distinction between hybrid vehicles will be eliminated for the purposes of these provisions. Indeed, as the explanatory notes make very clear, rates for hybrid vehicles will align more closely with the rates for internal combustion engine vehicles, as the Minister just pointed out.
It will not have escaped Members that these new rates take us to 2030. The Government have confirmed their intention to ban the sale of new petrol and diesel cars by that date. What has not yet been confirmed is the future of hybrid vehicles. The Department for Transport is consulting on which hybrid cars can be sold alongside zero emission models between 2030 and 2035. The Minister, naturally, will not pre empt the outcome of that consultation, but these measures effectively do just that. While the Department for Transport parses the differences between plug in hybrid electric vehicles and hybrid electric vehicles, the Treasury is eliminating that distinction altogether by 2028, let alone by 2030.
Not only that, but the Treasury is effectively lumping all hybrid vehicles in with those powered by internal combustion engines. Treasury Ministers will be aware that the manufacturing of hybrid vehicles and engines supports thousands of British jobs, as my hon. Friend the Member for Gordon and Buchan alluded to, and car manufacturing firms operate on a multi year investment cycle. The contradictions between the Bill and the Department for Transport’s consultation send a less than clear signal, which puts those jobs at risk. I would therefore be grateful if the Minister clarified the Government’s intention in making these changes, especially when the House of Lords Environment and Climate Change Committee has heard that these rates have been the single most effective intervention to date in changing consumer behaviour around different types of vehicles.
I would also be grateful if the Minister outlined what steps the Treasury and HMRC are taking to make the general public aware of these changes. I grant they are quite technical, but they could impose a significant additional tax bill on certain taxpayers with plug in hybrid vehicles. The Chartered Institute of Taxation raised that as a key area of concern, which could confront unsuspecting taxpayers—those seeking to do the right thing by purchasing a less emitting vehicle— with a massive and steep tax rise. A higher rate taxpayer on £51,000 whose company car is a plug in hybrid VW Golf could face an additional tax bill of as much as £1,600 in 2027-28. That strikes me as neither fair nor proportionate.
It has been reported that this Labour Government ordered no fewer than 10 petrol hybrid Jaguars upon assuming office to supplement the existing departmental, chauffeur driven pool cars. If the Minister is confident that the consequences of the changes have been communicated and fully understood, I am sure he will be able to inform the Committee of the extra tax liability in 2028-29 of someone on a salary similar to that of a Treasury Minister—£110,000—whose full time work car is a plug in hybrid Jaguar F Pace valued at roughly £60,000 with an electric range of just under 40 miles.
As the Committee can tell, we have serious reservations about the communication of the changes, the unfair overnight tax hikes they impose on taxpayers just trying to do the right thing, and the mixed messages they send to vehicle manufacturers by contradicting other areas of Government policy and consultation. The measures concern the ’28-29 and ’29-30 tax years, so the Government have time to think again and to bring back a better calibrated policy in a future Finance Bill. For the reasons that I have set out, we will vote against the clauses.
I listened to the shadow Minister’s comments, and he must have a different definition of “overnight” from me. Legislating now for changes that will come in in 2028 does not feel like overnight. Some Budget changes come in on the day of the Budget—had he called one of those overnight, I might have had some sympathy with the description, but not for legislating now for changes that will come in in 2028, toward the end of this decade. Part of the point of legislating now for changes that will happen some years down the line is precisely to give that signal to consumers and manufacturers, to ensure that the consumers are aware of what is to happen and manufacturers know what is planned.
People might be buying cars now—that is, overnight—that they still have in ’28-29, when the changes come in. They will be making decisions now that will be caught up in future changes.
The hon. Lady makes a similar point to that made by the hon. Member for Grantham and Bourne, which is that the changes will come in further down the line, but they are critical of the fact that we are pre announcing the changes now so that we give greater certainty and stability. I cannot understand that criticism, because I thought that giving as much forecasting, certainty and stability as possible would be welcomed by the industry and consumers. People expect taxes to change over time, and the greater the forecasting and advance notice they have, the better for consumers and for manufacturers. Without making this too political, I know that the Opposition were not a great fan of certainty and stability when they were in office, but we are rather different. That is why we are setting out the changes now.
The shadow Minister referred to the DFT consultation, and of course, he is right that I would not pre empt its outcome. In combination, our giving information about what the appropriate percentages will be towards the end of the decade, thereby providing certainty and stability, will help us to work closely with other Departments to ensure that consumers are well informed about what is likely to happen towards the end of the decade and manufacturers have the certainty and stability that were so desperately lacking under the previous Administration.
Question put, That the clause stand part of the Bill.
1|0|10|4|The Committee divided:|Question accordingly agreed to.||0|0
Clause 5 ordered to stand part of the Bill.
Clause 6 ordered to stand part of the Bill.
Clause 13
Charge and main rate for financial year 2026
Question proposed, That the clause stand part of the Bill.
With this it will be convenient to debate clause 14 stand part.
Clause 13 sets the charge for corporation tax for the financial year beginning April 2026, setting the main rate at 25%; and clause 14 sets the small profit rate at 19% for the same period. As Members know, the charge for corporation tax must be set every year, so it is important to legislate on the rate for 2026 now to provide certainty to large and very large companies, which will pay tax in advance on the basis of their estimated tax liabilities. That is also why we have committed to cap corporation tax at 25% for the duration of the Parliament, as set out in the corporate tax road map published at the autumn Budget. The changes made by clause 13 will establish the right of the Government to charge corporation tax from April 2026. The clauses maintain the current rates of 25% and the small profits rate of 19%. Tax certainty is of great importance to businesses, and clauses 13 and 14 ensure that they continue to benefit from stable and predictable tax rules. I commend both clauses to the Committee.
As the Minister set out, clauses 13 and 14 set the charge and rates of corporation tax for financial year 2026. The main rate remains unchanged at 25%, with the standard small profits rate at 19%, and the standard marginal relief fraction remains three 200ths.
In Committee on the last Finance Bill, the Exchequer Secretary to the Treasury, who was then the shadow Financial Secretary to the Treasury—a great Opposition role—told the House that if Labour won the election, they would bring certainty back for businesses by capping the rate of corporation tax at 25% for the whole of the next Parliament. At that point, he spoke of capping corporation tax and publishing a business taxation road map as though they were two separate things.
This year’s Budget makes clear that there is no cap outside the road map, and once again, as with income tax, we must take Labour at their word that they will stick to a non binding commitment, which is not legislated for in this Finance Bill. It is unclear how much certainty or stability such a loose commitment will bring, especially when the Budget blindsided businesses with a £25 billion tax hike. Not only that, but the corporate tax road map itself says that, while the Government are committed to providing stability and predictability in the business tax system, they cannot rule out changes to the corporate tax regime over the course of this Parliament.
Given the Government’s ongoing worries about headroom and the uncertainty and instability that has created, will the Minister reconfirm for the parliamentary record the Government’s commitment, first, not to raise the headline rate of corporation tax for the duration of this Parliament; secondly, not to raise the small profits rate or reduce the marginal relief currently available; and thirdly, to maintain full expensing and the annual investment allowance, as well as writing down allowances and the structures and buildings allowance without meaningfully altering their eligibility?
Less than a year ago, when he was still in opposition, the Exchequer Secretary, tabled an amendment to the last Finance Bill that would have required the Chancellor to assess how the current main rate of corporation tax affects investment decisions taken by businesses and businesses’ certain about future fiscal and market conditions. The amendment would also have required a further assessment of how maintaining the main rate across this Parliament would affect those two factors. Now that the hon. Gentleman is in government, I am sure that he has conducted such an assessment and would be glad to share his findings with the Committee.
The Minister cannot point to the OBR’s forecast, because it makes no comment on the impact of corporation tax on stability and certainty, and the corporation tax road map makes no serious assessment either. The OBR does, though, clearly state that the net impact of budget policies lowers business investment. On that score, even the current rate of corporation tax could be counted as a positive. It is clearly far outweighed by the burden placed on businesses by Labour through other measures, none of which are covered by the corporation tax road map, for it all is worth. As the OBR demonstrates, any distinction between corporation taxes and business taxes is a false one. Its report makes clear that corporate profits—a key driver of corporation tax forecasts—are lower than in our March forecast because the rise in employer NICs raises costs for firms across the country.
We are already seeing the forecasts come to fruition. Following its quarterly survey of chief financial officers, the chief economist at Deloitte said that
“in the wake of the Budget, CFOs have trimmed expectations for corporate investment, discretionary spending and hiring in the next 12 months.”
The Bill lays bare Labour’s rhetoric. On corporation tax, the best offer the Government can make to British businesses is to do nothing, while harming them in lots of other places. All the indications are that they will be back for more, so for the sake of stability and clarity, which have already been so badly shaken in such a short period of time, I hope the Minister will unequivocally rule out any future increases in rates and any reductions in thresholds or allowances.
I was expecting a series of amendments from the Opposition; I was not expecting the shadow Minister to quote back at me an amendment I tabled several years ago. It is a new, although interesting, approach to opposition to rely on what I tabled in opposition and quote that back at me. I am sure it was an excellent amendment, although I cannot remember its exact detail.
On the hon. Gentleman’s questions about corporation tax rates, I am sure he will remember from his time in the Treasury that it is standard practice to legislate the charge to corporation tax on an annual basis, even when the rates remain unchanged. That is a long standing convention that applies to income tax as well. However, because we were so determined to give businesses stability and certainty, we published the corporate tax road map alongside the Budget. In that road map, we made clear our commitment to maintaining the main rate—or, indeed, to capping it—at 25% for the duration of the Parliament.
The small profits rate and marginal relief will also be maintained at their current rates and thresholds. Full expensing and the annual investment allowance are also guaranteed for this Parliament. When it comes to corporation tax, full expensing and the annual investment allowance, the various Finance Bills in this Parliament will be quite a different experience compared with those in the previous Parliament.
Although we of course welcome a road map as a way to give businesses confidence on corporation tax, we should not get mixed up in the smoke and mirrors of what business taxes are. Because of the Budget, businesses now face many taxes and the uncertainty that they bring. Will we also see road maps for things such as the national insurance rises, the increase in business rates, minimum wage increases and measures in the Employment Rights Bill, all of which have an impact on business?
The hon. Lady mentions business rates. I do not know whether she has read the discussion paper “Transforming Business Rates”.
indicated assent.
I am glad the hon. Lady has read it, because it sets out our approach to business rates in the coming year, from April 2026, and what we want to do over this Parliament. Businesses want stability and certainty from Government; they recognise that, over a five year period, things will happen that cannot be predicted on day one, but they want that certainty and predictability. That is why, in the corporate tax road map, we give certainty on capping the main rate and on the small profits rate, marginal relief, full expensing and the annual investment allowance—everything on which we can give full certainty. However, where there are areas that we seek to explore or consult on, we are also clear about that. We developed that approach in partnership with business to make sure that we give as much certainty up front as we can, while also signposting those areas that we want to discuss.
Let us be clear: it is good when a Government set out a tax rate over a multi year period; we accept that that is a good thing. However, does the Minister accept—to the point raised by my hon. Friend the Member for Gordon and Buchan—that although a road map has been set out on corporation tax, the Labour party has created uncertainty by saying, before the election, that it would not increase national insurance contributions and then, immediately after the election, hitting businesses with a £25 billion tax rise, including not only a rate change but a threshold change that brings many new businesses into the tax regime? Does the Minister accept that the problem is about more than corporation tax? It is about the entire business tax ecosystem. On that basis, the charge is very clear: his Government have caused great uncertainty and great damage to British businesses.
Although I am mindful that the clauses are on corporation tax, Mr Mundell, let me briefly respond to the shadow Minister’s comments. This Government were elected to bring an end to the instability that had become endemic under the previous Government. I like the hon. Gentleman a lot, but for him to imply that the previous Government had stability from day to day is for the birds. I was in the House of Commons Chamber so many times for debates on Finance Bills. I think we went through the entire introduction and repeal of the health and social care levy in the space of a few months. There was no stability under the previous Government, and that was a large part of what led people to vote for change at the last general election. They wanted us to sort out the public finances, get public services back on their feet and restore the economic stability that is the bedrock on which investment can rise and on which we can get the economy growing as we know it can, supporting British businesses, entrepreneurs and wealth creators to do what they do best.
To bring us back to the clauses, publishing the corporate tax road map shows our commitment to not just campaigning on the prospect of bringing stability but delivering it in our very first Budget. The corporate tax road map clearly sets out our approach to corporation tax, related allowances and other areas we will look at. I may have discerned support for it in the shadow Minister’s comments; it was bound up in other comments but, reading between the lines, I think he supports the publication of the corporate tax road map. He is welcome to intervene if he disagrees.
I will intervene anyway. As I said, any certainty that can be provided to businesses regarding the tax system is a good thing. The point I am trying to make—I will try again—is that corporation tax is just one tax paid by businesses. They also pay national insurance contributions. They also use reliefs such as the business rates relief the Minister talked about—by the way, the Government have cut that from 70% to 40%, although I am not sure that it was clear before the election that they would do that. The uncertainty has been caused by all the things that the British public were told would not happen, but that then did happen.
We are talking about corporation tax today, and I can see that you are, quite rightly, about to bring us back in scope, Mr Mundell. I will leave it here by saying that British businesses pay more than just corporation tax, and what they need is certainty across the board. We have a corporation tax road map, but why do we not have a holistic, comprehensive business tax road map that includes national insurance, business rates and other taxes borne by businesses? That is my point.
With your indulgence, Mr Mundell, I would like to briefly address—
As long as it is contextual.
Yes. In the context of this discussion on corporation tax, I will address the comments about other taxes. The shadow Minister again mentioned business rates and business rates relief, but he might want to recall the situation we inherited on business rates relief. This year it is operating at a 75% discount for retail, hospitality and leisure properties, up to a cap of £110,000, and it was due to expire entirely in April 2025. What we inherited was not just instability, but a cliff edge—it was going to go entirely in April this year. I notice that that part of the story is conveniently erased from the shadow Minister’s account of history.
Business rates relief was going to expire entirely in April 2025, so we were keen to ensure that we continued it, while being mindful of the public finances. Our decision to continue it for a further year at 40% was the right thing to do while we ensure that we are ready from April 2026 to have permanently lower tax rates for retail, hospitality and leisure businesses with a rateable value of below £500,000. That is the stability that businesses so badly need. Frankly, the shadow Minister, who is talking about business rates in the context of corporation tax, overlooked that fact entirely. Under the previous Government, the reliefs were extended one year at a time, with the rates going up and down, which provided no stability for businesses trying to make investment decisions. From April 2026, with our permanently lower rates, we want to provide exactly that stability.
To return to corporation tax, which is the subject of these two clauses, one of the conversations that I had many a time with businesses while in opposition was about their desire for certainty on corporation tax and the system of allowances. I recall challenging the shadow Minister, when he was a Treasury Minister himself, about the number of changes there had been to full expensing, the annual investment allowance and indeed to the super deduction, which came and went entirely within one Parliament. That instability is what prompted our desire to provide stability for businesses, and publishing the corporation tax road map and these clauses begins to implement the commitments we made.
Question put and agreed to. Clause 13 accordingly ordered to stand part of the Bill. Clause 14 ordered to stand part of the Bill. Clause 19 Pillar Two Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss the following: Government amendments 1 to 3, 21 to 23, 4 to 11, 24 to 29, 12 and 13, 30, 14, and 31 to 37.
Schedule 4.
Clause 19 and schedule 4 introduce the undertaxed profits rule—the third and final part of the internationally agreed global minimum tax known as pillar two. They also amend the existing legislation on multinational top up tax and domestic top up tax to incorporate the latest international agreements and stakeholder feedback.
It is essential that multinationals pay their fair share of tax in the UK. Pillar two protects the UK tax base from large multinationals shifting their profits overseas to low tax jurisdictions, by requiring multinationals that generate annual revenues of more than €750 million to pay an effective tax rate of 15% on their profits in every jurisdiction in which they operate. Where their effective tax rate falls below that, they will pay a top up tax.
More than 135 members of the OECD inclusive framework have signed up to pillar two and agreed that it will achieve that objective through three rules respectively: a domestic minimum tax, the income inclusion rule and the undertaxed profits rule. First, the domestic minimum tax ensures that multinational enterprises operating in the UK will pay at least an effective rate of 15% to the UK and will not be charged pillar two taxes by a foreign jurisdiction.
Secondly, the income inclusion rule, which is known as the multinational top up tax in the UK, means that groups headquartered in the UK but operating in other jurisdictions that do not apply domestic minimum tax, will pay top up tax here in the UK. Thirdly, the undertaxed profits rule, or the UTPR, is a backstop, which means that any top up tax not collected under the first two rules will still be collected. For instance, if a multinational is headquartered in a jurisdiction that has not introduced pillar two, the UTPR implementing countries in which the multinational group operates will share the top up tax between them.
Those three rules together ensure that a group will be subject to pillar two taxes on worldwide activities, as long as it has a presence in at least one implementing country. The OECD expects that to apply to 90% of multinationals in 2025. The UK has already introduced the first two rules and is legislating for the UTPR in the Bill. The staggered introduction is in line with OECD recommendations, and consequently on the same timeline as in many other jurisdictions, and it is intended to help businesses transition into the new regime.
The Government are also legislating for amendments to the UK’s adoption of the income inclusion rule and the domestic minimum tax, which took effect in the UK from 31 December 2023, as they did in a host of countries around the world. Multinational enterprises are preparing to submit their first tax returns and to pay any top up tax due in mid-2026. In their preparations ahead of that, groups have identified elements of the rules that require additional clarification or adjustment—essentially, software updates to the rules. These points are discussed in an international forum, with the UK and more than 135 members of the inclusive framework agreeing solutions. The OECD then publishes guidance that implementing countries may add to their domestic legislation. The Bill incorporates many of those updates that have been agreed multilaterally in the past year and includes clarifications to the existing legislation, in addition to implementing the UTPR.
I will now turn to the changes made by clause 19. The clause details the calculation that groups must use to determine how much top up tax the UK will collect through the new UTPR, which is in proportion to the UK’s share of the assets and employees of the group. Special rules are set out for groups with a joint venture group ringfenced from the ordinary members of the group.
The legislation also includes a simplification known as the UTPR safe harbour, which applies until December 2026. Groups are excluded from the UTPR in the headquarter jurisdiction if the headline tax rate there is at least 20%. In many cases, a group will be subject to the UTPR only in the headquarter jurisdiction, and those jurisdictions may implement a domestic minimum tax by December 2026, in which case the UTPR will no longer apply. The safe harbour prevents groups from having to undertake detailed compliance obligations in relation to the UTPR in the intervening period.
Another simplification measure helps multinational enterprises that are in the earliest phase of their international expansion. It excludes groups from the UTPR for five years if they have a presence in six or fewer territories, with tangible fixed assets of €50 million or less, outside of their primary country.
I will now turn to our amendments to clause 19, which are technical in nature. The most significant are as follows. First, we are introducing an anti arbitrage rule—announced in a ministerial statement last year—that prevents multinationals from entering into avoidance transactions to exploit a temporary simplification in the rules known as the country by country reporting safe harbour. Secondly, we are making an improvement to the domestic minimum tax charging mechanism to ensure that members of a group are allocated the right amount of a group’s top up tax. Thirdly, there are updates to rules on flow through entities, blended controlled foreign company regimes, cross border allocations of tax and the country by country reporting safe harbour, in accordance with the latest OECD guidance. Fourthly, we are enabling HMRC to specify qualifying pillar two taxes by regulation when they have passed the peer review process. The legislation provides that, prior to the completion of the peer review process, groups can assess whether a tax is likely to be qualified, allowing them to prepare their accounts on that basis. Fifthly, there are technical amendments that will take effect for accounting periods beginning after 31 December 2024, except for the anti arbitrage rule, which applies from the date it was announced via written ministerial statement, in March 2024.
Taxpayers can make an election so that a certain group of amendments will apply retrospectively from the introduction of the pillar two taxes on 31 December 2023. The amendments contain some measures that are likely to be helpful to most taxpayers, and others that may not be helpful to all. No taxpayer is forced to accept the retrospective application of a potentially detrimental measure, but taxpayers wishing to secure a retrospective application of measures helpful to them will also have to accept the retrospective application of measures that may not be. If no election is made, the amendments will apply only on a prospective basis. Certain other amendments cannot be detrimental to taxpayers in any circumstances. These are not part of the election and will automatically have retrospective effect from 31 December 2023.
Amendments 1 to 14 and 21 to 23 ensure that the legislation works as intended, by making small corrections to it, as well as two additions to align with the latest internationally agreed advice. The two additions clarify when and how groups need to override values in financial statements when calculating their liabilities and how a group recalculates its pillar two liability in respect of a previous accounting period, meaning that additional tax is due. Amendments 31 to 37 reflect comments received from stakeholders since the publication of the Bill. Collectively, they deliver a less onerous administrative process for groups wishing to elect for certain changes in the Bill to apply retrospectively to them.
In conclusion, clause 19 and schedule 4 introduce the important undertaxed profits rule backstop to pillar two and make technical amendments to existing legislation. I therefore commend them, and Government amendments 1 to 14 and 21 to 37, to the Committee.
It is a great pleasure to serve on the Committee under your chairmanship, Mr Mundell. As we heard from the Minister, clause 19 and schedule 4 amend the parts and schedules of the Finance (No. 2) Act 2023 that implement the multinational top up tax and domestic top up tax. Part 2 of schedule 4 introduces the undertaxed profits rule into UK legislation, and part 3 makes amendments to the multinational top up tax and domestic top up tax. These taxes represent the UK’s adoption of the OECD pillar two global minimum tax rules, and we are supportive of the measures before us.
In October 2021, under an OECD inclusive framework, more than 130 countries agreed to enact a two pillar solution to address the challenges arising from the digitalisation of the economy. Pillar one involves a partial reallocation of taxing rights over the profits of multinationals to the jurisdictions where consumers are located. The detailed rules that will deliver pillar one are still under development by the inclusive framework. As the Minister said, pillar two introduces a global effective tax rate, whereby multinational groups with revenue of more than €750 million are subject to a minimum effective rate of 15% on income arising in low tax jurisdictions.
The multinational and domestic tax top ups were introduced in the Finance Act 2023, as the first tranche of the UK’s implementation of the agreed pillar two framework. Measures in the Bill extend the top up taxes to give effect to the undertaxed profits rule. That brings a share of top up taxes that are not paid under another jurisdiction’s income inclusion rule or domestic top up tax rule into charge in the UK. The undertaxed profits rule will be effective for accounting periods beginning on or after 31 December 2024.
Following discussions with the Chartered Institute of Taxation, I have a number of points to raise with the Minister. First, as the institute points out, there is an open point around the application of the transitional safe harbour anti arbitrage rules. The OECD’s anti arbitrage rules for the transitional safe harbours are drafted very broadly, and may therefore go further than originally anticipated. Will the Minister clarify HMRC’s view of the scope of those rules?
There are also questions about taxpayers’ ability to qualify for the transitional safe harbours. A transitional safe harbour is a temporary measure that reduces the compliance burden for multinationals and tax authorities. There has been some uncertainty as to whether a single error in a country by country report could disqualify all jurisdictions from applying the transitional safe harbours. HMRC has recently indicated that it would be open to permitting re filings of country by country reports where errors are spotted. Can the Minister provide further clarity on HMRC’s proposed approach?
The UK’s legislation will need to be updated regularly to stay in line with the OECD’s evolving guidance. What steps is the Minister taking to ensure that clear guidance is provided in a timely manner? The new top up taxes and undertaxed profits rule are complicated. Schedule 4 runs to over 40 pages and includes an eight step method to determine the proportion of an untaxed amount to be allocated to the UK. It is important that the Government minimise the cost of implementation and compliance. How will the Minister ensure that it is kept to a minimum?
While I welcome the work the UK is doing at a global level, there are still significant issues. I was interested, as I am sure the Minister was, to see that one of the first actions of President Trump, just hours after he took office, was to issue a presidential memorandum stating: “This memorandum recaptures our nation’s sovereignty and economic competitiveness by clarifying that the global tax deal has no force or effect in the United States.”
It states in clear and unambiguous terms: “The Secretary of the Treasury and the Permanent Representative of the United States to the OECD shall notify the OECD that any commitments made by the prior administration on behalf of the United States with respect to the global tax deal have no force or effect within the United States absent an act by the Congress adopting the relevant provisions of the global tax deal.”
The OBR estimates that pillar two is expected to generate £2.8 billion by the end of this Parliament. What impact could the US position have on the future operation of pillar two and the UK’s ability to levy top up taxes on multinationals as planned? The same memorandum issued by President Trump notes that “a list of options for protective measures”
will be drawn up within 60 days. What action are the Government taking to engage with the US Treasury and to prepare for such actions? Has the Chancellor raised this with her opposite number?
The Minister referred to the more than 30 Government amendments that have been tabled to schedule 4, which correct errors in the calculation of the multinational top up tax payable under the UTPR provisions that would have resulted in an excessive liability; secure that eligible payroll costs and eligible asset amounts are allocated from flow through entities in a manner that is consistent with pillar two model rules; and ensure that multinational top up tax and domestic top up tax apply properly in cases involving joint ventures. They are all perfectly sensible, but the number of amendments tabled underlines the complexity of the issue.
As I mentioned, this is a two pillar system. The corporate tax road map confirmed the Government’s support for the international agreement on a multilateral solution under pillar one and the intention to repeal the UK’s digital sales tax when that solution is in place. The digital sales tax raised £380 million in 2021-22, £567 million in 2022-23 and £678 million in 2023-24. I would welcome an update from the Minister on pillar one and the future of the digital sales tax.
The Opposition will not be opposing the clause, but I look forward to the Minister’s response to the specific points I have raised, including those on developments under the new Trump Administration and on implementation.
I thank the shadow Minister for his support for the provisions before us and our general approach.
First, it is the case that we are amending the Bill in Committee, but that is because, as his colleagues may remember from their time in government, these are complex rules and it is important that pillar two rules work as intended. This is a complex international agreement and it represents one of the most significant reforms of international taxation for a century. It is to a degree inevitable that revisions would be needed as countries and businesses introduce pillar two and set it in progress. It is complex, but we should not forget that pillar two applies only to large multinational businesses, and the reason it is being introduced is to stop those businesses shifting their profits to low tax jurisdictions and not paying their fair share here in the UK. The rules need to respond to that, and we need to make sure that they work for all sectors and all types of businesses.
The shadow Minister is right that, although we are talking about pillar two, there is of course a pillar one as part of this package. The Government are committed to implementing both pillars. In pillar one, there is amount A and amount B. Amount A reallocates taxing rights over part of the residual profits of the largest and most profitable multinationals. That has been substantively agreed. A small number of jurisdictions have issues with amount B, which looks to simplify aspects of transfer pricing for baseline distribution. The Government are hopeful that those issues can be quickly resolved to allow the pillar one package to be delivered. He will know that the Government maintain the commitment to cease the digital services tax once pillar one comes into play.
The shadow Minister asked about safe harbour anti arbitrage rule. We acknowledge that the rule is imperfect and applies in cases where we would prefer it did not. It reflects an internationally agreed position and any failure to implement it faithfully could have prejudiced recognition of the UK’s taxes as qualified, with serious detrimental effects. That having been said, the rule is not a taxing provision. It limits the availability of an administrative easement, the safe harbour, rather than charging tax. It was introduced to combat structures that would have allowed groups to qualify for safe harbour status in jurisdictions with very low tax rates, which would have been a material threat to the integrity of the pillar two project. In that context, we do not think it was unreasonable for the drafting to err on the side of breadth. If the opportunity arises, though, it is our intention to seek agreement to improve the rule in the light of the extensive stakeholder comment that it has drawn.
The shadow Minister also asked about errors with country reporting. I reassure him that we are committed to simplifying the rules. HMRC will seek to apply the rules in accordance with the information given out through the OECD model rules and proportionately, wherever possible within the law.
Finally, the shadow Minister asked about the international context. I will not give a running commentary, but it is worth saying that pillar two is—I am sure he would agree—a historic and important initiative in countering multinational base erosion and profit shifting, and it helps to ensure a fair approach to how countries compete for cross border investment. It has been agreed by 140 countries and has been implemented or is in the process of being implemented by the UK, the EU member states, Canada, Australia, Japan, New Zealand, South Korea and more. The UK will, of course, be open to discussing concerns and ways to alleviate them that uphold the policy aims of pillar two and can be supported by all members of the inclusive framework.
Question put and agreed to.
Clause 19 accordingly ordered to stand part of the Bill.
Schedule 4
Pillar two
Amendments made: 1, in schedule 4, page 125, line 28, leave out “untaxed amount” and insert “UK proportion”.
This amendment corrects an error in the calculation of multinational top up tax payable under the UTPR provisions that would have resulted in an excessive liability.
Amendment 2, in schedule 4, page 125, line 30, leave out “untaxed amount” and insert “UK proportion”.
This amendment corrects an error in the calculation of multinational top up tax payable under the UTPR provisions that would have resulted in an excessive liability.
Amendment 3, in schedule 4, page 133, line 20, at end insert—
“Use of substituted values
11A (1) After section 137 insert—
“137A Use of substituted values
(1) Where any provision of this Part requires the substitution of a value recorded in the underlying profits accounts of a member of a multinational group for an accounting period, the substituted value—
(a) is to be used for all purposes of this Part instead of the value recorded in the accounts (for example, where the carrying value of an asset has been substituted and the value of that asset is relevant to the member’s deferred tax expense, that substituted value is to be used in connection with determining that expense), and
(b) is to be updated (for example, in making adjustments for depreciation for subsequent accounting periods),
in each case, in accordance with the accounting standard used in determining the underlying profits of the member.
(2) But where the value in question is the value of an asset, no adjustments for impairment are to be made to it.
(3) Where the impaired value of an asset recorded in the underlying profits accounts for any accounting period is less than the substituted value of the asset for that period, use the value from the underlying profits accounts instead for that period and all subsequent periods (and subsection (2) does not apply in relation to that value).”
(2) In section 197 (eligible tangible asset amount), in subsection (3)—
(a) after “means” insert “values”, and
(b) after “parent” insert “(and not values as substituted as a result of any other provision of this Part)”.”.
This amendment clarifies how substituted values are to be used when determining profits for the purposes of multinational top up tax (and domestic top up tax).
Amendment 21, in schedule 4, page 135, line 27, leave out “entities”.
This amendment corrects a substitution.
Amendment 22, in schedule 4, page 145, line 28, leave out from beginning to end of line 28 on page 146 and insert—
“198ZA Eligible payroll costs: flow through entities
(1) A member of a multinational group that is a flow through entity has a flow through payroll amount for a territory for an accounting period if the member has costs that would be eligible payroll costs if the member were located in that territory and were not a flow through entity and—
(a) there is at least one other member of the group—
(i) that is not a flow through entity,
(ii) that is located in that territory, and
(iii) to whom a proportion of the underlying profits of the flow through entity for the accounting period are allocated under section 168 (underlying profits of transparent entities) or, where the underlying profits of the entity are nil or less, would be so allocated if the flow through entity had underlying profits of 100 euros, or
(b) the entity—
(i) is a flow through entity to some extent for that period as a result of section 169 (certain non tax resident entities to be treated as flow through entities),
(ii) is not a flow through entity to some extent for that period, and
(iii) was created in that territory.
(2) Section 196 applies for the purposes of determining a flow through payroll amount of a flow through entity for a territory as it applies for the purposes of determining eligible payroll costs but as if—
(a) any reference in that section to the territory of the member were to the territory to which the flow through payroll amount relates, and
(b) subsection (7) of that section were omitted.
(3) Where a member of a multinational group that is a flow through entity has a flow through payroll amount for a territory for an accounting period, the eligible payroll costs of each member of the group falling within subsection (1)(a) for that period (which may be nil) are to be increased by the amount given by multiplying the flow through payroll amount by the relevant proportion in relation to that member for that period.
(4) The relevant proportion in relation to a member for an accounting period is the proportion of the underlying profits of the flow through entity for that period—
(a) in a case where the flow through entity has underlying profits that exceed nil for that period, that is allocated to that member under section 168, or
(b) in a case where the underlying profits of the flow through entity for that period are nil or less, that would be allocated to that member if the flow through entity had underlying profits of 100 euros.
(5) Where a flow through entity—
(a) is a flow through entity to some extent for an accounting period as a result of section 169,
(b) is not a flow through entity to some extent for that period, and
(c) was created in a territory for which it has a flow through payroll amount for that period,
the eligible payroll costs of that entity for that period (which may be nil) are to be increased by the amount given by multiplying that flow through payroll amount by the relevant proportion in relation to that entity for that period.
(6) The relevant proportion in relation to that entity for an accounting period is the proportion of the underlying profits of the entity for that period—
(a) in a case where the entity has underlying profits that exceed nil for that period, that are not allocated to any other entity under section 168, or
(b) in a case where the underlying profits of the entity for that period are nil or less, that would not be allocated to any other entity under that section if the entity had profits of 100 euros.
(7) For the purposes of applying this section in relation to a multinational group whose ultimate parent is a flow through entity, the ultimate parent is to be treated as not being a flow through entity.
198ZB Eligible tangible asset amount: flow through entities
(1) A member of a multinational group that is a flow through entity that is not the ultimate parent has a flow through tangible asset amount for a territory for an accounting period if the member holds one or more assets in that territory and—
(a) there is at least one other member of the group—
(i) that is not a flow through entity,
(ii) that is located in that territory, and
(iii) to whom a proportion of the underlying profits of the flow through entity for the accounting period are allocated under section 168 (underlying profits of transparent entities) or, where the underlying profits of the entity are nil or less, would be so allocated if the flow through entity had underlying profits of 100 euros, or
(b) the entity—
(i) is a flow through entity to some extent for that period as a result of section 169 (certain non tax resident entities to be treated as flow through entities),
(ii) is not a flow through entity to some extent for that period, and
(iii) was created in that territory.
(2) Sections 197 and 197A apply for the purposes of determining a flow through tangible asset amount of a flow through entity for a territory as they apply for the purposes of determining an eligible tangible asset amount but as if—
(a) any reference in those sections to the territory of the member were to the territory to which the flow through tangible asset amount relates, and
(b) subsection (10) of section 197 were omitted.
(3) Where a member of a multinational group that is a flow through entity has a flow through tangible asset amount for a territory for an accounting period, the eligible tangible asset amount of each member of the group falling within subsection (1)(a) for that period (which may be nil) is to be increased by the amount given by multiplying the flow through tangible asset amount by the relevant proportion in relation to that member for that period.
(4) The relevant proportion in relation to a member for an accounting period is the proportion of the underlying profits of the flow through entity for that period—
(a) in a case where the flow through entity has underlying profits that exceed nil for that period, that is allocated to that member under section 168, or
(b) in a case where the underlying profits of the flow through entity for that period are nil or less, that would be allocated to that member if the flow through entity had underlying profits of 100 euros.
(5) Where a flow through entity—
(a) is a flow through entity to some extent for an accounting period as a result of section 169,
(b) is not a flow through entity to some extent for that period, and
(c) was created in a territory for which it has a flow through tangible asset amount for that period,
the eligible tangible asset amount of that entity for that period (which may be nil) is to be increased by the amount given by multiplying that flow through tangible asset amount by the relevant proportion in relation to that entity for that period.
(6) The relevant proportion in relation to that entity for an accounting period is the proportion of the underlying profits of the entity for that period—
(a) in a case where the entity has underlying profits that exceed nil for that period, that are not allocated to any other entity under section 168, or
(b) in a case where the underlying profits of the entity for that period are nil or less, that would not be allocated to any other entity under that section if the entity had profits of 100 euros.
(7) For the purposes of applying this section in relation to a multinational group whose ultimate parent is a flow through entity, the ultimate parent is to be treated as not being a flow through entity.
198ZC Eligible payroll costs and eligible tangible asset amount: flow through ultimate parent
(1) In determining for an accounting period the eligible payroll costs or eligible tangible asset amount of a flow through entity that is the ultimate parent of a multinational group, the amount given by section 196 or 197 is to be reduced by the section 170 proportion.
(2) In subsection (1), “the section 170 proportion” means the proportion of the adjusted profits of the flow through entity for the accounting period that—
(a) in a case where subsection (1) of 170 (adjustments for ultimate parent that is a flow through entity) applies, is excluded under that subsection, or
(b) in a case where that subsection does not apply as a result of the entity having not made a profit for that period, would be excluded under that subsection if the entity had adjusted profits of 100 euros.
(3) In subsection (2), “the adjusted profits” means the adjusted profits before the application of section 170.”.
This amendment secures that eligible payroll costs and eligible tangible asset amounts are allocated from flow through entities in a manner that is consistent with the Pillar Two model rules.
Amendment 23, in schedule 4, page 146, line 28, at end insert—
“32A In section 196 (eligible payroll costs), after subsection (6) insert—
“(7) A member of a multinational group that is a flow through entity that is a responsible member of the group but which is not the ultimate parent is to be regarded as having nil eligible payroll costs (subject to the application of section 198ZA).”
32B In section 197 (eligible tangible asset amount), after subsection (9) insert—
“(10) A member of a multinational group that is a flow through entity that is a responsible member of the group but which is not the ultimate parent is to be regarded as having an eligible tangible asset amount of nil (subject to the application of section 198ZB).””.
This amendment is consequential on Amendment 22.
Amendment 4, in schedule 4, page 146, line 34, at end insert—
“Additional top up amounts
33A In section 203 (additional top up amounts where covered taxes less than expected), in subsections (4)(b), (5)(b), (6)(b) and (7)(b), for “reduction by relevant QDT credit” substitute “any reduction”.
33B (1) Section 206 (additional top up amounts where recalculations required) is amended as follows.
(2) In subsection (1)—
(a) in the words before paragraph (a), after “members” insert “(“the current members”)”, and
(b) in paragraph (b), before “members” insert “current”.
(3) In subsection (2)—
(a) in paragraph (a), for “those members would have for a prior period” substitute “the standard members of the group in the territory in a prior period would have for that period”, and
(b) in the words after paragraph (b), before “members” insert “current”.
(4) In subsection (3)—
(a) in Step 1, for “those members would have had for the prior period” substitute “the standard members of the group in the territory for the prior period would have had for that period”,
(b) in Step 3, after “nil” insert “(and if there are no such results, the result of this step is nil)”, and
(c) in Step 4—
(i) before “members” insert “current””, and
(ii) for “Step 2“ substitute “Step 3”.
(5) In subsection (4)—
(a) for “those members” substitute “the current members”, and
(b) for “in accordance with subsections (5) to (8)” substitute “as follows”.
(6) In subsection (5)—
(a) in paragraph (a)—
(i) for “standard” substitute “current”, and
(ii) before “period” insert “current”,
(b) in paragraph (b), for “members for the members’ territory” substitute “current members”, and
(c) in paragraph (c), for “reduction by relevant QDT credit” substitute “any reduction”.
(7) In subsection (6)—
(a) in paragraph (a)—
(i) for “standard” substitute “current”, and
(ii) before “period” insert “current”,
(b) in paragraph (b), for “standard members in the territory” substitute “current members”, and
(c) in paragraph (c), for “reduction by relevant QDT credit” substitute “any reduction”.
(8) In subsection (7)—
(a) in paragraph (a)—
(i) for “standard” substitute “current”,
(ii) before “period”, in the first place it occurs, insert “current”, and
(iii) for “members for the members’ territory” substitute “the current members”, and
(b) in paragraph (b)—
(i) for “reduction by relevant QDT credit” substitute “any reduction”, and
(ii) for “members for the member’s territory” substitute “current members”.
(9) In subsection (8)—
(a) in paragraph (a)—
(i) for “standard” substitute “current”, and
(ii) for “members for the members’ territory” substitute “the current members”,
(b) in paragraph (b)—
(i) for “reduction by relevant QDT credit” substitute “any reduction”, and
(ii) for “members for the member’s territory” substitute “current members”, and
(c) in the words after paragraph (b) for the words from “amount”, in the second place it occurs, to the end substitute “relevant amount.”
(10) After subsection (8) insert—
“(9) The relevant amount is the amount given by multiplying—
(a) the sum of the amounts of qualifying domestic top up tax accrued by the current members in the current period, by
(b) the amount given by dividing—
(i) the collective additional amount under this section, by
(ii) the sum of that collective additional amount, any collective additional amount under section 203 and the total top up amount for the current period.””.
This amendment clarifies how to calculate top up amounts in cases where amounts for a prior period have had to be recalculated.
Amendment 5, in schedule 4, page 147, line 6, at end insert—
“(e) in paragraph (f), for “of which the entity is a member” substitute “referred to in paragraph (a)”.”.
This amendment forms part of a series of amendments designed to make sure that multinational top up tax, and domestic top up tax, apply properly in cases involving joint ventures. See also amendments 6, 7, 8, 9, 10 and 11.
Amendment 6, in schedule 4, page 147, line 12, at end insert—
“(ia) after “Part”, in the second place it occurs, insert “, this Chapter other than this section and section 226”, and”.
This amendment forms part of a series of amendments designed to make sure that multinational top up tax, and domestic top up tax, apply properly in cases involving joint ventures. See also amendments 5, 7, 8, 9, 10 and 11.
Amendment 7, in schedule 4, page 147, line 33, leave out “where” and insert “if”.
This amendment forms part of a series of amendments designed to make sure that multinational top up tax, and domestic top up tax, apply properly in cases involving joint ventures. See also amendments 5, 6, 8, 9, 10 and 11.
Amendment 8, in schedule 4, page 147, line 35, leave out “of the group has” and insert
“meets Condition A and Condition B for that period”.
This amendment forms part of a series of amendments designed to make sure that multinational top up tax, and domestic top up tax, apply properly in cases involving joint ventures. See also amendments 5, 6, 7, 9, 10 and 11.
Amendment 9, in schedule 4, page 147, line 37, after “group” insert “(the “relevant group”)”.
This amendment forms part of a series of amendments designed to make sure that multinational top up tax, and domestic top up tax, apply properly in cases involving joint ventures. See also amendments 5, 6, 7, 8, 10 and 11.
Amendment 10, in schedule 4, page 147, line 39, leave out “of the group have,” and insert
“meet Condition C for that period and—
(i) all of those members are located in the United Kingdom, or
(ii) the relevant group is a multinational group (see section 126 in Part 3), and at least one of the members is located in a Pillar Two territory.”.
This amendment forms part of a series of amendments designed to make sure that multinational top up tax, and domestic top up tax, apply properly in cases involving joint ventures. See also amendments 5, 6, 7, 8, 9, and 11.
Amendment 11, in schedule 4, page 147, leave out lines 40 and 41.
This amendment forms part of a series of amendments designed to make sure that multinational top up tax, and domestic top up tax, apply properly in cases involving joint ventures. See also amendments 5, 6, 7, 8, 9, and 10.
Amendment 24, in schedule 4, page 151, line 19, leave out “(e)” and insert “(d)”.
This amendment corrects an incorrect cross reference.
Amendment 25, in schedule 4, page 153, line 12, after “establishment” insert
“and that is incurred in the territory of the permanent establishment”.
This amendment ensures the correct allocation of tax of an entity with a permanent establishment.
Amendment 26, in schedule 4, page 154, line 36, leave out “(2)(a)(i)” and insert “(2)(a)(ii)”.
This amendment corrects an incorrect cross reference.
Amendment 27, in schedule 4, page 159, line 42, leave out “territory” and insert “tax”.
This amendment corrects an error.
Amendment 28, in schedule 4, page 160, line 28, after second “return” insert “notification”.
This amendment ensures the correct document is referred to.
Amendment 29, in schedule 4, page 160, line 29, after “return” insert “or notification”.
This amendment is consequential on Amendment 28.
Amendment 12, in schedule 4, page 161, line 32, at end insert—
“54A In section 211 (transfer of assets or liabilities to a member of a multinational group)—
(a) in subsection (2)—
(i) omit the “and” after paragraph (b), and
(ii) after that paragraph insert—
“(ba) the transferor and the transferee are not members of the same type located in the same territory, and”, and
(b) after subsection (4) insert—
“(5) For the purposes of subsection (2) two members of a multinational group are of the same type if—
(a) they are both standard members of the group,
(b) they are both investment entities, or
(c) they are both members of the same minority subgroup (see section 228).””.
This amendment removes the requirement for a transfer between members of a multinational group to be reflected on the arm’s length basis where the members are of the same type and in the same jurisdiction.
Amendment 13, in schedule 4, page 162, line 7, at end insert—
“58A In section 217(8), for paragraph (a) substitute—
“(a) the aggregate covered tax balance of the standard members of the group in the territory of the member for the prior period is not reduced by 1 million euros or more, and”.
58B In section 220 (top up amount of investment entity)—
(a) in subsection (1)—
(i) in Step 8, after “entity” insert “, unless the entity has a positive undistributed income amount (see sections 214 and 215) for the period (in which case proceed to Step 9), and
(ii) after that Step insert—
“Step 9
Where this Step applies, the top up amount for the entity is the sum of—
(a) the result of Step 8, and
(b) the positive undistributed income amount for the entity for the period multiplied by 15%.”, and
(b) omit subsection (2).”.
This amendment secures that a decrease in covered taxes in a previous accounting period is insignificant (and will therefore be ignored) only if the aggregate of covered taxes payable by the standard members is not reduced by 1 million euros or more, and also corrects an error in the calculation of multinational top up tax payable in relation to investment entities that would have resulted in an excessive liability.
Amendment 30, in schedule 4, page 162, line 16, at end insert—
“62A In Schedule 16A (multinational top up tax: safe harbours), in paragraph 4(1)(b) omit “members of the group that are”.”.
This amendment secures that the provision amended refers to members of a joint venture group, rather than the members of a group that owns the joint venture.
Amendment 14, in schedule 4, page 162, line 24, at end insert—
“(f) paragraph 58B (top up amount of investment entity).”.
This amendment is consequential on Amendment 13 (and provides for part of the amendment made by that amendment to have effect for accounting periods beginning on or after 31 December 2023).
Amendment 31, in schedule 4, page 162, line 34, leave out “by the filing member”.
This amendment clarifies how the retrospection election is to be made.
Amendment 32, in schedule 4, page 162, line 35, leave out “group or qualifying entity” and insert
“a group, or a qualifying entity that is not a member of a group”.
This amendment clarifies how the retrospection election is to be made.
Amendment 33, in schedule 4, page 162, line 40, at end insert—
“(za) is to be made—
(i) in the case of a multinational group or group, by the filing member, or
(ii) in the case of a qualifying entity that is not a member of a group, by that entity,”.
This amendment clarifies how the retrospection election is to be made.
Amendment 34, in schedule 4, page 163, line 6, after “member” insert “, or former member,”.
This amendment clarifies that consent may be required of former members of a group or multinational group where they could have a liability to domestic top up tax.
Amendment 35, in schedule 4, page 163, line 8, after “tax” insert
“that has top up amounts or additional top up amounts for any accounting period commencing before 31 December 2024 as a result of the person’s membership of the multinational group or group”.
This amendment and amendment 36 make sure that it is only members of a group actually liable to tax that must give consent for the retrospection election.
Amendment 36, in schedule 4, page 163, line 9, after “entity” insert
“that has top up amounts or additional top up amounts for any accounting period commencing before 31 December 2024 as a result of the entity’s membership of the multinational group or group”.
This amendment and Amendment 35 make sure that it is only members of a group actually liable to tax that must give consent for the retrospection election.
Amendment 37, in schedule 4, page 163, line 22, at end insert—
“(9A) Sub paragraph (9B) applies where—
(a) the filing member of a multinational group or group has made a retrospection election,
(b) at the time the election was made it was reasonable for the filing member to consider that the consent of a person was not required,
(c) that consent was not given,
(d) the filing member becomes aware that the consent of that person was, or may have been, required, and
(e) the written consent of that person is given within the period of 60 days beginning with the day on which the condition in paragraph (d) is first met.
(9B) The consent of that person is to be treated as having been given before the election was made.”.—(James Murray.)
This amendment allows retrospective consent to be given in respect of elections.
Schedule 4, as amended, agreed to.
Clause 20
Offshore receipts in respect of intangible property
Question proposed, That the clause stand part of the Bill.
The clause repeals the offshore receipts in respect of intangible property legislation, known as ORIP, which was aimed at disincentivising large multinational enterprises from holding intangible property in a low tax jurisdiction if the intangible property was used to generate income in the UK. Such enterprises could thereby gain an unfair competitive advantage over those that held intangible property in the UK. The policy is no longer required, because pillar two—the global minimum tax—will more comprehensively discourage the multinational tax planning arrangements that ORIP sought to counter.
As set out in the corporate tax road map, which we debated earlier, the Government are committed to simplification of the UK’s rules for taxing cross border activities in the light of pillar two. Repeal will take place alongside the introduction of pillar two’s undertaxed profit rules in the UK from 31 December 2024, which we debated with clause 19. Clause 20 simply repeals chapter 2A of part 5 of the Income Tax (Trading and Other Income) Act 2005, and I commend it to the Committee.
As we heard from the Minister, clause 20 repeals the ORIP rules, which are about ensuring that profits derived from UK consumers are taxed fairly and consistently, regardless of where the underlying intangible property is held. The previous Government announced in the 2023 autumn statement that they would abolish ORIP, so we support the clause.
The ORIP rules were a short term, unilateral measure introduced in the Finance Act 2019 to disincentivise large multinational enterprises from holding intangible property—assets such as patents, trademarks and copyrights—in low tax jurisdictions if it was used to generate income in the UK. Such multinationals could thereby gain an unfair competitive advantage over others that hold intangible property in the UK, as well as eroding the UK tax base. However, the legislation is no longer required, because the OECD/G20 inclusive framework pillar two global minimum tax rules will comprehensively discourage the multinational tax planning arrangements that ORIP sought to counter.
As the Minister said, the repeal will happen alongside the introduction of the pillar two undertaxed profits rule from 31 December 2024. Has he assessed how successful the ORIP rules have been since their introduction? HMRC’s tax information and impact notes state that this measure will have a negligible impact on around 30 large multinational groups and a negative impact on the Exchequer, peaking at £40 million in 2026-27. Can the Minister clarify why the repeal of the ORIP rules is having a negative impact on revenues to the Exchequer? I note that the Chartered Institute of Taxation has welcomed the measure and specifically said that “any reduction in the legislative code to minimise overlap and unnecessary measures is welcome.”
We say amen to that.
As I have set out, we will not oppose the clause, but I look forward to the Minister’s response to my specific points about ORIP.
I thank the shadow Minister for his support for the clause. I think his question was about the impact of repealing ORIP. A fundamental point here is that pillar two, which we debated previously, will now tax the profits that were the target of ORIP. Pillar two is expected to raise more than £15 billion over the next six years, so ORIP is simply no longer needed. The Government believe that simplifying and rationalising the UK’s rules for taxing cross border activities is important, and as such it is right that we use this opportunity to repeal ORIP.
Question put and agreed to. Clause 20 accordingly ordered to stand part of the Bill. Clause 21 Application of PAYE in relation to internationally mobile employees etc.
I beg to move amendment 15, in clause 21, page 11, line 21, after “is” insert “or has been”.
This amendment makes it clear that new section 690 applies if an employee has been internationally mobile in a tax year, even if the employee is no longer internationally mobile.
With this it will be convenient to discuss the following: Government amendments 16 to 19.
Clause stand part.
I will briefly address clause 21 before explaining what the amendment seeks to achieve.
The clause makes changes to simplify the process for operating pay as you earn where an employee is eligible for overseas workday relief. It relates to some of the reforms we are making around non UK domiciled individuals, which we will return to later in Committee, because those clauses are in a different part of the Bill. More broadly, the context of this measure is that the Government are removing the outdated concept of domicile status from the tax system, and replacing it with a new, internationally competitive, residence based regime from 6 April 2025.
Currently, where an employer makes an application to treat only a portion of the income that they pay to an employee as PAYE income, they are required to wait for HMRC to approve an application, which can result in delays. The changes made by clause 21 will mean that from 6 April 2025, an employer will be able to operate PAYE only on income relating to work done in the UK once they have received an acknowledgment from HMRC of their completed application, rather than having to wait for HMRC to approve it. That approach will simplify the operation of overseas workday relief for employers, while still allowing HMRC to direct employers to amend the proportion of income on which PAYE is operated, should it be necessary to do so.
Amendments 15 to 19 are needed in order to ensure that the legislation regarding the correct operation of PAYE works as intended. The Government are committed to making the tax system fairer so that everyone who is a long term resident in the UK pays their taxes here. The new regime ensures this, while also being more attractive than the current approach, as individuals will be able to bring income and gains into the UK without attracting an additional tax charge. That will encourage them to spend and invest those funds in the UK.
As we have heard from the Minister, clause 21 amends the process by which employers can operate PAYE on a proportion of payments of employment income made to an employee during the tax year. It is a welcome change. We will be supporting the clause and the simplification that it introduces.
By way of background, the clause amends section 690 of the Income Tax (Earnings and Pensions) Act 2003. Section 690 provides a mechanism for an individual or employer to seek a decision from HMRC regarding the tax treatment of certain earnings. The resulting determination under section 690 is an agreement between HMRC and a UK employer on the estimated percentage of duties that an internationally mobile employee expects to carry out in a tax year. Once that determination is provided, the employer can operate PAYE on only that percentage of the employee’s salary.
Unfortunately, that is easier said than done. According to the Institute of Chartered Accountants in England and Wales, historically HMRC has missed its four month target to agree employers’ applications, and in some cases it has taken up to a year to obtain HMRC’s approval. This is just one example of the difficulty that taxpayers have in engaging with HMRC. I welcome the comments that the Minister made at Treasury questions last week about the work that he is doing—he chairs the board of HMRC, I believe—to ensure that HMRC delivers a better service for customers. We all wish him well on that.
Perhaps this is an opportune time to remind the 3.4 million people who have to submit self assessment tax returns to do so before the 31 January deadline. Colleagues may wish to ensure that they have submitted theirs.
In the absence of an agreement, PAYE must be operated on the whole salary, meaning that the employee would be overtaxed and must claim relief after the year end. That is not a satisfactory outcome for anyone. These changes will allow employers to immediately operate PAYE on only the proportion of earnings that they believe relates to UK duties, rather than having to wait for HMRC to approve the application. This new process is a welcome step forward in dealing with an issue that HMRC has had in meeting its legal obligations under the current tax system.
The Chartered Institute of Taxation and the ICAEW have raised concerns that the reforms to section 690 make no reference to treaty non resident cases. Will the Minister clarify whether there will be another process for treaty non resident cases?
The ICAEW also considers that the Bill overlooks scenarios in which a section 690 determination will be required—for instance, where all the UK tax on foreign employment income is covered by foreign tax credits. Has the Minister considered amending the new section 690 so that the definition of an internationally mobile employee includes that scenario?
On the scope of the measures, I would be grateful if the Minister can confirm how many people the change is likely to impact, and to what extent it is expected to improve the timeliness of a determination. I would also be grateful if he can confirm what risks, if any, the change poses to tax compliance.
As I have set out, we support this change, but I would appreciate the Minister’s comments on how the amended process will work for certain groups. I recognise that this is a detailed issue, so he may wish to write to the Committee on the points I have raised.
I thank the shadow Minister for his support for the clause and the amendments. He rightly recognises that this is a simplification to make things happen quicker in the tax system, and we can all agree on that. He raised some specific points, and I will write to him on the detail of the operation of the clause so that he has a record of that. I endorse his call for anyone who has not already submitted their self assessment tax return to be mindful of the deadline of the end of the month.
Amendment 15 agreed to. Amendments made: 16, in clause 21, page 12, line 4, after “being” insert “or having been”.
This amendment is consequential on Amendment 15. Amendment 17, in clause 21, page 12, line 22, after “is” insert “or has been”.
This amendment makes it clear that a notice under new section 690A can be given during the mobile tax year if the employee has been internationally mobile during that year, even if the employee is no longer internationally mobile. Amendment 18, in clause 21, page 13, line 22, leave out “public notice given” and insert “general direction made”.
This amendment means that the requirements of notices under new section 690A will be specified in a general direction made by HMRC rather than a public notice. Amendment 19, in clause 21, page 15, line 38, at end insert— “(3) Any direction given by an officer of Revenue and Customs under section 690 of ITEPA 2003 (employee non resident etc) has no effect in relation to tax year 2025-2026 or any subsequent tax year.” —(James Murray.) This amendment means that any direction given under the old section 690 will cease to have effect in relation to future tax years. Clause 21, as amended, agreed to. Clause 22 Advance pricing agreements: indirect participation in financing cases Question proposed, That the clause stand part of the Bill.
Clause 22 introduces technical amendments to provide certainty that advance pricing agreements are available for all financing arrangements covered by the transfer pricing rules, in line with the existing HMRC guidance.
The transfer pricing rules ensure that transactions between related parties, such as companies in the same multinational group, are priced as though they were between independent entities, in line with the arm’s length principle. This makes sure that each related party pays the appropriate amount of tax in the country in which it operates. That ensures a fair distribution of tax revenues across different jurisdictions and prevents companies from manipulating intra group prices to shift profits to lower tax jurisdictions.
The UK’s advance pricing agreement legislation provides for agreements to be entered into between HMRC and businesses in scope of the transfer pricing rules, which determine the transfer pricing method that businesses should use to determine the arm’s length price. An advance pricing agreement is not special treatment for that taxpayer; rather, it provides improved certainty to taxpayers in areas where the correct application of the transfer pricing rules may be in doubt.
HMRC has recently become aware of a technical gap in the legislation that was contrary to its long established statement of practice. The said statement of practice allows for an advance pricing agreement to be entered into where the parties are acting together in relation to financing arrangements. The changes made by this clause fix that gap and will ensure that HMRC can provide businesses with tax certainty in relation to the application of the transfer pricing legislation to all in scope financing arrangements, in line with HMRC’s statement of practice.
The intention of this clause is to fix a technical gap in existing legislation and to ensure that HMRC can provide certainty in line with its existing published guidance.
As we heard from the Minister, clause 22 makes amendments to parts 4 and 5 of the Taxation (International and Other Provisions) Act 2010 concerning the meaning of indirect participation in relation to advance pricing agreements. Once again, we welcome these changes. An APA is a procedural agreement between one or more taxpayers or one or more tax authorities on the future application of transfer pricing policies. Advance pricing agreements can help to provide certainty and avoid transfer pricing disputes.
HMRC recently became aware that there is a technical gap in the circumstances in which an advance pricing agreement may be entered into. Clause 22 aims to rectify that gap and provide clarity on what constitutes indirect participation in the context of APAs. The clause amends both the transfer pricing and APA legislation to ensure the validity of advance pricing agreements in cases where the parties to the provision are connected only by virtue of acting together in relation to the financing arrangements.
The clause will ensure the validity of advance pricing agreements with businesses in such circumstances and is intended to ensure that HMRC can provide businesses with tax certainty in relation to the application of transfer pricing legislation. We have spoken a lot during this Committee about the importance of certainty for business, so that is a welcome step.
By providing clarification on what indirect participation means, the Government are confirming the scope of advance pricing agreements, which should improve certainty and dispute resolution. The Chartered Institute of Taxation notes that “this measure will be helpful for taxpayers that have applied to or want to apply to HMRC for APAs in relation to financing arrangements (such as Advance Thin Capitalisation Agreements) in circumstances where the UK’s transfer pricing rules are only in scope due to persons acting together in relation to those financing arrangements.”
The clause will likely improve the process both for businesses and HMRC. It is, however, a little hard to understand the real world impact from the tax information and impact notes. Now that indirect participation has been defined and the scope of advance pricing agreements effectively broadened, will there be any extra enforcement cost? I would be grateful if the Minister could confirm how many businesses the change is likely to impact. It would also be useful to know whether the Government have calculated the economic benefits of advance pricing agreements and, subsequently, how the change will impact the Exchequer. As I have set out, we welcome this technical change, but I would welcome the Minister’s comments on the issues I have raised.
I thank the hon. Gentleman for his support for the clause. We are on a roll of him supporting clause after clause—may this continue throughout the rest of the Bill.
The hon. Gentleman rightly recognises that this is a simplification measure on which all Members can agree. As it is a simplification measure, it is non scoring, so it does not have an Exchequer impact—it simply provides certainty on how the rules as intended will apply. It does not change how the rules apply or make a policy change to the Government’s approach; it makes sure that there is total certainty and clarity about how they will apply. Only a limited number of taxpayers will be affected, and we expect them to welcome the change because of this certainty.
I welcome the Opposition’s support for this clause, because I think we can all agree on giving as much certainty to taxpayers and businesses as possible.
Question put and agreed to. Clause 22 accordingly ordered to stand part of the Bill. Clause 23 Expenditure on zero emission cars Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss clause 24 stand part.
Clauses 23 and 24 make changes to extend the 100% first year allowances for qualifying expenditure on zero emission cars and plant or machinery for electric vehicle charge points by a further year to April 2026. The first year allowance for cars was originally introduced for expenditure incurred from 17 April 2002 for low CO2-emission cars, including electric vehicles, and eligibility was later restricted to cars with zero CO2 emissions from April 2021. The first year allowance for electric vehicle charge points was originally introduced for expenditure incurred from 23 November 2016. These first year allowances were introduced to support the UK’s transition to cleaner vehicles and were due to expire in April 2025.
The changes made by clauses 23 and 24 will extend the availability of the capital allowances for a further year to 31 March 2026 for corporation tax purposes and 5 April 2026 for income tax purposes. This ensures that investments in zero emission cars and charge point infrastructure continue to receive the most generous capital allowance treatment. By extending the first year allowances for zero emission cars and charge point infrastructure, the measure will provide continued support for the transition to electric vehicles.
As the Minister set out, clauses 23 and 24 extend the availability of the 100% first year allowance for business expenditure on zero emission cars and for expenditure on plant or machinery for an electric vehicle charging point. Both allowances are extended for a single year from April 2025. In their current forms, both allowances were introduced by Conservative Governments. Although we will not oppose the clauses, there are a few questions that I would like the Minister to address.
The first relates to a point that has been highlighted by the Association of Taxation Technicians concerning clause 24. The ATT has queried why the specific allowance for charging points is being extended when this expenditure has been covered by both the annual investment allowance and full expensing since the Conservative Government made those reliefs permanent in 2023. That means that the allowance is really relevant only to unincorporated business—for example, a partnership or sole trader— that has already used its annual investment allowance in full, which is a scenario that the ATT considers to be quite rare.
According to the ATT, we should be able to tell how rare this is from the number of claims made for this specific allowance on tax returns. Will the Minister provide any information that he has to hand on that? HMRC has said it expects 6,000 unincorporated businesses to be impacted by clauses 23 and 24. Does the Minister have a figure for clause 24 alone and for specific unincorporated businesses that have exhausted their annual investment allowance? At the very least, I would be grateful if the Minister explained to the Committee the rationale behind that specific extension, given the context that the ATT has so clearly set out.
The cost to HMRC of implementing the clauses is a cool £1.2 million—a relatively high figure for the extension of a pre existing allowance for a single year. If clause 24 is largely redundant, this hardly seems good value for money on HMRC’s part. I therefore ask the Minister to provide a clause by clause breakdown of the £1.2 million of taxpayers’ money that HMRC will spend to be able to execute the relief.
Turning back to clause 23, electric vehicles, unlike charging points, are not in scope of the annual investment allowance or full expensing, so I will not question the extension of that specific allowance, which we welcome. However, given the Government’s ambition to accelerate our transition to electric vehicles, I cannot help but wonder why they are putting a brake on the allowance after just a single year.
The Red Book states that the allowance will “help drive the transition to electric vehicles”, yet from April 2026, a business investing in these cars will receive relief only through annual writing down allowances of either 18% or 6%, depending on the car’s emissions—those incentives are less generous and less immediate. At Budget 2020, we extended the EV allowance by four years to provide the support and certainty to businesses that the Minister says he so desperately wants. This Labour Government have declined to do the same, creating what some—not me—may call a cliff edge. As Labour increases the pace and the burden of the transition to net zero, they are also shifting the burden away from His Majesty’s Government and on to British businesses and British consumers. Once again, it is they who will pay the price for the Government’s obsession with decarbonising our grid and imposing net zero policies on the British public.
I thank the shadow Minister for his questions and his support for the clause. He mentioned a question that the ATT raised about the interaction between the extension of the 100% first year allowance we are proposing, particularly for charge points, and the context of full expensing in the annual investment allowance. For businesses that are investing over the annual investment allowance limit, there may be circumstances where, if the first year allowance were not extended as it is by these clauses, some investment in EV charge point equipment would qualify for only a 50% first year allowance rather than 100% full expensing. The Government want to support investment in EV charge point infrastructure by providing full relief for investment in equipment for EV charge points. That is why we have introduced this measure.
The shadow Minister asked for a specific figure. I do not have that to hand, but I am happy to look into what information is available and get back to him. More broadly, the 100% first year allowance was due to expire in April 2025. This conversation has echoes of an earlier discussion we had around retail, hospitality and leisure business rates relief, and reliefs or allowances that we inherited and which are due to expire in April 2025. We have decided to extend this, and the reason why is to help support businesses and individuals who are buying or making electric vehicles and associated infrastructure. We see this as one of a series of measures to support the EV transition. It has come up in relation to a number of clauses, so I think it is clear to the Committee that the Government are pursuing a range of different interventions and policies to carefully calibrate the right level of Government support.
In the interest of providing certainty, would the Minister explain why the Government did not choose a multi year allowance on this, rather than going for an extension of only one year?
As I was saying, we are seeking to calibrate the incentives carefully for the transition to EVs to support manufacturers and consumers and to give as much certainty as possible, while making sure that we have the right support in different parts of the tax system to provide value for money and support the transition in the right way. It is not a question of a single measure being responsible for supporting the transition. This relies on manufacturers and consumers playing their part, but the Government need to play their role, too, which is why this measure sits alongside others we have debated, including those that are not part of the Finance Bill but are part of the Government’s broader agenda. Collectively, they will support this transition.
Question put and agreed to. Clause 23 accordingly ordered to stand part of the Bill. Clause 24 ordered to stand part of the Bill. Clause 25 Commercial letting of furnished holiday accommodation Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss schedule 5.
The clause and the schedule abolish the furnished holiday lettings tax regime from April 2025, removing the tax advantages that landlords who offer short term holiday lets have over those who provide standard residential properties. Furnished holiday let owners benefit from a more generous tax regime than landlords of other property types, such as standard residential properties. The advantages of that tax regime include capital gains tax reliefs: FHLs can qualify for gains to be charged at 10%, unlike buy to let properties and second homes. FHLs also benefit from unrestricted income tax relief on their mortgage interest, rather than the 20% restriction on relief for standard lettings, and from capital allowance on furniture and furnishings. FHL profits are also counted as earned income for pension purposes.
The previous Government announced at the spring Budget 2024 that they would abolish the FHL tax regime to level the playing field with landlords of standard residential properties. We are now legislating for that measure and abolishing the FHL tax regime from April 2025, which will raise around £190 million a year by 2029-30 and thereby support the vital public services we all rely on. The changes made by clause 25 and schedule 5 mean that FHL landlords will be treated the same as other residential landlords for the purposes of income tax, corporation tax and capital gains tax.
Does the Minister recognise the difference between properties with a use clause compelling them to be used for holiday let accommodation and houses that do not, and that can therefore be used as residential properties? Those two things do not necessarily line up in terms of what the owner can use the property for.
If I understand the hon. Member’s question correctly, it might relate to clauses in the lease of the property, but I am not quite sure what her point was. I will come back to this if I have misunderstood her question, but clause 5 relates specifically to the tax treatment of these properties. It is about how FHLs, which can still operate in the same way as they have previously in terms of lettings, will be treated by the tax system to bring them in line with standard residential property tax treatment. This is about equalising the tax treatment of FHL landlords and standard landlords, rather than seeking broader changes, which may be what she was alluding to, but I am happy to return to it later in the debate if I have misunderstood her question.
This measure does not penalise the provision of FHLs; it simply brings their tax treatment more in line with long term lets. It does that to remove the tax advantages that FHL landlords have received over other property businesses in four key areas. First, finance cost relief will apply in the same way as for long term lettings, with income tax relief on their mortgage interest restricted to the basic rate. Secondly, it will remove the capital allowances rule for new expenditure and allow replacement of domestic items relief. Thirdly, it will withdraw access to reliefs from taxes on chargeable gains for trading business assets. Fourthly, FHL income will no longer count as earned income for pension purposes. After repeal, former FHL properties will form part of a person’s UK or overseas property business and be subject to the same rules as non furnished holiday let property businesses.
However, the Bill does not equalise tax treatment entirely. Holiday lets, whether they qualify as FHLs or not, are subject to VAT, whereas longer term, private rented sector accommodation is not. Withdrawal of finance cost relief will mainly affect higher rate and additional rate taxpayers, with basic rate payers largely unaffected. The Government have also introduced transitional arrangements. FHL properties will become part of a person’s overall property business and past FHL losses can be relieved against profits of that business in future years. Existing capital allowance claims can be continued, but new capital expenditure will be dealt with under the rules for standard residential let properties. The legislation also confirms that where a business has ceased prior to April 2025, business asset disposal relief may continue to apply to a disposal that occurs within the normal three year period following cessation, which is in line with current rules.
Did the Minister consider the different legislation in Scotland, where we have short term letting licences, visitor tax and a whole load of extra legislation coming in, which is making it difficult and reducing the amount of holiday letting available? How relevant is the proposal for Scotland?
The hon. Gentleman’s question goes slightly beyond the ambit of the tax measures we are discussing. As I understand, he is talking about the wider regulation and the approach to lettings in Scotland. To echo my response to the hon. Member for Gordon and Buchan, the measures really relate to the tax treatment of FHLs in comparison to standard property lettings, making them more equal. It does not make them entirely equal—VAT remains a point of difference—but it is about levelling the playing field between FHL landlords and the landlords of standard lettings in the tax system.
My point was really about the cumulative effect of many different taxes and restrictions making it more and more difficult for people in the letting business, which is crucial to the economy of tourist areas.
We know that in any local area there needs to be a balance between visitor accommodation and long term accommodation. I am sure that the hon. Member and others recognise the tension inherent in getting that balance right. We need to ensure not only that we are supporting our visitor economy, but that the tax system supports long term accommodation for people who live in those areas—not least because those who work in the tourism sector need somewhere to live near their place of work. It is about the balance between supporting visitor economies and long term residential lets. We agree with the previous Government, who introduced the reform, on this point. The tax treatment of FHL landlords is better if brought more in line with standard residential lets.
I will briefly mention the anti forestalling rule, which is also introduced as part of the Bill. It will prevent the obtaining of a tax advantage through the use of conditional contracts to receive capital gains relief under the current FHL rules. That rule applies from 6 March 2024.
In summary, the changes made by the provisions will make the tax system fairer by eliminating tax advantages for landlords who let out their properties as short term furnished holiday lets compared with those who let out properties for longer periods. FHL landlords will now be treated the same as other residential landlords for the purposes of income tax, corporation tax and capital gains tax. We are grateful to all the stakeholders who have already fed in following the publication of the draft legislation and supporting documents.
As the Minister set out, clause 25 and schedule 5 repeal special tax rules relating to the commercial letting of furnished holiday accommodation. The changes were first announced in our Government’s Budget in March 2024, and we will not oppose them. However, it is important to view the measures in the context of the wider changes to the circumstances of the hospitality sector as a result of Labour’s Budget—most notably the hike in national insurance contributions.
Might it not be more appropriate to view the measure in the context of the housing crisis that our country is currently in, and the record proportion of under-35s living at home with their parents rather than being able to live in their own accommodation? Does the hon. Member agree that there should be no tax incentives for accommodation to be turned into short term furnished lets as opposed to long term living places?
Order. Can we keep the discussion within the context of the clause and the schedule?
Thank you, Mr Mundell. I am grateful for the hon. Member’s intervention; we all want to see people able to get on the housing ladder, particularly younger people. There is much work to be done on that. However, I would say two things. First, I question how much of an impact the measures will have on that, but I am happy to see evidence and data from the Treasury to prove her point. Secondly, we cannot deny that the hospitality sector is in different circumstances to when the previous Government announced the measures in March 2024. As I will discuss, the measures will have an impact on the sector. I think the hon. Member would agree that it is important to support our hospitality sector, hear their concerns and for me, as the official Opposition spokesperson, to make remarks on their behalf.
As I was saying, this is not just about national insurance contributions, but the reduction in the secondary threshold for that tax, as well as the reduction in business rates relief, which has gone down from 70% to 40%. Each of those measures creates significant new costs for the hospitality sector, which is crucial to rural and coastal economies across the country. It is those same rural and coastal economies that will be disproportionately affected by the provisions of clause 25 and schedule 5.
The Professional Association of Self Caterers UK points out that traditional holiday lets businesses provide critical bedstock in visitor economies, and estimates that the holiday lets that will be impacted contribute some £9.3 billion in economic activity and support 230,000 jobs. Even Labour’s Environment Secretary has recognised the economic value of holiday lets. In his speech to the Oxford farming conference this year, he spoke about supporting farmers to “innovate and diversify” their businesses by making it easier to convert large barns into holiday lets.
Does my hon. Friend think that, by suggesting that farmers should diversify into holiday lets, the Environment Secretary intends that farmers should pay even more tax to the Treasury?
It is clear that the Government have launched an attack on farmers across rural communities in our country. The family farm tax is a disgrace. Farmers have protested and tried to make their voices heard, but still cannot get a meeting with the Chancellor of the Exchequer. I urge the Minister, who is very open to meetings, to have a word with his Chancellor, who is consistently in hiding and running out of the country when things get difficult as a result of her decisions.
Perhaps it is true that the Environment Secretary wants farmers to pay even more tax. Why else would he say to farmers in Oxford, “Convert your barns into holiday lets,” while over the road the Treasury is taking away these reliefs and making it more tax inefficient for them to do so? This is yet another area where the Labour Government seem intent on cancelling out genuinely pro growth deregulation, which we welcome, with anti growth taxation.
Will the hon. Gentleman give way?
Does the Labour Member who is about to intervene on me support holiday lets?
I am glad that we have returned to this topic, because I was about to ask the hon. Gentleman whether he might clarify the relationship between his remarks and the commercial letting of furnished holiday accommodation—[Interruption.] But of course I support the equalisation of tax measures provided for by the clause.
I am sorry, but there was a very loud cough when the hon. Lady intervened. Would she repeat her intervention?
I was simply hoping to get us back on to the topic of the commercial letting of furnished holiday accommodation.
Oh, so it was more of a heckle than an intervention, but that is very welcome too; it makes it a bit more lively for the very large audience we have today.
I would be grateful if the Minister could set out the policy of this Labour Government. Do they support holiday lets? The Environment Secretary clearly supports them and wants farmers to diversify into them, while at the same time the Treasury—yes, we announced the policy in March—clearly wants to tighten up the rules on taxation. It would be great to hear the Minister clarify that, but it seems that the answer depends on which Minister one talks to on any given day. Let us see what the answer is in this Committee, from this Minister, today.
Clause 25 also touches on a long standing issue of whether letting constitutes a trading activity or a property business. The FHL regime created a clear distinction by deeming a letting business to be considered a trade for certain purposes. Some organisations, such as the excellent Chartered Institute of Taxation, are concerned that removing the regime removes this distinction and could open up a whole can of worms, leading to costly disputes for both the taxpayer and HMRC. Can the Minister clarify what defines a letting as a trading activity in the absence of the FHL regime, or at least commit to the publication of updated, clearer guidance for the industry on that subject? The Chartered Institute of Taxation is also seeking confirmation on the following points—
I am confused as to why a party that brought in the proposals is now arguing so vehemently against them—perhaps it is still attached to its chaotic approach to government. What I am not following in the hon. Gentleman’s remarks is the argument that the equalisation of the taxation could have negative consequences. Has the hon. Gentleman interrogated the evidence that has been brought forward by those people who are letting out their holiday lets, and does he really think that there would not be an economic benefit to supporting a change in use of those homes?
These sittings are long, but I did say at the beginning of my speech that we announced in March 2024 that we would bring in this same measure and that we will support it today.
I am not saying that we are against it, but I am saying two things. First, as I was saying at the beginning of my speech, the context in which the measure is being introduced is very different from the context in March 2024. The context today is that hospitality businesses across the country, but particularly in rural communities, are being hit by a series of taxes that they did not ask for, did not vote for and were told would not happen. That is the context in which we find ourselves.
Secondly, His Majesty’s official Opposition have a duty to communicate the concerns of the British public and the sectors that will be directly impacted by this measure. It is vital that His Majesty’s Opposition scrutinise whatever policies are put in front of us, with a forward look at how that will economically damage or benefit communities. As you can tell, Mr Mundell, and as the hon. Member for Cities of London and Westminster can tell, I take a constructive tone. When we do support measures, we will say so, and when we do not, or we feel that additional scrutiny is needed, Members better believe that I will be there. That is what I am doing today. I hope that addresses the intervention from the hon. Member for Cities of London and Westminster.
In the interests of scrutiny on behalf of the many thousands of people that will be impacted by the measure and in a context of a wider hammering through the tax system by this Labour Government, let me continue my questions on behalf of the Chartered Institute of Taxation.
First of all, I seek confirmation from the Minister that an FHL disposal must be made before 6 April 2025 in order for a qualifying replacement asset to be eligible for roll over relief, even though the replacement asset itself can be purchased up to three years after FHL disposal. Secondly, I seek confirmation that lettings must cease altogether before 6 April 2025—not just furnished holiday lettings, but even unfurnished long term rentals—for an FHL disposal to qualify for business asset disposal relief. Thirdly, I seek confirmation that married couples or civil partners who jointly own an FHL must make an election if they are to continue to split the income unequally, rather than reverting to the normal 50:50 rule, and make a declaration to HMRC before 6 April 2025 if this is to have effect in the 2025-26 tax year. I ask those questions constructively, on behalf of the Chartered Institute of Taxation, and if the Exchequer Secretary is not able to answer them, of course I will take a written answer by way of letter following this sitting.
In addition to the confirmation on those three points, I would be grateful if the Minister could provide reassurance that HMRC guidance has been specifically and sufficiently clear on these points, so that those affected are aware of the implications of the changes. It is important to remember that when the Government make changes and when we made changes, we were very conscious—I am sure he is too—that the public are aware. He should take all measures possible to ensure that people are aware of these changes, but I appreciate his guidance on what measures are being taken.
Finally, on the case of joint ownership—
It is finally, because we are at 25 minutes past 11, and the Committee will now adjourn.
The Chair adjourned the Committee without Question put (Standing Order No. 88).
Adjourned till this day at Two o’clock.
The Committee consisted of the following Members:
Chairs: Peter Dowd, Sir Roger Gale, Sir Mark Hendrick, † Mark Pritchard
Ahmed, Dr Zubir (Glasgow South West) (Lab)
† Al Hassan, Sadik (North Somerset) (Lab)
† Barros Curtis, Mr Alex (Cardiff West) (Lab)
† Bool, Sarah (South Northamptonshire) (Con)
† Chambers, Dr Danny (Winchester) (LD)
† Cooper, Dr Beccy (Worthing West) (Lab)
† Dickson, Jim (Dartford) (Lab)
† Foy, Mary Kelly (City of Durham) (Lab)
† Gwynne, Andrew (Parliamentary Under Secretary of State for Health and Social Care)
Jarvis, Liz (Eastleigh) (LD)
† Johnson, Dr Caroline (Sleaford and North Hykeham) (Con)
Osborne, Tristan (Chatham and Aylesford) (Lab)
† Owatemi, Taiwo (Lord Commissioner of His Majesty's Treasury)
† Rankin, Jack (Windsor) (Con)
† Stafford, Gregory (Farnham and Bordon) (Con)
† Stainbank, Euan (Falkirk) (Lab)
† Whitby, John (Derbyshire Dales) (Lab)
Chris Watson, Kevin Candy, Sanjana Balakrishnan, Committee Clerks
† attended the Committee
Public Bill Committee
Tuesday 28 January 2025
(Morning)
[Mark Pritchard in the Chair]
Tobacco and Vapes Bill
Clause 126
Audiovisual services and radio broadcasting
Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss the following: Clause 127 stand part.
Schedule 16.
It is a pleasure to serve under your chairmanship this morning, Mr Pritchard.
Clauses 126 and 127 and schedule 16 pertain to audiovisual and radio broadcasting restrictions on tobacco, vapes and the related products that we have been discussing endlessly in this Committee. Although there is a strong argument for the measures from a public health perspective, there may be legitimate concerns regarding freedom of expression and the impact on broadcasters and advertisers —I may be pre empting points my hon. Friend the Member for Windsor will raise.
One of the most compelling arguments for the clauses is their role in protecting young people from exposure to tobacco and vaping products. Studies have consistently shown that advertising plays a significant role in influencing smoking and vaping initiation. Research from Cancer Research UK indicates that young people who are exposed to tobacco advertising are more likely to start smoking, and similar findings have been observed with vaping products, where targeted marketing strategies have contributed to a rise in e cigarette use among teenagers.
By restricting tobacco and vape related advertisements on television, radio and on demand services, the clauses aim to reduce the normalisation of smoking and vaping. The UK has already seen the benefits of such measures in relation to tobacco: since the implementation of the Tobacco Advertising and Promotion Act 2002, smoking rates have declined significantly. Extending similar restrictions to vaping is the logical next step to ensure that history does not repeat itself, with a new generation becoming dependent on nicotine.
Critics might argue that the clauses may have unintended consequences for broadcasters, advertisers and the creative industries. The sector relies heavily on advertising revenue, and restrictions on tobacco and vaping related content may limit potential funding sources, particularly for smaller, independent broadcasters, in an already challenging economic environment. However, as we have seen with the existing bans in relation to tobacco, the public health benefits clearly outweigh the potential issues with the funding that broadcasters could get from vape advertisements.
There is a practical consideration about how the clauses are enforced. We must ensure that broadcasters and on demand services comply with the new restrictions, and that will require regulatory and oversight resources. Perhaps the Minister could give us some idea of how the provision will be enforced, whether that is through Ofcom or some other means. There is also a concern about what I describe as cross border broadcasting. Many streaming services operate internationally, so content produced abroad but accessible in the UK may not be subject to the same restrictions, and if it is, ensuring compliance with UK regulations on the global platforms will present a significant challenge. How does the Minister intend to enforce the provisions in those cases?
This is a complex issue and a balanced approach is necessary, but as I have said, investing in public health campaigns alongside the regulatory measures could help to ensure that the public receive accurate information about smoking and vaping. I therefore support the clauses.
I support the clauses too, although I have a couple of questions. I hope the Minister will be so kind as to answer them.
Clause 126 outlines that part 6 does not apply to independent television or radio services, services provided by the BBC or Sianel Pedwar Cymru, on demand programme services, or non UK on demand programme services that are tier 1 services as defined in the Communications Act 2003. Essentially, they will be covered by Ofcom. Paragraphs (a) and (b) specify exclusions for independent television and radio services regulated by Ofcom, provided they are not classified as additional services. Will the Minister clarify how additional television services and digital additional sound services are defined in practice, and what criteria will be used to classify services at the margins of those categories?
The clause exempts services that are defined as on- demand services under section 368A of the Communications Act from provisions of the Bill. In the rapidly evolving digital media landscape, does the Minister believe that the definition of an on demand programme service is sufficiently clear to encompass emerging service models? Given the rapid growth of online platform streaming services and the desire he previously expressed to future proof the bill, does he foresee current exclusions in clause 126 remaining relevant in the future? Should how these platforms, whether UK or non UK based, are regulated be reconsidered, to ensure they adhere to the same standards as traditional broadcast media in relation to tobacco and vapes while being viewed in the UK? We keep coming to this point—how online services can be used to circumvent measures of the Bill.
My hon. Friend makes a good point, raised in a number of our debates, about future proofing the Bill. There is a big discussion going on about artificial intelligence and how that plays in. I do not know whether my hon. Friend has thought about that, or whether the Minister can clarify how artificial intelligence may be used by the tobacco and vaping industry to get round some of the provisions, and whether the future proofing is strong enough to deal with that.
I know my hon. Friend is very interested in AI. I am sure that if it is possible to do so, these industries will use any means available to them to maintain their market.
The clause extends the regulations from tobacco to cover all vaping products, herbal smoking products, cigarette papers and nicotine products. Given my concerns about children and vaping and the use of nicotine, I think this is a sensible measure, which I support.
It is a pleasure to serve under your chairmanship, Mr Pritchard. Clauses 126 and 127 and schedule 16 contain provisions relating to audiovisual services and radio broadcasting. Clause 126 provides that part 6, which deals with advertising and sponsorship, does not apply to certain categories of television and radio service. That is because these services are already prohibited under the Communications Act 2003.
Clause 127 introduces schedule 16, which amends the Communications Act 2003. The amendments extend provisions in that Act that ban advertising and sponsorship of tobacco products in certain TV and radio services to include herbal smoking products, cigarette papers, vaping products or nicotine products. That ensures that the advertising ban on tobacco in television, radio and on demand programme services is extended to all of those products. In practice, the measure means we will no longer see banned products or promotional material for those products on any of those mediums.
The shadow Minister rightly points out that the services listed in the clause include ITV, independent television and radio, the BBC and Sianel Pedwar Cymru, and on demand programme services—that covers the points that Members have made—and non UK on demand programme services, which are tier 1 services as defined in the Communications Act 2003. I hope that reassures the hon. Member for Farnham and Bordon that it also includes programmes produced and aired outside the United Kingdom that are brought into the United Kingdom.
As a helpful aide mémoire for the Committee, the Communications Act 2003 regulates telecommunications broadcasting. It confers functions on the Office of Communications, a regulator, to oversee the services. The Act puts in place effective rules for the advertising of tobacco on television, radio and on demand services. By amending the Act, we ensure that this existing framework also applies to vaping products, nicotine products, and cigarette and herbal smoking papers. There is no need to reinvent the wheel and add more to the Bill, as we can use the existing provisions in the 2003 Act. I therefore commend the clauses to the Committee.
Question put and agreed to. Clause 126 accordingly ordered to stand part of the Bill.
Clause 127 ordered to stand part of the Bill.
Schedule 16 agreed to.
Clause 128 ordered to stand part of the Bill.
Clause 129 Enforcement authorities Question proposed, That the clause stand part of the Bill.
With this it will be convenient to consider clauses 130 and 131 stand part.
The clause outlines the responsibilities and jurisdictions of enforcement authorities tasked with ensuring compliance with part 6, which covers advertising and sponsorship. Subsection (1) establishes that the enforcement authorities are legally bound to enforce the provisions of the Bill, and subsection (2) contains the definition of an “enforcement authority”. All that sounds very straightforward and sensible, but my question is about funding. If the weights and measures authorities are given an obligation to enforce something but not given the resources to enforce it, they are being given a legal obligation with which they have not got the resources to comply.
Paragraphs 613 and 614 of the impact assessment state that the average trading standards service, of which there are 197, has 9.4 full time equivalent professionally qualified staff. It is assumed that all those staff would need to be familiarised with the policies and all the various regulations once they are passed through Parliament. We have talked about the amount of regulations that will be created under the Bill; staff will need to be trained in all that. In 2024, the cost of such training was estimated at £23,137, but given that the Bill will not come into force until later—we are in 2025 now—that is a moot point. How much does the Minister think training will cost once all the regulations are up and running? Clause after clause of the Bill provides for regulations to be made, which may be done in one go or several, repeating the need for training.
The impact assessment also talks about the cost of training for the Advertising Standards Authority, estimating it to be £1,945. If it costs that to train all the staff from the ASA on a given topic, it suggests the rest of the public sector’s training could definitely be made more efficient. I suggest that the Minister has a chat with the Chancellor about it—I believe she is looking for ways to make the country more efficient, which she has done so far by making businesses not exist—as it seems a little out of kilter, although I was not sure whether it was a dot or a comma. The impact assessment also measures what it believes Ofcom would need to enforce the training under the new measures. It estimates £3,500 for the staff there, but again, does the Minister think that is realistic?
Clause 130 is about the power of Ministers to take over enforcement functions in a specific case. We have talked at some length in previous debates about the potential for abuse of power in such measures. Clause 131, similarly, is about the power of Ministers to take over proceedings as part of the enforcement functions in respect of a specific case. Again, while I can understand the Minister’s desire to be able to take over from a weights and measures authority as a whole if there were to be a problem with the way it was functioning in a specific case, can he give assurances that there would not be any abuse of power in that respect?
I thank the shadow Minister for her questions. The Government are investing over £100 million over five years to boost His Majesty’s Revenue and Customs and Border Force’s enforcement capability to tackle illicit tobacco. In 2025-26 we will invest £30 million of new funding for enforcement agencies, including trading standards, Border Force and HMRC, to tackle illicit and under age sales of tobacco and vapes, supporting them to implement the Bill.
Decisions on funding for trading standards in future years will be made as part of the spending review process, but given our clear commitment to enforcement in the Bill and the fact that we have put down the payment of £30 million for enforcement in the next financial year, I hope hon. Members are assured that we take these matters seriously. We are investing £3 million over two years specifically to enhance the work led by National Trading Standards to tackle under age and illicit vape sales. That work is carried out through enhancing market surveillance and enforcement action on ports, online sales enforcement, and boosting the storage and disposal of illicit vapes. The new funding for 2025-26 will build on this work to tackle under age and illicit vape sales.
The shadow Minister asked how trading standards will use their additional enforcement funding. The crucial point is that we want to boost trading standards’ capacity, to enable the services to conduct more under age sales test purchases, remove illicit products from the market and identify non compliant products and bring them into compliance where possible.
My question was not simply how trading standards will use the money allocated, but whether the Minister feels that the money he has allocated is adequately purposed?
I do, which I have just said. The £30 million in the next financial year to boost the enforcement agencies will meet the needs that the Bill sets out. It is also about boots on the ground and having greater capacity. We will be working with trading standards on this additional enforcement funding to ensure that they increase their capacity and are able to take on the roles and responsibilities that the Bill places on them. We will continue to discuss with trading standards how we can best support them in respect of the measures of the Bill. I commend the measures to the Committee.
Question put and agreed to. Clause 129 accordingly ordered to stand part of the Bill. Clauses 130 to 132 ordered to stand part of the Bill. Clause 133 Power to extend Part 6 and Communications Act 2003 to other products Question proposed, That the clause stand part of the Bill.
Clause 133 gives the Secretary of State the power to extend part 6, which deals with advertising and sponsorship, and the Communications Act 2003 to other products, specifically products that are devices of a specified description enabling a tobacco product to be consumed, such as a heated tobacco device or pipe, or an item that is intended to form part of such a device. It allows the Secretary of State to consult with the required persons and gain consent where required with the devolved legislatures. However, how will the Secretary of State further define that, and can the Minister give us some examples of the types of products that might be included under the power? Could it allow for the expansion of regulation to a wide range of products not originally envisaged in the Bill?
The inclusion of devices and items potentially covers a wide array of consumer products without any clear boundary. What are the specific criteria or considerations that the Secretary of State must use when deciding whether to extend the provisions? Could that lead to arbitrary or inconsistent decision making, depending on the political or public health priorities of the Government of the day? The wording seems to give considerable latitude, but not much clarity on when or how the Secretary of State should exercise the power.
I am very happy to answer the question posed by the shadow Minister. It is a simple answer: we need clause 133 to avoid loopholes. Otherwise, newer products such as heated tobacco—and those products that have not even been developed yet—are in scope of the restrictions, but devices used alongside them could still be used to promote tobacco consumption.
Question put and agreed to. Clause 133 accordingly ordered to stand part of the Bill. Clauses 134 and 135 ordered to stand part of the Bill. Clause 136 Addition of smoke free places in England
I beg to move amendmentusb 11, in clause 136, page 77, line 8, after “regulations” insert “and a local authority may (as respects its area) make byelaws”.
This amendment would extend the power to designate areas as smoke free to certain local authorities, by making byelaws. Any byelaws so made would need to be confirmed by the Secretary of State by virtue of section 236 of the Local Government Act 1972.
With this it will be convenient to discuss the following: Amendment 12, in clause 136, page 77, line 14, after “regulations” insert “or byelaws”.
This amendment is associated with amendment 11. Amendment 13, in clause 136, page 77, line 16, after “regulations” insert “or byelaws”.
This amendment is associated with amendment 11. Amendment 14, in clause 136, page 77, at the end of line 24, insert— “(5) Before making byelaws under this section the local authority must consult any persons the local authority considers it appropriate to consult.
(6) In this section, ‘local authority’ means a county council in England, a district council, a London borough council, the Common Council of the City of London in its capacity as a local authority, the Council of the Isles of Scilly, a combined authority or a combined country authority.”
This amendment is associated with amendment 11.
It is a pleasure to serve under your chairship, Mr Pritchard. Amendments 11 to 14 are intended to extend the power to local authorities in England to designate areas as smoke free by making byelaws. Any byelaws would need to be confirmed by the Secretary of State, by virtue of section 236 of the Local Government Act 1972.What the amendments seek to do is to bring the power to extend smoke free places to a local level, as there are already a number of local authorities that have had success with that approach.
As we know, local authorities are responsible for public health and know their communities well. Eleven councils have introduced 100% smoke free conditions in pavement seating, including in thriving cities such as Liverpool, Manchester and Newcastle. There are many more areas where that approach could have benefits: for instance, in my Dartford constituency, we have a high street with an area where an excellent market takes place every Thursday and Saturday. It is an area not covered by smoke free legislation, but one that in my view could greatly benefit from smoke free areas.
We may come on to this point when we discuss the substantive part of clause 136, but does the hon. Member not see any potential difficulty where there are different local authorities with different regulations on smoke free areas? One of the beneficial simplicities in the Bill is that it applies the same rules across all areas in all the different constituent parts of the United Kingdom. What he is suggesting could potentially add a level of complexity.
That is indeed a good question. Consistency is clearly desirable: it is easier for the public to understand and it makes enforcement easier. However, there are councils already leading the way in that area, and it is a question of the needs of the community covered by that local authority. We know that smoking is particularly concentrated in deprived communities. Local authorities are able to understand what areas are most at risk, work with those communities and arrive at solutions hand in hand with them. We know that public spaces facilitate quit attempts, so it is a great way to do this in areas where the communities consent to that approach. I still advocate the measure as a good way forward.
Obviously I would have liked to have seen outdoor hospitality settings included in the consultation for smoke free extensions to this Bill; however, I know that many Members at the Second Reading expressed relief that that is not in scope for England. Other Members have sought to put the areas identified by the Government on the face of the Bill to rule this out in future, but I disagree with that approach, because we need flexibility.
This is a point I will raise with the Minister as well—just to forewarn him—but, whereas I entirely agree with the future proofing of this Bill in areas such as products and advertising where the market may move on, I do not fully understand why the regulations need to be so open on public places. Public places are not going to change over the next 100 years, so why not define them on the face of the Bill?
Certainly, public spaces are not going to change, but smoking prevalence is; it may be that as, a result of declines in smoking prevalence, the public acceptance of smoke free areas may change. I am sure that the Minister will have a useful contribution to make in response to the hon. Gentleman’s point when he speaks. There is a discussion to be had.
I would be particularly interested to look at the data and modelling and the customer feedback that suggests that hospitality venues are economically dependent on the consumption of tobacco. As we have discussed, currently only 11% of the population smoke—granted, if we are talking about nightlife, that prevalence may be higher, but I certainly believe that families should be able to enjoy eating outside in the summer without being exposed to the risk of second hand smoke. We have seen that smoke free pavement licences are popular with businesses and with the public, particularly families with children.
Giving local authorities a say in how smoke free laws are applied will align with the commitment in the recent English Devolution White Paper to shift any power “away from Whitehall and into the hands of those who know their communities best”.
It is critical that local authorities consult fully on any measures, and particularly closely with the hospitality industry. As I say, there is a possibility that that industry, in specific parts of local authorities where the consultation takes place, may actually agree and feel that this is a sensible step. It is important that local authorities get this right with the right consultation, but they should have the powers to do it.
I remind Members that we are at this point talking about amendments, so any comments should be restricted to those amendments. We can talk about the generalities of the clause later in the debate. It is always helpful to have a reminder of that—for myself as well.
I thank the hon. Member for Dartford for clearly laying out what he seeks to do. I understand that his desire to see a healthy population is driving his good intentions behind this amendment, but I have some concerns. We are creating an offence of smoking in specific places: that requires buy in from the public, because we police with consent, and the public need that knowledge. I visit Newcastle a reasonable amount, and I did not know that there was a rule banning smoking on park benches. I do not smoke, so it did not apply to me in any case, but it is conceivable that others are not aware that Newcastle has local rules.
I am concerned about the consistency of such measures and about people’s awareness of where it is possible to do something; otherwise, we will create criminal offences and fine people large amounts of money for doing something they had no reason to prevent themselves from doing because they had no way of knowing. The Government are also in the midst of reorganising —or trying to reorganise—all the local authorities; if local authorities are going to make such decisions and then be reorganised, that could further add to complexity and confusion for the public.
For people who smoke, we want to limit the harms to their health and ensure they have the opportunity to quit or to minimise those harms. Not everybody has a garden or outside space of their own. If they live in a flat and are a smoker, only being able to smoke in that flat because all the outside spaces are gone will increase the dangers to them, for health and for other reasons. My personal opinion is that these laws, or at least the principle of which spaces may and may not count, should be made nationally—even if there is some local guidance to be followed.
That is why we will come to the principle of which sort of spaces, because at the moment it is any space. It is conceivable therefore that, under the hon. Gentleman’s amendment, a group of local councils could decide to make all outdoor spaces of all kinds smoke free. While I would find that desirable as a non smoker, it would not be good for the overall health of the 11% of people who do smoke.
Looking at the amendments, I can see why the hon. Member for Dartford wants to do this. There clearly could be public health benefits and, as a localist myself, I am naturally sympathetic to having local decisions made as close to people as possible. I think the point I made during the intervention stands, however: the potential for confusion among people who are potentially not from the area, or who are from the area but do not understand the local byelaws, probably makes the amendments unworkable.
My hon. Friend the shadow Minister and the hon. Member for Dartford mentioned that smoking prevalence is higher in places of social deprivation. The hon. Member seemed to be suggesting it would therefore be better to enforce regulations, or byelaws for regulations, in those areas. I can see the public health impact, but we must not ghettoise people who are from lower socio economic backgrounds and who are more likely to smoke, as seen in the evidence. The shadow Minister makes a good point that people who do not have outside space, and who may have children and not want to smoke and vape in their properties because they are rightly worrying about their children’s health, will find that difficult if there are local byelaws in place that prevent it. I think that is especially true with women who smoke.
I thank the hon. Gentleman for giving way. He is making a number of very good points, but will he respond to the notion that smoke free areas are all about making smoking less attractive and so giving people incentives to quit? Does he accept that that might give people incentives to quit and therefore be a significant public health benefit, and worth considering as part of the legislation?
I completely agree that we could very easily ban tobacco and vaping for everybody at every age. That would be the biggest incentive for people to quit. The Government—I think rightly—are not doing that, because they are not looking to criminalise people who are currently addicted to tobacco and vapes. If we are allowing people to do something legally, there should be places where they can do so safely and not harm others, such as their own children. I am sympathetic to the public health argument that the hon. Gentleman makes but, in practical terms, there may be areas where this is a problem.
My final point is really a question for the hon. Gentleman: under what regulations would the local authority be enforcing such byelaws? Would it be through the penalties and enforcement activities in this Act itself —if it becomes law—or would there be some sort of fine or penalty system that the local authority could use? While there are potential fines and enforcement activities on the face of this Bill, if there were local regulations, would these be in line with what is in the Bill, or would there be some other fining system that a local authority could dream up itself?
Taking on board what you said, Mr Pritchard, I just want to build on the point that my hon. Friend made about enforcement—I always talk about enforcement in practice. I want to know how rules will be advertised between different jurisdictions. I think we will end up spending an inordinate amount of money on trying to run a campaign that could have been better spent on helping with smoking cessation or on more practical measures.
My hon. Friend is talking about the enforcement and practicalities of such a move. If we have a national campaign and national uniformity about the areas in which one can and cannot smoke, that will be quite straightforward for people to understand and there will be no real excuses for breaking the rules. If the advertising has to be done locally, it will have to be continuous to reach all the visitors and tourists who come to that town or city.
I absolutely agree, and my hon. Friend makes a powerful point. I would like us to consider this issue when we look at whether to take these proposals any further. I cannot see how we can ensure in practice that everyone knows what is happening without there being a national campaign.
Perhaps I can try to answer a couple of the questions from the hon. Lady and other hon. Members. If a byelaw were enacted, it would need to be well publicised, and there would need to be signage. Clearly, it would be impossible for a local authority to enforce a byelaw against which the defence was, “We had no knowledge of the fact that there was a byelaw.” Therefore, doing those things would be very important, and that would obviously be part of the consultation. The local authority would also have to set out a plan, and it would ultimately have to be approved by the Secretary of State, who I am sure would ensure that it was adequate. In terms of the penalties, the local authority has the power to set out its own penalties, but only within the quite tight legal framework set out in the Local Government Act. It would be for the local authority in this instance to define the level of penalty and what was proportionate.
I thank the hon. Member for clarifying that point. Many Members would prefer that local councils were dealing with potholes rather than advertising those different spaces, but I thank him for his amendment and his proposal.
Amendment 14 defines a local authority as “a county council…a district council, a London borough council, the Common Council of the City of London in its capacity as a local authority, the Council of the Isles of Scilly, a combined authority or a combined country authority.”
By the time we get to next summer, Lincolnshire will probably have district councils, a county council and a mayoral authority—I do not agree with having a mayoral authority, because I think that is too many tiers of government, but that is an aside. What if those authorities do not agree? If we give them all the power to make regulations, they could all make different regulations based on different opinions—as is currently the case in Lincolnshire, the various authorities are not always under the control of the same political party.
I am grateful to my hon. Friend the Member for Dartford for bringing this issue before the Committee. As we have heard, amendment 11 would introduce a power for local authorities to make byelaws relating to the designation of additional smoke free places in England, which would sit alongside the Secretary of State’s power to make regulations in the same regard.
As we know, the Bill expands the Secretary of State’s powers to create additional smoke free places at the national level. In England, the Government have already indicated that we intend to extend the smoke free designation to outdoor places including children’s playgrounds and outside schools and hospitals, but not to outdoor hospitality settings or wider open spaces such as beaches. The reforms we are setting out in the Bill will be subject to full consultation, and we want to hear the views of people from across the country to ensure that we get them right.
As drafted, the Bill gives no additional powers to local authorities. However, they have existing mechanisms for designating certain spaces as smoke free. As we have heard, areas such as Manchester, my home city, have already used pavement licensing provisions to ensure that people have smoke free options when they consume food and drink in certain locations, and that works well. Some local authorities have implemented public space protection orders to prohibit smoking in certain areas. For example, the London borough of Enfield has used a public spaces protection order to restrict smoking within the boundaries of children’s playgrounds. Of course, that will be obsolete should the consultation for the national scheme extend to children’s playgrounds, as we intend it to.
I thank the Minister for making those interesting points. Can he clarify whether powers such as those enacted in Enfield create a criminal offence?
We want to ensure that people who are smokers are not criminalised. Public space protection orders do potentially go down the criminal route. We want to ensure that that is not the case, which is why the Enfield scheme would of course be obsolete under the later provisions—which we are going to discuss today, hopefully—in relation to extending national outdoor smoke free places.
It is reassuring to hear the Minister talk about consulting before bringing in smoke free places in specific public outdoor areas. Personally, as a non smoker and someone who is very concerned about the public health impacts of passive smoking, I think we must also be mindful of the need for evidence based interventions, and of the trade offs. A good example is that of some fantastic pubs around Winchester and the Meon valley that have maybe two beer gardens, one to the side and one to the back. There would genuinely be no public health risk if smoking was permitted in one of the beer gardens and not the other.
The Liberal Democrats want reassurance on that. One of the reasons we tabled our amendment to clause 136, which is coming up, is simply to get assurances that the hospitality sector will not be impacted by any of these decisions, especially if the public health benefits are negligible.
Order. We will discuss the specifics of the hon. Gentleman’s amendment when he moves it.
I suspect we are straying off the measures before us, Mr Pritchard, but I assure the hon. Gentleman that consultation is a statutory duty in this Bill. Were the Secretary of State, or indeed Welsh, Northern Irish or Scottish Ministers, to seek to change the scope in the future, they would have a duty at every stage to consult further. I hope that reassures the hon. Gentleman.
I was talking about Enfield and its public spaces protection orders. It is of course for the local authority to determine whether a PSPO is appropriate and that the legal test for implementing a PSPO is met, along with completion of the relevant consultation requirements. Nottingham has created a voluntary smoke free zone at events, especially those where children are present, and it introduced a smoke free play park policy in 2015. Other local authorities, such as Oxfordshire county council, have introduced voluntary smoke free school gates policies. Given the options already available to local authorities and the national reforms introduced through this Bill, which we will debate further, neither the Government nor I think it is necessary to grant these byelaw making powers via the Bill.
In answer to a point that the shadow Minister raised, which I hope to answer for my hon. Friend the Member for Dartford, legislation sets out all the different types of local authority. Enforcement in terms of the requirement to police any changes would appertain to the particular local authority, because it would be on that local authority’s land that the measures would apply. For example, in a two tier area, if the county council as the highways authority deemed that pavement licensing were to be introduced, it would be for the county council to enforce its own measures; if a district council brought in measures in a park for which it was responsible, it would be for the district council. I think that is quite a simple explanation.
I understand that we have a complex jigsaw of local government, but it is for the particular type of council or authority that introduces a measure to enforce it. For example, the pavement licence in the City of Manchester is for the City of Manchester to enforce—not Andy Burnham as the Mayor of Greater Manchester, or indeed the Greater Manchester combined authority. That is pretty simple.
My question was not so much about the enforcement, which is defined in the Bill as the local weights and measures authority. Amendment 11 says that a local authority may make byelaws. The local authority that may make these byelaws includes the whole range of county councils, district councils and combined authorities, implying that, whoever is enforcing it, those that could make a byelaw could overlap and have contrary views.
Obviously, if a local authority introduces byelaws, as the City of Manchester has done in respect of pavement licensing, it is for that local authority to ensure that those byelaws are adhered to. Of course, in that case, the weights and measures authority is the City of Manchester, so I suppose that makes it easier.
These powers are already being used. Local authorities are already designating areas, whether it is for pavement licences, public space protection orders or just deeming that land within their own responsibility is smoke free. We do not believe that the amendments are necessary. I kindly ask my hon. Friend the Member for Dartford to withdraw them.
The Minister has given a very comprehensive response. I suspect that the suggestion that this might be a way forward might come up in the consultation when that happens in the coming months. For the moment, I beg to ask leave to withdraw the amendment.
Mary Kelly Foy, did you want to speak?
indicated dissent.
No. Okay. That is fantastic. No problem. [Interruption.] I mean it is fantastic and we can hear you on another clause or amendment, just to be clear.
Amendment, by leave, withdrawn.
I beg to move amendment 4, in clause 136, page 77, line 8, leave out from “smoke free” to the end of line 15 and insert— “a place in England that is— (a) an NHS property or hospital building, (b) a school, college or higher education premises, (c) a children’s play area or playground, including outdoor public areas and frontages adjoining or surrounding such premises or designated areas.”.
This amendment would specify which places the Secretary of State has power to designate as additional smoke free places in England on the face of the Bill.
With this it will be convenient to discuss the following: Amendment 95, in clause 136, page 77, line 12 at end insert— “The Secretary of State may only make regulations designating external or open spaces as smoke free in England outside— (a) an NHS property or hospital building, (b) a children’s playground, or (c) a nursery, school, college or higher education premises.”.
This amendment restricts the Secretary of State to only being able to designate open or unenclosed spaces outside a hospital, children’s playground, school or nursery. Amendment 94, in clause 136, page 77, line 21, at end insert— “The Secretary of State may designate a place or description of place under this section only if in the Secretary of State's opinion there is a significant risk that, without a designation, persons present there would be exposed to significant quantities of smoke.”.
This amendment would re instate existing section 4(3) in the Health Act 2006.
It is a pleasure to serve under your chairmanship, Mr Pritchard. To reiterate what I said before, the Liberal Democrats’ aim is to avoid unintended consequences that really damage the hospitality industry that we totally support. Amendment 4 would limit the places where we ban smoking or designate smoke free to an NHS property or hospital building, a school, college or higher education premises, and a children’s playground or play area. We are not against public health measures; we are trying to ensure that we do not end up with provisions that are a bit over the top and damage hospitality businesses.
I shall speak to amendments 95 and 94, which stand in my name. Amendment 95 is similar to the amendment moved by the hon. Member for Dartford a few minutes ago. Members will remember that earlier in the summer the Labour Government suggested that they would include hospitality venues within the scope of outside spaces, which led to pushback from a number of sources, mostly the hospitality industry. Speaking to Sky News on 5 November, the Secretary of State said that it was “a leak of a Government discussion”, but that it had promoted “a really good debate about whether or not it would be proportionate”.
He then said: “I think people know that the UK hospitality industry has taken a battering in recent years—”.
I agree with the Secretary of State on that. Covid-19 certainly challenged the hospitality industry. The previous Government supported it through business loans, reduced taxation and furlough schemes. Now, just as the industry is getting back on its feet, this Government have battered hospitality providers by raising national insurance contributions, increasing the minimum wage for young people, increasing business rates, introducing the deposit return scheme, and nearly doubling business rates for small businesses. They are indeed taking a battering; we can agree on that. In that Sky News interview, the Secretary of State also said: “we do not want to add to their pressures, so we are not proposing to go ahead with an outdoor hospitality ban at this time”.
That was in November, but does he still mean it now? How will we know?
The challenge of this clause is trust. The Prime Minister has talked about trust. Before the general election, the current Secretary of State for Environment, Food and Rural Affairs said, at the Country Land and Business Association conference, that Labour had no intention of changing the rules on agricultural property relief—but they have. The Government’s manifesto said that they would not increase national insurance on working people —but they have. On 11 June, Rachel Reeves told the Financial Times that she had no plans to increase capital gains tax—but she did. Labour said that it would not make changes to pensioner benefits, but then removed the winter fuel allowance. So there is no trusting that this Government will do what they say they are going to do and not do what they explicitly say they will not. I hope the Minister understands my reasoning.
It is interesting that the Liberal Democrats have a similar amendment to the Conservative amendment on this topic. As I said before, people need some form of open space and not everyone has a garden. There is some confusion about hospitality venues. For example, some pubs have a kids’ play area; will that be treated as a play area within the scope of the regulations, or will it be a hospitality area? Under the current statement, the Secretary of State will not include play areas, but the powers under the clause, which we will come to as a whole, give wide scope for the Minister and the Secretary of State to designate virtually anywhere as smoke free, with criminal sanction for those smoking or vaping. The Minister and the Secretary of State have said that their only intention is to use these policies for NHS properties, hospital buildings, children’s play areas and education facilities. This being the case, I cannot see why the Minister would not be happy to have that on the face of the Bill. It is the stated intent. I am sure the Government will understand my point about trust.
There are a few minor differences between the Liberal Democrat amendment 4 and the Conservative amendment, mainly in that the Conservative amendment includes nurseries and the Liberal Democrat amendment defines play areas and playgrounds, as opposed to simply playgrounds. These are relatively small differences other than the addition of nurseries, which is beneficial that is where the smallest children are. Clearly smoking in a nursery school is an antisocial behaviour, so it would make sense for them to be included.
Amendment 94 states that: “The Secretary of State may designate a place or description of place under this section only if in the Secretary of State's opinion there is a significant risk that, without a designation, persons present there would be exposed to significant quantities of smoke.”
The Health Act 2006 states that the Secretary of State has to be clear, in his own mind, that there is a risk of high levels of smoke if he is going to ban smoking, so it is a measure of proportionality. Smoking in an outdoor space, miles from anywhere with nobody about, exposes no one but the smoker, making it slightly safer to smoke outside than inside for both the smoker and the people around them.
Why did the Minister choose to remove the “significant smoke” measure from the legislation? Does he feel that there is no significant amount of smoke to be inhaled by somebody who is in an outdoor space with somebody else? What is the chief medical officer’s advice on the amount of smoke that is likely to be inhaled by someone in an outdoor space alongside or nearby someone who is smoking? I understand that there will be a duration issue—how long the person is sat there, how long the smoker is smoking for and how many cigarettes they have, how close the person is and how windy it is—but will the Minister explain why he chose to remove that measure?
I agree with my hon. Friend the shadow Minister. It seems strange that the Government want to have such wide ranging powers in this area. Unlike other parts of the Bill, where technologies and such may move on and where I appreciate the need to future proof, here it is very clear. I do not think that at some point in the future we will believe that smoking in playgrounds, or smoking in a field with nobody else around, are better or worse than they are now.
I have a lot of sympathy for the Liberal Democrats’ amendment 4 and our amendment 95. As my hon. Friend pointed out, the amendments are relatively similar, if not word for word the same. It almost takes us back to coalition days in 2010—let us hope that does not happen too often—and shows that His Majesty’s Official Opposition and the Liberal Democrats have significant concerns. While the Minister and his colleagues have said that they will not extend a smoking and vapes ban to hospitality venues, there is a lack of trust on our part, because even if it is not in the current Minister or Secretary of State’s mind, a future Secretary of State may be minded to put such a ban in place. That is why the amendments tightly define exactly where the smoke free areas could be.
It is obvious that we do not want people smoking in children’s playgrounds, nurseries, schools or higher education premises. We have had some debate about this on other clauses, but I personally believe that we should not be smoking in NHS properties either. None the less, to return to a point I made previously, if we are going to permit people to do something within the law—people born before 1 January 2009 if we are talking about smoking and everybody over the age of 18 if we are talking about vaping—they must have somewhere safe to be able to do it.
The point of the clause is to address the impact of smoking and vaping on others. I take the shadow Minister’s point that clearly, if someone is smoking in a playground, it will have a greater impact on other people than if they are standing in the middle of a park or field with nobody else around. There needs to be an element of proportionality. As the shadow Minister and the hon. Member for Winchester said, we do not want to do anything that could harm our already stretched hospitality industry, which is under extreme pressure. If the Minister or Secretary of State were minded to start imposing bans in hospitality, that would have a significant impact on the hospitality business. I support the two amendments.
This is an interesting debate, and I want to add some thoughts from a public health point of view. There is a balance to be struck in Government between supporting the hospitality industry and making sure that we are being fair and proportionate and encouraging businesses. We should also be mindful of public health evidence about passive smoking in an area—for instance, outside a pub where there are multiple people and some are passive smoking. It is clear that the Government, the current Secretary of State and our Minister have taken the proportionate response that the law will not extend to public spaces with hospitality. We should be mindful, however, that history does play out in public health and that people’s attitudes about what is acceptable does change. Therefore, leaving this issue open to allow that debate to continue within our political sphere is absolutely fair and proportionate.
The hon. Lady makes a very good point, but it is almost one that supports mine—although she said she believed that the current statements from the Government are proportionate, I can already hear in her voice that actually, she would like to see this provision extended to those areas.
The hon. Gentleman raises a fair point. I am perhaps a public health consultant first and foremost and a politician second, but I do appreciate that in politics, we have to find fairness and balance and support people in their businesses, as well as being mindful of their health. As a public health consultant, I am looking at people’s health first and foremost, but I think this is the right place in Government to have this sort of legislation and this debate, so I am supportive of what is in the Bill. It is for people like me to make the argument that passive smoking outside hospitality, for example, is not the way forward, but as a politician, I absolutely appreciate that I have to be mindful of businesses. I therefore maintain that the proposals are balanced, but I take the hon. Gentleman’s point that I am a public health consultant, and I declare that as an interest.
I thank the hon. Lady for her clarification. I have great respect for her public health abilities and knowledge. I accept the points that she made, but Opposition Members feel that including in the Bill areas that will potentially be consulted on being smoke free is proportionate to ensure that there is not overreach. I know that if the amendments are accepted and, at a future point, attitudes and science change, she will be a doughty campaigner to have the law changed, and I am sure that she will achieve it, if that is the way she wants to go.
In response to what my hon. Friend and the hon. Lady the Member for Worthing West are saying, as a doctor, I have a lot of sympathy with her position. Certainly, if I take my children out for a meal in a restaurant and we sit outside in the summer, having a lovely day in the beer garden, and along comes a family or another group of people who sit and smoke, I dislike that. Whether it should be made illegal is a different matter, but it is something that I do not like.
As my hon. Friend said, there is a balance between enabling someone to do something that we have decided will be legal—that is, someone who is born in the right timeframe to be able to smoke—and giving them somewhere safe to do so. Over time, I suspect the measures that the Bill as a whole grants will lead to a reduction in smoking, which, of course, is its intention. As smoking becomes less prevalent, it is likely that smoking in front of children, particularly in outside hospitality spaces or in other places, will become less socially acceptable. We saw hospitality bring in non smoking areas in the past.
The hon. Member for Winchester talked about having two different beer gardens in the same pub, one for smoking and one without. It is within the capacity of any given hospitality business to choose, as smoking becomes a minority and antisocial pastime, not to allow it within their facility, and to police that by throwing people out. It is also possible for individuals to choose not to attend a beer garden of a pub where smoking is allowed. To some extent, therefore, the ability of people to choose and vote with their feet, and the desire of the market and hospitality industries to maintain their custom, will surely have some effect on this over time.
The shadow Minister is right. I do not want to stray into the main part of the clause, which we will come to, but one of the key reasons behind the Liberal Democrats’ amendment 4 and our amendment 95 is that we want to protect areas that may be negatively impacted from a business point of view, if the Government were to bring in restrictions on smoking in outdoor areas—and it is not just smoking, but smoking and vaping. I agree with the shadow Minister that if I go out with my children and sit in a pub beer garden or restaurant, I find it absolutely disgusting if there are people smoking around me. I generally vote with my feet, as I am sure other punters do, and do not go back to that pub or restaurant.
What we are suggesting allows the market to decide. If pubs or restaurants allow smoking and vaping in their gardens, they will have to balance the customers who want to smoke and vape against those who do not want to breathe in that smoke. They will have to make a business decision about whether they ban smoking and vaping in their gardens, which they are perfectly entitled to do for their premises, as they can have a dress code or any other restriction as long as it does not break any equalities regulations. However, when the Government start interfering in private business, we go down a slippery slope, which is why our amendment and the Liberal Democrats’ amendment are important.
Amendment 94, as the shadow Minister says, reinserts a proportionality clause that was in the previous Bill. I would be interested to understand from the Minister why that has been taken out. He said that there is no safe level of smoking, which I agree with. I would probably also agree with him were he to say that there is no safe level of passive smoking either. To me, it comes down to vaping, where the science is not yet settled. I know that the hon. Member for Worthing West will pop up in a minute and tell me about the precautionary principle, as she has so many times in this Committee, but some proportionality needs to be reinserted into the Bill so that the public understand the differences and the dimensions of what is more harmful.
It is a pleasure to serve under your chairmanship, Mr Pritchard. I rise to speak to amendments 4, 95 and 94; as they are very similar, my comments will apply in the generality. It is disappointing to hear the shadow Minister’s cynicism about the commitments made by the Minister at the Dispatch Box.
I was merely giving examples.
She may well have given a few examples—I can think of a litany of examples from the previous 14 years of Tory Government. However, that would stray from the amendments, and as we do not have the time, I will not indulge the Committee with that. But I would suggest that that cynicism is not merited because, as the Minister and his colleagues in the Department of Health and Social Care have shown in these sittings—
Will the hon. Member give way?
I will.
I entirely agree with the shadow Minister’s point about broken promises from the Labour Government, but I do not think she was saying, and I certainly was not saying, that we currently hold any untoward view of the Minister or the Secretary of State. However, does the hon. Gentleman not agree that we do not know who the Secretary of State or the Minister might be in future Governments, and that they might not wish to be beholden to previous statements? That is why it is so important to make sure that we are clear about which open spaces we are talking about when we restrict people’s right to smoke and vape in them.
I am grateful for that intervention. I point the hon. Member to proposed new subsection (4), which reiterates that the Secretary of State “must consult” before any such regulations can be made. I am sure that will assuage his concerns about whoever the future Secretary of State may be, whether they are from this side of the House or, God forbid, the other side in a few decades’ time.
I will point out a couple of issues about the drafting of the amendments. Although I understand the position of Opposition Members, I think the proposals inadvertently cause issues and risk causing more confusion than may have been intended. For example, does “an NHS property or hospital building”
include private healthcare providers that are undertaking NHS work either on NHS premises or off site? What about subcontractors? When the amendment mentions “a nursery, school, college or higher education premises”, are we talking about where premises have had to be vacated because of the RAAC—reinforced autoclaved aerated concrete—crisis and where children are being taught in portacabins in a council car park, one or two miles away from the original site? These definitions are lacking and may inadvertently cause gaps in the application of the measures, if the amendments were successful. What about premises used for youth prisons? Should that be captured or not, given what was said about protecting children from the dangers of smoking?
Notwithstanding the fact that I understand the intention behind the amendments and what Opposition Members have said, I think the drafting may inadvertently cause issues and undermine what the Minister has said, both here and at the Dispatch Box, about the parameters in which this set of regulations would be brought in. Those would be underscored by consultation and the commitments that have been made at the Dispatch Box. Although I appreciate and understand hon. Members’ comments, I suggest that the amendments are not necessary, for the reasons I have outlined, and I would encourage them, if the amendments are not withdrawn, perhaps to vote against them if they are pushed to a Division.
I respect the points made by the hon. Member for Cardiff West, because I understand that we do not want any unintended consequences. However, I would counter that by saying that although we perhaps need better definitions—that may be something we can consider—clause 136, as drafted, is incredibly wide, and any of the assurances that have been given to hospitality are merely words. There is absolutely no carve out for the hospitality sector as this stands.
As much as I think the Minister is honourable in his intentions, unfortunately, we all know that we can go only on the law in front of us in black and white, and there is currently no security for the hospitality sector in this regard. We need to be incredibly clear about this with the hospitality sector, and we need the exclusion. One of the bigger concerns is that if people are not able to smoke—perhaps in a pub garden—it will force them into their homes, where they are actually more likely to drink and smoke more because they are not within that limited capacity of being out in public. We have to think about what the dangers are. Are we actually forcing people to take up worse habits in their private residence than if we allow them a little bit of flexibility in an open space?
I have a question about NHS properties generally. I appreciate that we want smoke free places and that one wants to go into hospital and walk past people smoking, but I worry about those who have an addiction. Where do they go if they need to smoke, as they would if they are going through a process of cessation? What ends up happening as a result of all these provisions is that the smokers will just be forced down the road away from the property, but that has not really addressed the issue. We have just pushed the problem a few metres away.
We need to think in the round about how we best achieve our aim, how we deal with addiction, and how we clean up the hospital environment in a balanced and proportionate way. Perhaps the Minister has some other ideas, but I do not like the idea of just pushing some smokers down the road, rather than dealing with the issue at hand.
I am grateful for our debate on amendments 4, 94 and 95. I am even more grateful that a lawyer, my hon. Friend the Member for Cardiff West, is sitting behind me—as a non lawyer, I note that it is always good for somebody to have one on their side. Indeed, the hon. Member for South Northamptonshire is a lawyer as well; in matters of law, there are always disagreements.
Amendments 4 and 95 would remove the power in the Bill to extend smoke free places to any area that is a workplace or open to the public, including outdoor spaces in England. That would be replaced with a limited power to extend smoke free places only to healthcare and education settings and to playgrounds. Amendment 94 would reinstate the test present in the Health Act 2006, which requires, in the Secretary of State’s opinion, a significant risk of exposure to significant quantities of smoke before being able to designate an additional place as smoke free.
On extending smoke free places, as we heard from a range of public health experts, evidence for the harm from exposure to second hand smoke is well established. People exposed to second hand smoke are at increased risk of cancer, chronic respiratory disease and cardiovascular disease. The World Health Organisation estimates that, every year, second hand smoke kills up to 1.3 million people worldwide.
The science tells us three things about second hand smoking. First, it poses a risk to health even outdoors. Secondly, it is particularly dangerous for vulnerable people, including children, pregnant women and those with pre existing but usually invisible health conditions, such as asthma and diabetes. Thirdly, in some public settings, exposure to second hand smoke can be high. If you can smell it, you are inhaling it.
It is important that the powers are broad, so that the Bill is appropriately future proofed, as we have discussed in relation to other measures in the Bill.
The Minister may come to this, and I am sorry to keep banging on about it, but I do not understand the future proofing element of the clause and, therefore, why he opposes our amendments. Unless we have colonised Mars, surely there will be no new definition of an open space, or new wonderful industry way of claiming there is one. We know what open spaces are, and they are not going to change, so what is the future proofing element?
The future proofing element is if the science changes or, more likely, that over time public attitudes change. Smoking is already a minority pastime, and we expect that, in 25 years’ time, the prevalence of smoking among those aged 30 or below will be near to zero, so we will want to protect people from the scourge of second hand smoke in other places. But that is a debate for other Ministers in other Sessions of other Parliaments at some stage in the future.
I do not want to tie the hands of my successors, so that they have to find a slot before the House for primary legislation to make simple changes. A far more practical and workable mechanism is for my successors to be able to come to the House to say, “The evidence has changed”, or, “Public opinion has changed”, and, “We now seek to consult the outside world on introducing further areas under the powers in the Bill”, and then to lay secondary legislation following the statutory duty to consult. Other areas can therefore come within the scope of the Bill.
I take the Minister’s point, but there is only a requirement to consult, so actually, completely unlimited powers have been given to make this change. We are trying to argue that we want the spaces to be clearly defined. It is important and right that we should come back to Parliament to make a change at a future point, if we want to extend the Bill further. But that will only be consultation, based on the current drafting, and a change could be pushed through regardless. The Labour party says that it is trying to support and back hospitality, so making this absolutely clear on the face of the Bill at this point will give hospitality the reassurance that it needs. I cannot see why there is any objection to more clarity, rather than overarching and wide powers. We are binding the hands of future generations and telling them that they cannot smoke and cannot vape—that right has gone—and then, on the other hand, we are saying, “I cannot bind the hands of my future successors”. We need reassurance and clarity for hospitality, and that is not in the Bill.
I have at no stage said that Ministers would not come back to Parliament. What I have said is that we should not be seeking to find one of those rare things—a slot in a King’s Speech for primary legislation—for something as simple as consulting on further areas.
I also remind the hon. Lady that the powers in the Bill are UK wide. They do not give just the Secretary of State, or me as the Public Health Minister, the powers to consult in relation to England; they give the same powers to the Scottish Health Minister, the Welsh Health Minister and the Northern Irish Health Minister to consult and to bring forward secondary legislation on extensions following that.
We have been absolutely clear that the Government intend, in relation to England, to consult on schools, hospitals and children’s playgrounds—nothing else. It is those three things. That is our intention. The level of detail will be subject to the consultation. If in the consultation it is deemed that the measure should be extended to other NHS facilities beyond hospitals or to nurseries as part of an education setting, that will be entirely a matter for the consultation, and secondary legislation will therefore be brought to this House. But it is our intention—I cannot make it any clearer—that the three areas this Government are going to consult on are hospitals, outside schools and children’s play areas. We are not going to consult on hospitality. That is clear.
My counterparts in other parts of the United Kingdom may well come to a different decision on which areas to consult on. They may not consult at all.
I thank the Minister for his clarity about what he and the Secretary of State are going to consult on; I take him at his word, of course. But is he not now demonstrating the concerns that we have? Other parts of the United Kingdom will potentially consult on retail. Therefore, the amendment is absolutely necessary. Although I am an England Member of Parliament and care mostly about the good people of Farnham, Bordon, Haslemere, Liphook and the surrounding villages, I have a wider duty as a Member of Parliament to ensure that the hospitality businesses of the United Kingdom of Great Britain and Northern Ireland are protected. I am afraid that the Minister has really worried me with what he has just said.
I can speak only for England, but I am legislating for the United Kingdom with the permission of Health Ministers. It may well be that Health Ministers in other parts of the United Kingdom decide not to consult at all. In Wales, for example, they already have the coverage of all the areas that we are going to consult on in England.
The hon. Member for Farnham and Bordon says he is now even more worried. Well, I tell him this: worry not, because his amendment relates to England only. If he is so mithered about the rights of the Welsh to consult Welsh business on Welsh matters, he should have put Wales in his amendment. If he so bothered about the rights of the Scots to consult on Scottish matters with Scottish business, he should have put Scotland in his amendment. If he is so bothered about the rights of the Northern Irish to consult Northern Irish business about Northern Irish matters, he should have put Northern Ireland on the face of his amendment. He doth protest too much, Mr Pritchard!
The hon. Gentleman has actually made my case for why these measures are proportionate: they cover the whole of the United Kingdom and it will be down to Ministers in the respective parts of the United Kingdom to decide who they will consult, why they will consult and what areas they will consult on. But as far as England is concerned, I cannot be any clearer: hospitality is out of the scope of our consultation. We will consult on three things: hospitals, schools and play areas.
I thank the Minister for giving way, although I would point out that it was not my hon. Friend the Member for Farnham and Bordon’s amendment at all.
But he supported it.
He is supporting it, but the Minister asked why my hon. Friend did not include things in it. The answer is that he did not write it. The amendments were written by others, one by the Liberal Democrats, and supported by him, which is not the same thing.
The Minister will no doubt have caused concern for the people in hospitality industries in Wales, Northern Ireland and Scotland who are following proceedings today. Could he tell the Committee a bit about the discussions he has had with his counterparts? Have any of them indicated to him their intent regarding hospitality areas in their designated parts of the United Kingdom?
I certainly can. I have had umpteen conversations with Health Ministers from across the United Kingdom, and none of them has indicated to me that they intend to extend this to hospitality. But the point is that, as Ministers in their own legal jurisdictions, it for them to decide who they are going to consult and on what basis they are going to consult. In terms of the powers in this Bill, which areas they want to extend—if any—is a matter for them. It is not a matter for me or for this Parliament.
We are merely legislating to give those Health Ministers the tools; if they wish to go beyond the scope that the English Ministers are setting out, it is their right to do so. That is the devolution settlement. But they will, of course, have the statutory duty to consult, and they will, of course—I would imagine—want to work with businesses, in Northern Ireland, in Wales, or in Scotland, to make sure that whatever measures they bring forward are right and workable, just as we would in the Department of Health and Social Care, should we decide, at some stage in the future, to go further again.
I doubt whether the Minister has provided a huge amount of reassurance to the hospitality sectors in those jurisdictions.
I want to pick up on a point made by the hon. Member for Cardiff West in his intervention about prisons. As far as I can tell, closed prisons are smoke free environments—that is already the case both inside and outside—but I understand that prisoners in closed prisons are allowed to vape, including in their cells, where they may be vaping near other prisoners who may not wish them to have that choice. We are depriving people of their liberty for good reason when sending them to prison, but we should not be exposing them to chemical vapour as part of that if they are not vapers themselves.
Could the Minister talk to us about the discussions he has had with Justice Ministers about how provision is made for the public health of those currently in prison?
I am grateful to the shadow Minister, who is now making my case perfectly for why we need to have the regulations as we do. It may well be that, at some stage in the future, a Public Health Minister, or indeed the Secretary of State, having had conversations with and guidance from the Ministry of Justice, seeks to quickly and simply extend provisions within the prison estate. Were the hon. Lady’s amendments to pass, the ability to do that would not be in the Bill.
We have had conversations with Ministers across Government. This Bill has been subject to the usual write around, so it has the collective support of the Ministry of Justice. The details of which areas would be in or out of the scope of different measures within the Bill will be a matter for the regulations and for consultation. With that, the shadow Minister has precisely made the case for why having things prescriptively in the Bill ties the hands of Ministers.
The Minister is suggesting that to be able to restrict access to these products in prisons, he needs to have a wide scope within clause 136. Given that prisons are already smoke free areas, that surely cannot be the case.
No, but the point the hon. Lady is making is about what conversations Ministers have had with other Ministers to extend the scope, to protect the rights of others and so on. It is precisely for that reason that the Bill is drafted as it is. At some stage in the future, a Government Minister in another Department may well decide that they want to extend the scope, using the powers we are talking about. Under her amendment, we would then have to find a slot in primary legislation to amend a piece of primary legislation. That is precisely why her amendments are unworkable.
The mechanism in place would allow a consultation on an extension; following consultation, secondary legislation would be debated as part of the affirmative process—there would be a debate, a discussion, and a vote in Parliament. That is precisely why the amendments are unworkable, and I call on the Committee to resist them.
I move on to the removal of the test in the Health Act 2006. That is to enable the Secretary of State to more easily make regulations designating outdoor spaces as smoke free, but only where such a space is a workplace or open to the public. Reinserting the test would conflict with our intention to extend smoke free status to places I have mentioned—for example, children’s playgrounds probably do not meet the requirement of there being significant risk of significant quantities of smoke. However, making them smoke free would almost certainly protect some of the most vulnerable.
Since 2006, the evidence base for harms of second hand smoking has evolved. It is therefore necessary to update the current legislation, as clause 136 does, to provide more flexibility should the Government wish to designate additional smoke free places in future.
The Minister is making a reasonable point. However, the evidence can change on what constitutes a significant amount of smoke—in the past, people may have believed that someone had to be smoking in order to come to harm and then that someone could also come to harm in an enclosed indoor environment with someone smoking. It may be that the evidence now shows that even being in proximity to someone smoking outdoors—the fact that you can smell it means you are breathing it in—means you are coming to harm on some level. But does the amendment not account for that with the word “significant”? Amendment 94 says: “if in the Secretary of State’s opinion there is a significant risk that, without a designation, persons present there would be exposed to significant quantities of smoke.”
A significant quantity of smoke may in the past have been considered to be quite a high volume, but now might be a much lower volume. The flexibility the Minister is seeking is already provided for in the amendment.
The shadow Minister would probably have a large degree of sympathy—at least one of her Back Benchers less so—with our updating the Health Act 2006 to allow us to take action to make more places smoke free. We think that is right. We now have the ambition to make the whole United Kingdom smoke free, and this is part of that effort.
Some areas that we are considering, such as children’s playgrounds, may not meet the existing test, but we want to extend the provision to those areas for all the reasons that I think the shadow Minister supports. Therefore, we think that it is right to remove the provision from the 2006 Act. It is obsolete, given our aim to make the UK smoke free and to give the Secretary of State and Ministers in Wales, Scotland and Northern Ireland the ability, from time to time, to review the evidence, perhaps come to the conclusion that areas currently out of scope should be within scope, to consult, which is a statutory duty, and then to bring in other areas through secondary legislation.
It is really important to recognise that, if we are serious about our ambition to make the United Kingdom smoke free, we must have that flexibility. Tying the hands of Ministers—whether in England only, as is the shadow Minister’s intention, or across the United Kingdom—would run counter to our desire to be able to act with some degree of speed, should the evidence or public demand be there in future, or to extend the scope. Those are discussions for the future. We are clear that we will consult on three areas, and hospitality is not one of them.
The Minister is being generous with his time. He knows my thoughts on smoking and vaping, particularly in relation to children, and how important I think creating a smoke free and nicotine free generation is—although he does not share the second part. He is talking about how the Secretary of State needs to be able to move with the evidence. I completely and utterly agree with that, but the clause says that there is a significant risk that without designation, persons present will be exposed to significant quantities of smoke.
I support the addition of the smoke free legislation for spaces like playgrounds. If a playground were to be included, the Secretary of State could quite easily justify that by saying that even seeing someone smoking would encourage children to smoke, particularly if it is their parents, and that therefore it is a sensible action to take.
The words—drafted, I believe by the Minister’s predecessors—are “exposure to significant quantities”. “Exposure” does not necessarily mean breathing it in; children could be seeing it across the playground. “Significant quantities” does not necessarily mean a quantity enough to do them harm. If they cannot see it, they are not being exposed to it and it is not doing them harm, why would we want to stop it happening?
The point is that that is open to interpretation; that now runs counter to our ambition to have a smoke free United Kingdom. We have put in place a much more flexible and workable measure. The measure from 2006 was right for 2006, but it is not right for 2027, when we hope to introduce the Bill. That is why we are looking to the measures in the Bill rather than the measures as they stood in 2006.
Lastly, I remind the shadow Minister that her amendments apply only to the clause in the Bill that relates to England. If we agreed to them, the powers in England would not be consistent with the powers in the rest of the devolved jurisdictions across the United Kingdom. This is a UK wide Bill that provides a consistent legislative framework for the whole of the United Kingdom—all four nations—while allowing devolved nations to go further on subsequent regulations if they so wish. For these reasons, I ask hon. Members to withdraw their amendments.
I think that the official Opposition’s amendment is better, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn. Amendment proposed: 95, in clause 136, page 77, line 12, at end insert— “The Secretary of State may only make regulations designating external or open spaces as smoke free in England outside— (a) an NHS property or hospital building, (b) a children’s playground, or (c) a nursery, school, college or higher education premises.”.—(Dr Johnson.) This amendment restricts the Secretary of State to only being able to designate open or unenclosed spaces outside a hospital, children’s playground, school or nursery. Question put, That the amendment be made.
24|0|5|8|The Committee divided:|Question accordingly negatived.||0|0
I will make a couple of housekeeping points before we move on. First, if there is an amendment, it has to be formally moved. Secondly, could hon. Members not say “you”? Remarks have to be through the Chair. I have let it go for a bit, but most people have been here long enough to know the rules of the House.
Amendment proposed: 94, in clause 136, page 77, line 21, at end insert— “The Secretary of State may designate a place or description of place under this section only if in the Secretary of State’s opinion there is a significant risk that, without a designation, persons present there would be exposed to significant quantities of smoke.”.— (Dr Johnson.) This amendment would re instate existing section 4(3) in the Health Act 2006. Question put, That the amendment be made.
25|0|4|8|The Committee divided:|Question accordingly negatived.||0|0
I beg to move amendment 10, in clause 136, page 77, leave out lines 26 to 29 and insert— “(a) for subsection (1A) substitute— ‘(1A) The Secretary of State must, no later than the end of the period of 6 months beginning with the day on which the Tobacco and Vapes Act 2025 is passed, lay draft regulations to be made under this section which have the effect of providing for all enclosed vehicles to be smoke free, other than vehicles of the type described in subsection (3).
(1B) Regulations may make provisions about the meaning of “enclosed vehicle”, which may include vehicles which are partially enclosed or enclosed (or capable of being enclosed) for some but not all of the time.’”.
This amendment requires the Secretary of State to make regulations which would extend the existing prohibition on smoking in vehicles to all enclosed vehicles except ships and hovercraft which are regulated under other legislation. The prohibition currently only applies to workplace vehicles and vehicles carrying under 18s. Amendment 10 requires the Secretary of State to make regulations that would extend the existing prohibition on smoking in vehicles to all enclosed vehicles except ships and hovercraft, which are regulated under other legislation. As hon. Members will know, the prohibition currently applies only to workplace vehicles and vehicles carrying under-18s. The 2015 ban on smoking in cars that contained children was a really important moment in in public health. It raised awareness about the harms of second hand smoking in enclosed spaces and protected many children from being exposed to those harms.
I agree that the regulations on smoking in private vehicles with under-18s were symbolically the right thing to do. Is there evidence either that the ban was in any way enforceable, or that it had any impact on public health?
I thank the hon. Member for those comments; I will do my best to answer them. Compliance with the measure is still not where we would like it to be: the last survey undertaken by an independent company on behalf of Action on Smoking and Health indicates that 9% of 11 to 15-year olds say that “they travel in a car with someone smoking some days, most days or every day in 2024.”
The current law also does not protect those with clinical vulnerabilities. The smoke free powers in this Bill are driven by a desire to protect people with clinical vulnerabilities from second hand smoke. That includes pregnant women and those with asthma and lung conditions, among others. No smoker wants to harm their family, friends, pets or co workers, so no smoker should smoke in an enclosed vehicle.
The evidence is clear: concentrations of smoke in vehicles where someone is smoking are greater than in any other small, enclosed space. If we are to be led by the evidence when extending smoke free places, we have to consider vehicles. That would provide consistency in policy and raise awareness of the harms of second hand smoke even further than they currently extend. It would be easier to enforce than the current law, where we have to check who else is in the vehicle, and would make the regulations on vehicles simpler and easier to understand—“It’s a straightforward ban; you can’t do it.” Finally, it is worth pointing out that it is supported by the public, with 67% of British adults saying they are in favour of an outright ban on smoking in vehicles.
I thank the hon. Gentleman for his clear explanation of what he wishes to achieve. I have great sympathy with it, because nobody wants to see people making their health worse by smoking in a car. However, his statistics are quite interesting. He said that 9% of children find themselves on a regular basis in a car where someone is smoking, yet the Minister has said already this morning that 11% of people smoke. Given that not all of the 11% of people who smoke have children with whom they travel in a car, that implies that the measure is pretty badly enforced and badly adhered to at the moment. He might argue that a complete ban in all vehicles would make it more uniform and easier to enforce, but I am not sure that that is the case.
I will be interested to hear from the Minister when he responds to the amendment whether he has any information or statistics on the number of prosecutions that have occurred under the current legislation. I support the legislation that prevents someone from smoking in a car with children, and I would support an extension of that to include vaping and other nicotine products. I would also support a ban on people smoking while driving; if someone is holding a lit cigarette in their hand, that will have an impact on their ability to manoeuvre the car, particularly in an emergency situation.
Essentially the hon. Member is proposing to say to someone in a parked up vehicle, perhaps in someone’s drive, “Although you are in a private space, you are not able to smoke.” I understand what he said about no smoker wanting to hurt someone—I am sure that is true—but I cannot imagine that there is any adult smoker that does not realise that smoking in a car with children is bad for the children. I find it very difficult to believe that that would be the case. I invite him to consider whether he is trying to prevent what is a legal activity—even under this Bill, if someone is the right age—in a private space that is theirs and theirs alone?
My comments follow on the shadow Minister’s. My understanding of amendment 10 is that, even if the occupant of the vehicle is entirely alone in their private vehicle, the hon. Member for Dartford is seeking to ban them from smoking in that vehicle. We are in danger here of overreaching on what we need to do to achieve a smoke free generation.
As the shadow Minister said, if the Bill passes, smoking will not be illegal; smoking, and likewise vaping, will be illegal for certain people of a certain age. As I said previously, I support the ambitions of the Bill, but this is a massive overreach. If a person is legally allowed to smoke in their own home on their own—or indeed with others—then if they are in their own vehicle and their smoking is harming nobody other than themselves, I do not see that we should make that illegal.
The hon. Gentleman is making his point very articulately. The idea that smoking legislation is an overreach is not new. Just about every change over the last 30 years—changes that have helped to cut very significantly the number of people affected by smoking related diseases—has been described as an overreach. A lot of this is about public acceptability, and nearly all the polling accepts that a great majority of adults would see this not as an overreach, but as a welcome change.
I do not pretend to have deep wisdom and insight into the whole population’s view on this, and I have not seen the studies the hon. Gentleman talks about, but I accept them. My concern is the need to be careful about the balance between the stated ambitions of all of us—or certainly most of us—on the Committee to reduce smoking as much as possible, and the rights confined within the Bill. If someone is legally allowed to smoke—that is, they were born prior to 1 January 2009—or is over 18 in the case of vaping, and they are in the privacy of their own vehicle without harming anybody else in said vehicle, they can do so. The hon. Gentleman’s amendment is a step too far.
I agree with my hon. Friend that this is a step too far. Does he also agree that this would be an enormous waste of police time? The police often get their priorities wrong as it stands, but the idea that they should spend time prosecuting smoking in a private vehicle is clearly a waste of police time.
I have much sympathy with my hon. Friend’s point of view. I must confess, I am not clear—I am sure the hon. Member for Dartford will be able to tell us—who will enforce this regulation. If it is the police, then I agree with my hon. Friend that it is an unnecessary burden.
The police currently have responsibility to enforce a whole range of activities that take place within a car, such as mobile phone use. It would in no way be a new concept for the police to enforce something of this nature. If they saw someone in a car with a cigarette, they would be able to stop the car and apply a penalty as they currently do with other types of behaviour within cars.
I accept that point, but I do not think my hon. Friend the Member for Windsor’s point was that the police do not currently have powers to stop people who are driving dangerously. I completely accept that they should stop people using their mobile phones or doing things that constitute dangerous driving. The shadow Minister gave the view that smoking a cigarette could be counted as driving without due care and attention or dangerous driving, so that may be a way of enforcing it. However, I think that having the police stop someone simply smoking in their own vehicle—something that is legal in every other private location—when they are over the legal age required in the Bill and they are not harming anybody else, is an overreach.
The key difference between a mobile phone and a cigarette is that with mobile phones, it is the driver using a mobile phone while driving that is the problem. If one is pulled over in a parking space in one’s private car, one can use one’s mobile phone to one’s heart’s content, and likewise when one is parked in one’s drive. If one wants to sit in one’s car on one’s drive and use a mobile phone, provided the car is stationary, that is also a legal thing to do. What the hon. Member for Dartford is suggesting is not that someone is unable to smoke while driving, which would be quite a sensible measure, but that if one’s car is stationary and private and one is essentially alone in an enclosed space like one’s home, one still would not be allowed to smoke, which seems a little odd.
I completely agree with the shadow Minister. I have two final points. Proposed new subsection (1B) makes reference to the meaning of an enclosed vehicle. I just want to clarify what that means. The amendment says: “which may include vehicles which are partially enclosed or enclosed (or capable of being enclosed) for some but not all of the time.”
Is the amendment trying to capture convertible cars—someone driving with the top down on a sunny day?
The amendment is not intended to change the way that the current legislation relates to individual vehicles, merely the activity happening within them, and that currently permits smoking in open top vehicles with the hood down, i.e. unenclosed. The amendment does not propose any change to that.
That is a helpful clarification. Finally, in the explanatory statement, it says that enclosed vehicles account for everything “except ships and hovercraft” apparently because that is “regulated under other legislation”. Perhaps it is in a later amendment, but why did the hon. Member decide not to amend the regulations for ships and hovercraft? Is that because he is hoping to get a private Member’s Bill at some point to change whatever legislation governs hovercraft and ships—[Interruption.] My hon. Friend the shadow Minister whispers to me, “It’s further down,” so that clarifies the point for me.
Ordered, That the debate be now adjourned.—(Taiwo Owatemi.)
Adjourned till this day at Two o’clock.
The Committee consisted of the following Members:
Chairs: † David Mundell, Valerie Vaz
† Ballinger, Alex (Halesowen) (Lab)
† Blake, Rachel (Cities of London and Westminster) (Lab/Co op)
† Caliskan, Nesil (Barking) (Lab)
† Cross, Harriet (Gordon and Buchan) (Con)
† Davies, Gareth (Grantham and Bourne) (Con)
† Kohler, Mr Paul (Wimbledon) (LD)
† MacDonald, Mr Angus (Inverness, Skye and West Ross shire) (LD)
† Murray, James (Exchequer Secretary to the Treasury)
† Osborne, Tristan (Chatham and Aylesford) (Lab)
† Poynton, Gregor (Livingston) (Lab)
† Reynolds, Emma (Economic Secretary to the Treasury)
† Ryan, Oliver (Burnley) (Lab/Co op)
† Stephenson, Blake (Mid Bedfordshire) (Con)
† Strathern, Alistair (Hitchin) (Lab)
† Wakeford, Christian (Bury South) (Lab)
† Wild, James (North West Norfolk) (Con)
† Yang, Yuan (Earley and Woodley) (Lab)
Lynn Gardner, Kevin Maddison, Committee Clerks
† attended the Committee
Public Bill Committee
Tuesday 28 January 2025
(Afternoon)
[David Mundell in the Chair]
Finance Bill
(Except clauses 7 to 12, schedules 1 and 2, clauses 15 to 18, schedule 3, clauses 47 to 53 and any new clauses or new schedules relating to the subject matter of those clauses and schedules.)
Clause 25
Commercial letting of furnished holiday accommodation
Question (this day) again proposed, That the clause stand part of the Bill.
I remind the Committee that with this we are considering schedule 5.
I will pick up where I left off by asking the Minister to provide confirmation on the three points I listed, and to provide an assurance that the guidance from His Majesty’s Revenue and Customs is sufficiently clear on those points that those affected are aware of the full implications of the changes.
Finally, in the case of joint ownership, the Chartered Institute of Taxation is calling for an administrative easement to allow declarations to be backdated. Has the Minister considered the possibility of such an easement being implemented? I have not been able to raise all of the many points that the institute has raised with me, and I apologise to it for that. I am sure the Minister is engaging with the institute. I know that in opposition he spent a lot of time with it, as he will be doing with industry. I encourage him to speak to the Chartered Institute of Taxation and get its guidance and input, as I have tried to lay out in my remarks.
I start by putting on the record my thanks to the Chartered Institute of Taxation. It was a great support to me in opposition and continues to be an important stakeholder for us in government.
I will try to respond to some of the shadow Minister’s points. First, he raised concerns articulated by the Chartered Institute of Taxation about trading and property income boundaries. There are established principles that underline what is trading and what is income from property. The bright line tests that have been put forward distort those principles rather than clarify them. Whether activity is income from property depends on the nature of the activity undertaken, and specifically how the profit is derived. If the profit is derived from the exploitation of land, the income is taxable as property income. The furnished holiday let rules provided for specific reliefs, but for tax purposes it has always been property income, not trading income. Categorising some property income arbitrarily as trading would give more reliefs than FHLs previously had.
The shadow Minister also raised concerns about how the repeal of the FHL rules will apply practically to landlords and how that may affect them. I reassure him that HMRC has already published guidance on the changes and will be publishing more ahead of April, when the changes come into effect. We have also engaged with the industry since the announcements to ensure that we are aware of its reaction.
On the shadow Minister’s other points in relation to business asset disposal relief and roll over relief, we have considered the impacts of the changes on those two reliefs. It will depend on an individual’s personal circumstances, but broadly each person would need to dispose of the whole or part of an FHL business, or dispose of assets that were used for the purposes of an FHL business that has ceased, before April 2025. We have been fair in our approach not to restrict relief where someone has had an FHL before repeal. Individuals should consult online guidance or a tax adviser before making any decisions.
The shadow Minister asked about married couples. We have considered the impact of the changes on married couples and civil partners. The removal of the FHL rules will mean that a married couple is subject to the same rules as other landlords. For married couples, income is assumed to be split 50:50 unless a declaration is made to split the income in a different proportion, which must be the same as the proportion of ownership between the couple. If they want to change the proportions, married couples will have to make an election for joint ownership arrangements as per the usual process. There will be a deadline of April for married couples to adjust to the changes as we cannot backdate such elections. That was already set out online following the consultation on the draft legislation. Further online guidance will be available.
I hope I have covered most of the shadow Minister’s points. I conclude by recognising my gratitude to him for not opposing the provisions; it would be noteworthy if he had changed his mind since he was in government. I am not sure whether all his colleagues are on exactly the same page as him, but I will not pry at this stage of our consideration of the Bill. Perhaps his slightly caveated response to the clauses reflects some of the discussions happening among Members on the Opposition Front Bench. Notwithstanding whatever is happening behind closed doors, I welcome their support for the clause.
Question put and agreed to. Clause 25 accordingly ordered to stand part of the Bill. Schedule 5 agreed to. Clause 26 Films and television programmes: increased relief for visual effects Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss clauses 27 and 28 stand part.
Clause 26 makes changes to maximise the potential of the UK’s world class visual effects industry, and clauses 27 and 28 make changes to ensure continuity for companies claiming expenditure credits for film, TV and video game production, by aligning the legislation with equivalent provisions in the previous tax reliefs.
The UK is a strong performer in visual effects production and is home to several Oscar winning companies, but in recent years there have been reports of visual effects activity moving overseas. Stakeholders report that that is because of the 80% cap on qualifying expenditure relating to the audiovisual expenditure credit, or AVEC. Currently, companies can receive AVEC on up to 80% of their production costs, including visual effects costs. Visual effects work is done virtually, so companies may place 80% of their production costs in the UK and place their visual effects costs overseas, particularly in countries such as Canada and France, which offer special tax incentives for visual effects.
In November 2023, a call for evidence on the visual effects industry was published. It provided substantial evidence that visual effects work was moving overseas because of the 80% cap and because of increased competition from countries that offer targeted visual effects tax incentives. Separately, previous tax reliefs for film, TV and video game production are being phased out and will be fully replaced with expenditure credits from 1 April 2027. Indeed, companies can already claim expenditure credits instead of the tax reliefs if they wish.
The changes made by clause 26 will increase the amount of AVEC awarded to UK visual effects costs in film and high end TV production by 5 percentage points, to a total credit rate of 39%. The changes remove AVEC’s 80% cap on qualifying expenditure for visual effects costs, so that all those costs, including those that are above the 80% cap, may receive the enhanced 39% rate of relief. Around 1,300 companies claim film or high end TV tax relief and stand to benefit from the changes, and the additional tax relief is expected to cost £75 million per year from 2028-29.
Clause 27 sets out that the previous tax reliefs and the new expenditure credits both require companies to provide cultural certificates from the British Film Institute to support their claims for relief. HMRC requires the certificates to be in force at the time a claim is made. The new expenditure credits legislation is less clear on that requirement than the previous tax reliefs legislation; it requires certificates to have effect at the end of each claim period, rather than only at the time the claim is made. The changes made by clause 27 will therefore align the expenditure credits legislation with the tax reliefs legislation, to clarify that cultural certificates must be valid when claims are made, and ensure continuity of treatment between the previous tax reliefs and the new expenditure credits.
On clause 28, the previous tax reliefs and the new expenditure credits both have rules on the treatment of expenses that are not made within four months of the end of the accounting period in which they are incurred. The tax relief rules allow for such expenses to be deducted from profits, but do not allow additional relief on them until they are paid. The expenditure credit rules prevent the expenses from being deducted from profits at all—that is, until they are paid. The changes made by clause 28 will align the expenditure credit rules with the tax relief rules, so that the unpaid amounts can be deducted from profits that are still ineligible for relief until they are paid. This will ensure continuity for companies that are used to the treatment of unpaid amounts under the previous tax reliefs.
In conclusion, the changes to the audiovisual expenditure credit will boost the UK’s offer in visual effects in an increasingly competitive international environment, and incentivise more visual effects work on UK productions to be done here in the UK. Furthermore, the changes to the expenditure credits legislation will align it with the more familiar tax relief provisions, ensuring continuity for film, TV and video game companies. I commend the clauses to the Committee.
As the Minister set out, clauses 26 to 28 create an additional relief for video effects expenditure while making administrative changes to align audiovisual and video games expenditure credits with older reliefs for film, TV and video games.
We announced the additional relief for VFX expenditure at the spring Budget 2024, as part of a wider package to support our world leading creative industries—which, by the way, grew at more than one and a half times the rate of the wider economy between 2010 and 2019, a remarkable success for any sector. The consultation we launched on the design of the policy directly informs the clauses, and we will not oppose them.
However, one suggestion raised in the consultation that the Government have not chosen to take forward was to allow companies that claim the independent film tax credit to also claim the additional tax relief for visual effects. The Government have said they do not believe this exclusion will have an adverse impact on companies, but it would be helpful to hear from the Minister what assessment was made of the benefit to smaller visual effects studios had the scope of the relief been widened in the way in which many suggested as part of the consultation.
The spring Budget 2024 also announced a 40% relief from business rates for eligible film studios in England for the next 10 years. My understanding is that this has not yet been implemented by the new Government, and has in fact been referred to the subsidy advice unit. I understand that in the last couple of hours, over lunch, the unit has reported its findings. I would be grateful if the Minister could update the Committee on what those may mean for the future of the measure and the expected timeline for delivery.
I thank the shadow Minister for his comments and for setting out some important context around the tax reliefs and expenditure credits, and around why they are so important in supporting growth in the UK economy.
On his question about the independent film tax credit, as he I am sure understands, films that claim the independent film tax credit will receive a 53% rate of audiovisual expenditure credit on up to 80% of production costs. That includes visual effects cost. The independent film tax credit therefore provides generous support for visual effects costs within independent films. Separating the additional tax relief for visual effects from the independent film tax credit helps to ensure that both schemes are simple and easy for companies to understand.
On the publication that the shadow Minister says happened in the last few hours, that is so hot off the press that I am not even authorised to speak about it yet. I have not been briefed on it because I have been getting ready for this Committee. I am sure that if it has been submitted, the right officials and Ministers will look at it as soon as possible.
Question put and agreed to. Clause 26 accordingly ordered to stand part of the Bill. Clauses 27 and 28 ordered to stand part of the Bill. Clause 29 Research and development relief: Northern Ireland companies Question proposed, That the clause stand part of the Bill.
Clause 29 makes small changes to the rules for enhanced support for research and development intensive companies with a registered office in Northern Ireland. At the spring budget 2023, the previous Government announced an enhanced rate of relief within the R&D small and medium sized enterprise scheme applying from 1 April 2023. Separately, from April 2024 slightly different rules applied for R&D intensive companies with a registered office in Northern Ireland, allowing them to continue claiming relief on a wider range of overseas expenditure than companies in Great Britain, while introducing a cap on the amount of relief that can be claimed.
Clause 29 amends the rules introduced last April to reflect the particular market conditions in Northern Ireland and ensure consistency with the UK’s international obligations. This will introduce some additional requirements around the cumulation of aid and reporting, which will apply to claims made on or after 30 October 2024 by eligible companies with a registered office in Northern Ireland. A very small number of claimant companies in Northern Ireland are expected to be affected, while the vast majority will continue to be better off compared with their counterparts in Great Britain. This is because their claims are too small to be affected by the cap, but they will still be able to claim on overseas expenditure, as before.
The Office for Budget Responsibility has certified this measure as having a negligible impact on the cost of the relief. The Government are committed to supporting R&D investment across the UK through the R&D tax reliefs, which play a key role in supporting the mission to kick start economic growth. The changes will ensure that the R&D reliefs reflect the particular market conditions in Northern Ireland and ensure consistency with the UK’s international obligations. I commend the clause to the Committee.
As the Minister set out, clause 29 amends the measure in Northern Ireland to set in law a new cap of €300,000 on a three year rolling basis, alongside other sources of relevant aid. The existing cap of £250,000 is currently defined in regulations. Will the Minister inform the Committee why the provisions have been moved from regulation into law? What are the implications of the change?
HMRC notes that when claiming enhanced R&D intensive support, companies with registered offices in Northern Ireland now need to take into account other relevant aid that they have received. What steps have been taken to ensure that those companies are aware of this change and are equipped to satisfy the new requirement?
I thank the hon. Gentleman for his questions. It is worth emphasising that this is a small change compared with the rules that already applied from April 2024. In practice, we expect a very small number of companies to be affected by the change, with very few claims to be made before April 2025. Since the change will be a key qualification to the tax rules for a part of the UK, it should be legislated for in the Finance Bill and as part of the Budget process. I hope that helps to explain the process we are taking to implement the changes and reassures the hon. Gentleman that they are small and will affect a very small number of companies.
Question put and agreed to. Clause 29 accordingly ordered to stand part of the Bill. Clause 30 Research and development intensity condition: transitional provision Question proposed, That the clause stand part of the Bill.
The clause makes small changes to the higher rate of relief available for R&D intensive SMEs to ensure that the R&D reliefs remain fit for purpose while providing clarity to businesses. The Government recognise the important role that R&D plays in driving innovation and economic growth, as well as the benefits it can bring for society. The R&D tax reliefs play a key role in this. That is why I was pleased to announce in the corporate tax road map published at the Budget that the Government are committed to maintaining the generosity of the rates in both the merged R&D expenditure credit scheme and the enhanced support for R&D intensive SMEs to increase certainty for companies when making investment decisions.
In the Finance Act 2024, the R&D intensity calculation for the enhanced rate of relief did not take account of any expenditure for which a company was entitled to claim research and development expenditure credit. That meant that some companies that were supposed to qualify as R&D intensive might not meet that threshold. The change made by clause 30 will therefore ensure that research and development expenditure credit qualifying expenditure is included in the calculation of the R&D intensity ratio, as was always intended.
This change will apply to all claims for the enhanced rate of relief from its introduction in April 2023, and to all expenditure incurred from 1 April 2023 in an accounting period that began before 1 April 2024. It will affect some small and medium sized enterprises that have a high R&D intensity and claim the enhanced rate of SME payable R&D tax credit relief. This is a small technical change and so it is not anticipated to have any Exchequer or economic impacts.
The Government are committed to supporting R&D betterment across the UK through the R&D tax reliefs, which play a key role in supporting our mission to kick start economic growth. The changes made by this clause will ensure that all companies originally intended to benefit from the higher rate of relief will now be able to do so. I commend clause 30 to the Committee.
The clause amends the transitional provision, clarifying that expenditure that would qualify for R&D expenditure credit is relevant R&D expenditure when calculating the R&D intensity ratio, which determines eligibility for enhanced R&D intensive support, as was always intended. This provision has a retrospective effect, and I would be grateful if the Minister could therefore tell the Committee what steps the Treasury is specifically taking to ensure that all those who missed out on the relief, but may now be eligible, are aware and equipped to claim this new support.
I reassure the shadow Minister that, as Ministers and Treasury officials, we are routinely in conversation with the industry and those companies that benefit from R&D support. We will ensure that all changes to legislation and all opportunities available for us to support the industry are communicated with clarity, and we will ensure that everyone is aware of what support we can offer for their economic growth ambitions.
Question put and agreed to. Clause 30 accordingly ordered to stand part of the Bill. Clause 31 Employee ownership trusts Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss the following: Government amendments 38 to 43.
Schedule 6.
The clause and the schedule make changes to the taxation of employee ownership trusts to prevent opportunities for abuse and to ensure that the regime remains focused on encouraging employee ownership. The Government are committed to supporting employee ownership as a viable and sustainable business model. Employee ownership gives employees a greater stake in the business in which they work, improving working conditions and in turn driving productivity and growth.
Tax reliefs are currently available for company owners who transition their companies into an employee ownership trust, which is set up to hold and manage the company for the benefit of all employees of the company, rather than for individual shareholders. This model has proven successful, with over 1,500 UK companies held by employee ownership trusts today, improving the working conditions of some 200,000 employees. However, while the success of the employee ownership model is to be applauded, the Government are concerned that the tax regime is vulnerable to exploitation. We are therefore determined to close loopholes to ensure that the reliefs are available only to those who are motivated by a genuine desire to transform their companies into employee ownership trusts.
The changes made by clause 31 and schedule 6 therefore amend the conditions for obtaining capital gains tax relief on disposing of a company to the trustees of an employee ownership trust to ensure that the former owners cannot retain control of the company following disposal. The trustees must be UK residents and they must take reasonable steps not to pay more than the fair market value for their shares. These changes are necessary to prevent opportunities for abuse and to protect the long term integrity of these reliefs.
Individuals will also be able to provide additional information to HMRC at the point of claiming the relief, and the period of time within which HMRC can take action, if the relief conditions are breached post disposal, will be increased. HMRC will be given additional powers to monitor the reliefs and to take action when non compliance is identified.
Lastly, this measure makes technical changes to provide clarity on the tax treatment of contributions paid to the trustees from the company in order to meet costs associated with purchasing the company from the former owner, and also adjusts the conditions for income tax relief on employee bonus schemes. Overall, these changes will simplify the process of setting up and operating employee ownership trusts.
Government amendments 39 and 41 confirm that the relief is available only with respect to contributions paid to the trustees from a company for the purposes of meeting the trustees’ acquisition costs. In doing so, they clarify the policy intent and remove any potential ambiguity within the legislation as drafted. Government amendments 38 and 40 ensure that the distributions relief is available in circumstances where the capital gains tax relief was not claimed because the vendor was a company, rather than an individual, provided that the conditions for obtaining the relief were otherwise met.
Government amendments 42 and 43 expand the scope of the costs that qualify for the relief to include other expenses that may reasonably be incurred by trustees in connection with the acquisition of the company. These amendments make technical clarifications and address the concerns expressed by key stakeholders that the scope of the relief as announced at the autumn Budget was too narrow to reflect the reality of how employee ownership trust acquisitions are funded.
Overall, the clause protects the future of employee ownership in the UK by ensuring that the tax reliefs available to encourage it continue to operate effectively and by preventing opportunities for abuse. I commend clause 31, schedule 6 and Government amendments 38 to 43 to the Committee.
Clause 31 and schedule 6 alter the conditions for obtaining tax reliefs for employee ownership trusts. The current regime was introduced by a Conservative Government, following the independent Nuttall review in 2012, which set out the many strengths of the model and how it could become more widespread in our country.
Since the current regime was implemented in 2014, its tax incentives have achieved great success in encouraging the creation of employee ownership trusts, which have become the predominant model for employee ownership. Today, more and more companies are making the transition to that model. I was pleased to hear the Minister tell us that there are about 1,500 examples in the country. In 2023, we launched a consultation to review the regime, and it has fallen on this Government to respond to it.
The package of changes that the Minister has set out aim to prevent opportunities for the relief to be abused while ensuring that employee ownership continues to be incentivised and supported. We share those objectives, and we warmly welcome these measures, which largely reflect the recent consultation. We will not oppose them but, as hon. Members would expect, I have a few questions.
I would be grateful if the Minister can explain why a few suggestions put forward during the consultation have not been taken forward. For instance, a large number of respondents asked for the tax free bonus limit for employees to be increased from the current level of £3,600. Had that kept pace with inflation, the maximum today would be close to £5,000. The Government have made it clear that they have no plans to increase the tax free bonus amount, but they have not said why. A little more detail would be welcome, as would some reassurance that the Government will keep that element of the regime under review so they can react speedily if the weakening of the incentive begins to undermine the overall policy goal that we all share.
Another point raised in responses to the consultation was the issue of double taxation upon the sale of an EOT owned company to a third party. In that event, trustees would be liable to pay capital gains tax on the disposal, and employees would be charged income tax on their share of the net proceeds. When responding, the Government did not acknowledge that point about double taxation, which the Chartered Institute of Taxation also highlighted. We understand that that concern must be weighed against the main abuse that the Government are rightly trying to prevent with these measures: the exploitation of EOTs by company owners to reduce their CGT liability when ultimately selling their business to a third party.
Surely the second layer of taxation—the income tax charged to employees—does not act as a major disincentive to that kind of behaviour, however, especially in the context of the additional restrictions being introduced in part 1 of the schedule to prevent such abuses. I would therefore be grateful if the Minister can address that point or write to me later with clarification about why that was not taken forward.
The Minister will be aware of concerns about the implementation of the statutory relief for distributions in part 2 of the schedule. As originally drafted, the schedule allowed for only specific costs—for example, payments made by companies to the EOT to fund the share purchase, interest on outstanding considerations, and stamp duty—to be tax deductible, a process which previously would have taken place through a non statutory clearance request to HMRC.
That had the effect of excluding other costs that many thought would be reasonable to cover. I am glad that the Government have listened and have tabled some amendments to widen the scope of the relief, and I thank the Exchequer Secretary for his letter setting them out—it was a great read. Other costs, however, such as payments to cover the fees of professional trustees and advisers for ongoing services, unfortunately remain excluded. Moreover, HMRC has limited flexibility to provide relief for any excluded cost, now that the relief is on a statutory footing.
I would be grateful if the Minister could elaborate on the thought process behind the fine lines being drawn and, in some cases, redrawn in this area. On what basis are the Government determining what should and should not attract relief? As I said, we will not oppose these measures, but I would be grateful for reassurance that in the pursuit of a noble goal—preventing this important regime from being abused—the Government are not unintentionally undermining its attractiveness.
I thank the shadow Minister for his broad support for the changes we are making and for recognising the benefit that these measures can bring in supporting the integrity of employee ownership for the future. Where schemes become liable to abuse, it undermines support for them and their longevity. Making sure that the tax reliefs are well designed is important for making sure that this beneficial structure can continue into the future.
The shadow Minister asked a specific question about the level of restrictiveness on the relief for distributions from the company and why various decisions and conversations were had on extending the relief to other costs that may be incurred by the trustees. I can tell him that since the autumn Budget, officials have met stakeholders such as the Chartered Institute of Taxation, which raised concerns about the scope of the distributions relief as initially announced.
The CIT was concerned that that relief was too narrow to reflect the reality of how employee ownership trust acquisitions are funded. In fact, as the shadow Minister referenced, we accepted those concerns, and tabled amendments 42 and 43 to expand the scope of distributions relief to cover all other expenses reasonably incurred by the trustees in connection with their acquisition of the company. As always, I am grateful to the Chartered Institute for Taxation for the constructive engagement it has given to my officials in discussing these issues.
More broadly, the shadow Minister asked a series of questions about policy choices. Of course, the Government keep all policy under review, but it is a question of finding the right balance when calibrating policies such as this to ensure that they use tools of public policy in a targeted way to achieve the right outcome. As I made clear, we were open to feedback from the CIT when it felt that the terms of certain aspects were too restrictive, so we tabled these amendments.
Many of the key changes being introduced now were, to give the shadow Minister credit, the subject of a consultation held by the previous Government in 2023, which sought views on proposals to reform the tax regime. We are now putting those into play today. Our proposals, which were initially contained within that consultation, were met with broad support from respondents. They actually form the core of the changes that we are implementing today, notwithstanding the subsequent changes we have made.
Our relationship with the Chartered Institute of Taxation and other relevant stakeholders in this space helps to inform the policy decisions we are putting in law today, as well as any future changes to the scheme we might consider. We want to ensure that this opportunity continues into the future and that it succeeds. Making sure that we take proportionate measures to avoid tax reliefs being abused is fundamental to ensuring their longevity.
Question put and agreed to. Clause 31 accordingly ordered to stand part of the Bill. Schedule 6 Employee ownership trusts Amendments made: 38, in schedule 6, page 180, line 32, leave out “by a person (‘P’) other than a company”.
This amendment allows for the distributions relief to be given in circumstances where the capital gains tax relief for employee ownership trusts is not available because the vendor of the shares in the company to which the employee ownership trust relates is a company (provided the other conditions for the capital gains tax relief being given are met). Amendment 39, in schedule 6, page 181, line 2, at end insert— “(d) the payment was made for the purposes of meeting the trustees’ acquisition costs.”
This amendment requires that the distribution that is the subject of the relief was actually made for the purposes of meeting acquisition costs. Amendment 40, in schedule 6, page 181, line 10, after “trusts)” insert “, but those requirements have effect for the purposes of this section as if references to ‘P’ were to the person making the disposal whether or not that person is a company”.
This amendment is consequential on Amendment 38, and secures that the capital gains tax relief requirements are capable of applying properly in circumstances where the vendor of the shares in the company to which the employee ownership trust relates is a company. Amendment 41, in schedule 6, page 181, line 11, leave out “subsection (2)” and insert “this section”.
This amendment is consequential on Amendment 39 (and secures that “acquisition costs” is defined for the purposes of the whole section). Amendment 42, in schedule 6, page 181, line 12, after “are” insert “sums expended by the trustees on”.
This amendment, and Amendment 43, expand the scope of acquisition costs that can benefit from the relief. Amendment 43, in schedule 6, page 181, leave out lines 13 to 19 and insert— “(a) the acquisition of ordinary share capital in C by the trustees that resulted from the disposal; (b) the repayment of any sums borrowed to fund that acquisition; (c) the payment of interest on any such sums or in respect of any deferral of consideration for the disposal to the extent the payment is not in respect of interest exceeding a reasonable commercial rate; (d) any valuation of C carried out in connection with the acquisition; (e) any liability to stamp duty or stamp duty reserve tax on the acquisition; (f) such other reasonable expenses as are directly connected with the acquisition (but this does not include any expenses incurred in connection with the ownership of the ordinary share capital once acquired).”—(James Murray.) This amendment, and Amendment 42, expand the scope of acquisition costs that can benefit from the relief. Schedule 6, as amended, agreed to. Clause 32 Overseas transfer charge: pension schemes in EEA state or Gibraltar Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss clauses 33 and 34 stand part.
These clauses make changes to pension schemes established in, or administered by, persons resident in European economic area states and bring them in line the rest of the world.
Currently, individuals can transfer some or all of their UK pension savings to an overseas pension scheme, provided it is a qualifying recognised overseas pension scheme. Certain transfers to such schemes are subject to the overseas transfer charge, which is a 25% tax charge on the value of the transfer. However, provided they do not exceed the overseas transfer allowance, UK or EEA residents are excluded from this charge for transfers to qualifying overseas pension schemes in the EEA and Gibraltar. That exclusion was introduced to comply with EU fundamental freedoms that were in place at the time. As a result, some pension scheme members can benefit from double tax free allowances by taking tax free entitlements from both their UK scheme and their qualifying overseas pension schemes.
The changes made by clause 32 remove that exclusion from the overseas transfer charge for transfers from 30 October 2024. As a result, transfers will be subject to the overseas transfer charge unless another exclusion applies—for example, if the transfer is to a scheme established in a country where the member is a resident. That will reduce the number of tax free transfers made and help to keep up to £1 billion of pension savings in the UK over the next five years.
Clause 33 concerns the requirements for schemes to be considered as overseas pension schemes and recognised overseas pension schemes. When the UK was a member of the EU, the requirements for schemes based in the EEA were different from those for schemes based in the rest of the world.
The changes made by clause 33 mean that a non occupational pension scheme established in the EEA must be regulated by a pension schemes regulator in that country—provided there is such a regulator—to be considered an overseas pension scheme. If there is no such regulator, the scheme provider must be regulated for the establishment and provision of the scheme.
Furthermore, to be considered a recognised overseas pension scheme, a scheme based in the EEA must be established in a country with which the UK has either a double tax agreement that allows for exchange of information or a tax information exchange agreement.
The changes will take effect from 6 April 2025. They will align the requirements for schemes in the EEA with those for the rest of the world, and bring the requirements for non occupational schemes in line with those for occupational ones.
Clause 34 concerns the requirements on administrators of UK registered pension schemes. Under the existing rules for such schemes, the scheme administrator can be a resident in the EEA, which can make enforcement of tax debts from the scheme difficult and costly for HMRC. The changes made by clause 34 would mean that, from 6 April 2026, all scheme administrators of UK registered pension schemes will need to be UK residents. That requirement will support HMRC’s enforcement activities, as there will be a UK resident for it to engage with.
In conclusion, the changes made by these clauses will bring the tax treatment of transfers to EEA and Gibraltar pension schemes, the conditions that EEA overseas schemes need to meet, and the requirements for EEA administrators of UK schemes in line with the rest of the world. I commend the clauses to the Committee.
As we have heard from the Minister, clause 32 reduces tax free transfers from UK tax relieved pensions by removing the exclusion from the overseas tax charge. The Government have also announced linked tax maintenance measures in the other clauses. Clause 33 makes changes to the conditions for overseas pension schemes and recognised overseas pension schemes established in the EEA, so that from 6 April this year, they must meet the same conditions as schemes established in the rest of the world.
Clause 34 makes changes to the requirements for pension scheme administrators for registered pension schemes so that they must be UK resident. The OTC was introduced in 2017 to prevent individuals reducing the UK tax due on their pensions by transferring them overseas, particularly to low tax income jurisdictions, while still benefiting from UK pension tax relief. The 25% charge applies on transfers overseas, unless there is an exclusion from that charge at the point of transfer.
At the Budget in the autumn, the Government announced that they would remove the exclusion from OTC of transfers to qualified pension schemes established in the EEA and Gibraltar where the member is resident in the UK or an EEA state. Aligning the treatment to transfer made with those to the rest of the world will deal with the risk of a double tax free benefit. The tax information and impact note states: “Aligning the treatment of transfers to QROPS established in the EEA and Gibraltar with that of transfers to QROPS established in the rest of the world... reduces the risk of around £1 billion of UK tax relieved pension savings being transferred overseas across the scorecard.”
Could the Minister confirm how many individuals use the current exclusion and at what cost? It would also be useful to know how much has been raised by the OTC since it was introduced in 2017.
Clause 32 brings to an end the exclusion that can currently be used to transfer to schemes in the EEA. According to the Society of Pension Professionals, in doing so, individuals can benefit from a double tax free allowance of more than £2 million. The tax note acknowledges: “There will be operational impacts on HMRC caused by removal of the exclusion… HMRC will need to make some changes to forms, guidance and processes to support this.”
Would the Minister provide an update on how far HMRC has got in preparing for those updates and changes?
As the Minister said, clause 34 provides that the scheme administrator must be resident in the UK. That means that, ahead of 6 April 2026, schemes will need to check whether their current scheme administrator will remain valid from this date. Again, the tax information and impact note confirms: “Changing the rules on who can be a scheme administrator for a registered pension scheme, could mean that some individuals might not be able to pay further funds into a scheme if the pension scheme does not appoint a UK resident pension scheme administrator and is deregistered.”
How many individuals does the Minister estimate this will impact, and what guidance will HMRC provide to prevent individuals from falling foul of the rule change? Again, the Society of Pension Professionals has pointed out that it would be useful if the memorandum indicated how this could impact on schemes where all of its trustees act as the scheme administrator but some are EEA based and some are UK resident. I would be grateful if the Minister could provide some clarity on that point. As I have set out, we support this change, and I look forward to the Minister’s response to the technical questions I have raised.
I thank the shadow Minister for his questions. I hope to answer all of them and, if I do not, I promise to write to him with clarification. He asked some questions about the number of individuals. I can tell him that in 2023-24, there were 7,100 transfers to qualifying recognised overseas pension schemes, and the value of those transfers was £1.14 billion. There is an increasing risk that these transfers were being made tax free and that some of these individuals would have been benefiting from the double tax free allowances. I note the hon. Gentleman’s support for eliminating the risk of that and not allowing people to benefit from double tax free allowances, which is obviously the main intention of these clauses. He asked about HMRC being prepared and the operational challenges that it might face as a result of the changes. Treasury Ministers and officials work very closely with HMRC—we are in the same building—and these changes have been drafted and consulted on with HMRC, so I suspect that I can reassure him that everything is in order.
The hon. Gentleman asked whether individuals will still be able to pay funds into a registered pension scheme if they do not appoint a UK resident scheme administrator. Some individuals might not be able to get tax relief on further funds paid into pension scheme if the scheme does not appoint a UK resident pension scheme administrator and if the scheme is subsequently deregistered. However, we do not expect many schemes to be affected by this issue, because the process for changing scheme administrators is established and, as the hon. Gentleman will have seen in clause 34, we are providing a longer lead in time—until early April 2026—for the establishment of the UK administrators.
I may not have answered all the shadow Minister’s questions, but I promise that I will write to provide clarification on any that I have missed.
Question put and agreed to.
Clause 32 accordingly ordered to stand part of the Bill.
Clauses 33 and 34 ordered to stand part of the Bill.
Clause 35
Alternative finance: diminishing shared ownership refinancing arrangements
Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss schedule 7.
The clause and schedule make changes to alternative finance tax rules for refinancing, and will promote financial inclusion for those who choose to use alternative forms of finance, for either religious or other reasons.
Alternative finance is a method of raising finance that characteristically involves the sale, purchase and renting of assets in circumstances in which conventional financing would involve lending at interest. Currently, a capital gains tax or, in some cases, corporate tax or income tax liability can arise when entering into alternative refinancing arrangements; this would not occur if conventional financing arrangements had been used.
This issue mostly affects properties that do not qualify for capital gains tax private residence relief, such as rental properties, second homes and commercial properties. The changes made by clause 35 and schedule 7 will ensure that, where qualifying alternative finance provisions are used, individuals and companies will not be liable to capital gains tax, corporation tax or income tax on the transfer of part of the beneficial interest in the asset to a financing institution in order to raise finance.
The Government are committed to the continued strength of the UK Islamic finance sector and to it providing access to alternative finance to anyone who seeks it. These measures deliver on this commitment by putting alternative and conventional financing on a level playing field in relation to their tax treatment when refinancing. As a result, those who choose to use alternative finance will receive broadly the same tax treatment as those using conventional financing arrangements. I therefore commend clause 35 and schedule 7 to the Committee.
As the Minister set out, clause 35 and schedule 7 make changes to the tax rules that apply to alternative finance. They ensure that, where an existing asset is used to raise finance using alternative finance, the tax outcome is broadly the same as it would be had conventional financing been used. The measure aims to level the playing field, and we will not oppose it.
Currently, the refinancing of a residential or commercial property using alternative finance triggers a potential capital gains tax liability on any inherent gain. By contrast, no potential capital gains tax liability arises when a conventional mortgage is used. The policy objective of this measure is one that we support and acted on in government in other areas: to ensure a level playing field across conventional and alternative forms of finance. This issue affects properties that do not qualify for capital gains tax private residence relief, such as residential properties, and will apply to refinancing entered into on or after 30 October 2024.
Once again, I echo the thanks given to the Chartered Institute of Taxation for its work and advice on scrutinising the Bill, as well as for the discussions I have had with it about the clause. The Chartered Institute of Taxation has suggested that the clause could be amended to exempt taxpayers from the liability on inherent gains that were raised on alternative finance transactions before 30 October 2024. They recognise that making such a retrospective change would be unusual. However, they suggest that a retrospective change in circumstances where there is an anomaly in the legislation that is both inconsistent with Government policy during the time the anomaly exists and adversely affects taxpayers, particularly those with protected characteristics, would meet the high bar.
I would be grateful if the Minister could say whether he has considered that point, and what approach HMRC will take to taxpayers who have already incurred a capital gains liability. Can the Minister confirm how many taxpayers using alternative financing will likely benefit from this change? I would also be grateful if he could set out what steps HMRC is taking to deal with any potential for fraud. As I say, we support this measure, and I would be grateful if the Minister would respond to my questions.
I thank the shadow Minister for his support for these clauses, and for what we seek to do through them: as he said, level the playing field between alternative finance and conventional finance. He asked whether the changes can be applied retrospectively. As he is aware, the Government do not generally apply tax changes retrospectively. The changes to alternative finance tax rules announced in the autumn Budget will apply from 30 October last year. The Government appreciate that some alternative finance customers will have already paid capital gains tax on refinancing arrangements, which is where this question arises from. However, to provide taxpayers with certainty over their tax position and to ensure that the law is applied in the way intended, the Government do not generally apply tax changes retrospectively and will not be doing so in this case.
More broadly, the shadow Minister asked whether we will be taking measures to ensure there is no fraud. It should go without saying that, as with any measures the Government take, we will ensure there is no fraud. That does not apply any more or less to this measure than it would to any other; we want to make sure there is no fraud in the way that any tax measures we take are used. That will be on our radar, as it would be with any other tax changes that we make.
In terms of the number of people affected, I know that the previous Government’s consultation on the alternative financing tax rules published in January last year, which closed in April, received 22 responses, including from alternative finance providers, representative groups, tax and legal professionals, academics, and consumers. This is, of course, a sector that we want to grow. It is one of the many sectors of the UK economy that will drive economic growth.
Question put and agreed to. Clause 35 accordingly ordered to stand part of the Bill. Schedule 7 agreed to. Clause 36 Statutory neonatal care pay Question proposed, That the clause stand part of the Bill.
The clause makes a consequential amendment to the shared incentive plan—SIP—to take account of the introduction of statutory neonatal care pay in the Neonatal Care (Leave and Pay) Act 2023. SIP is a tax advantage share scheme through which a company can award free shares to employees, or enable them to purchase partnership shares through salary deductions authorised by the employee. The SIP legislation requires an employer, when entering a partnership share agreement, to provide notice to inform the employee of the possible effect of salary deductions on their entitlement to social security benefits, such as statutory sick pay or statutory maternity pay.
The Neonatal Care (Leave and Pay) Act 2023 introduced provisions to enable parents whose babies require specialist care after birth to take additional paid time off work. The share incentive plan legislation must therefore be updated accordingly to reflect the introduction of statutory neonatal care pay, which may also be impacted by salary deductions. As a result of the changes made by clause 36, statutory neonatal care pay will be included in the notice that employers must provide to employees when entering partnership share agreements alongside other existing statutory payments. The clause will ensure that employees understand the potential impact of salary deductions as part of a SIP agreement on their entitlement to statutory neonatal care pay. I therefore commend the clause to the Committee.
It is a pleasure to serve under your chairmanship, Mr Mundell. As we heard from the Minister, clause 36 confirms that statutory neonatal care pay is taxable as social security income. The measure will take effect from 6 April 2025, and we support it.
It is important to understand the context in which we are discussing today’s changes; since at least 2014, there have been calls to extend parental leave and pay for parents who have premature babies and would seek neonatal care. I was pleased to stand on a manifesto in 2019 that committed to legislating to allow parents to take extended leave for neonatal care to support those new mothers and fathers who need it during the most vulnerable and stressful days of their lives.
In 2019, the previous Government launched the good work plan proposal to support families, which included proposals to do just that—introduce neonatal care leave and pay. The Government responded to that consultation, which led to the Neonatal Care (Leave and Pay) Bill, introduced as a private Member’s Bill supported by the Government. That new right, confirmed from 6 April, is expected to benefit around 60,000 new parents. It is absolutely right that these measures address some of the difficulties parents face when their baby is in neonatal care.
The impact assessment for that Bill notes that the estimated annual costs to the Exchequer of the care leave paid at statutory flat rate would be around £14 million a year on average. I wonder if the Minister has an update on whether those estimates are still correct. It also suggested that the one off cost to businesses of familiarising themselves with the new legislation was around £4.7 million, with the resulting annual cost to business estimated at £22 million. Does the Minister have updated figures on the impact of introducing those measures?
The measure we are discussing here is technical and confirm the tax treatment, but it is important—as the Minister said—that employers make clear the implications to their staff members. Can the Minister confirm what action the Government are taking to communicate proactively about the changes? As I have set out, we support this right to neonatal care and pay, and I look forward to the Minister’s response to the specific questions.
I thank the shadow Minister for his support for this measure. If I understood his comments correctly, he asked a series of questions about the Exchequer impact and estimated costs of the measure itself, whereas the clause we are talking about here is really a consequential and relatively minor technical change to what employers have to say when they notify employees who are taking part in share incentive plans. I could try to look into those questions for him after this Committee sitting, but the information that we are discussing today—the scope of this clause—is actually much more limited than his questions suggest.
This clause is really just about employers notifying employees that if they take part in a share incentive plan, it may impact their statutory benefits, which now include neonatal care pay. It does not make any changes to neonatal care pay itself, which is the subject of separate legislation that is not impacted in any way by these clauses. I would not want anyone watching the Committee or reading Hansard to be under the misapprehension that we are in any way changing neonatal care pay, which we think is very important. This is purely about making sure that employees who are considering taking part in a share incentive plan are fully informed of what impact any salary deductions may have on their eligibility for statutory benefits.
In terms of implementing the scheme, again, we may be talking slightly at cross purposes. This clause is really about ensuring that employees are properly informed about how the share incentive plan works and the implications of having salary deductions for that, rather than neonatal care pay itself. That would be a separate question to be picked up at another time. Having neonatal care pay is an important change in legislation and we are very pleased that it is part of the landscape of statutory benefits, but this clause does not impact neonatal care pay. It is purely about informing employees of the potential impact of salary deductions when they want to engage with a share incentive plan.
Clause 36 very much focuses on the share incentive plan. We want to make it clear that when entering a partnership share agreement, employers are required, as I said earlier, to provide employees with a notice outlining the possible effects of associated salary deductions on their entitlement to social security benefits and statutory payments. The clause is purely about that, and it will ensure that the notice must refer to statutory neonatal care pay alongside the other existing statutory payments. I hope that helps to clarify the scope of the clause, and that the Opposition will continue to support it.
Question put and agreed to.
Clause 36 accordingly ordered to stand part of the Bill.
Clause 37
Claim for relief on foreign income
I beg to move amendment 20, in clause 37, page 31, line 21, at end insert— “12A So much of any amount of income treated as arising to an individual under section 633 (capital sums paid to settlor by trustees of settlement) for the tax year as falls within the foreign amount of income available up to the end of the tax year. The foreign amount of income available up to the end of a tax year is the amount that would be determined, in accordance with sections 635 to 637 (amount of available income), as the amount of income available up to the end of the tax year if all income arising under the settlement from a source in the United Kingdom were ignored.”
With this it will be convenient to discuss the following: Clause stand part.
Clause 38 stand part.
Government amendments 44 to 54.
Schedule 8.
Clause 39 stand part.
Clauses 37 to 39 make changes to ensure that from April 2025, individuals moving to the UK who have not been tax resident in the UK for the 10 previous years will not pay tax on their foreign income or gains for the first four years of UK residence.
For context, the Government are removing the outdated concept of domiciled status from the tax system and replacing it with a new, internationally competitive, residence based regime from 6 April this year. Currently, where a non UK domiciled individual moves to the UK, they are able to access the remittance basis of taxation, under which foreign income and gains are not taxable unless they are brought into the UK. Similarly, when undertaking work abroad, newly UK resident, non UK domiciled individuals are able to access overseas workday relief, which means that overseas employment income is not taxable unless brought into the UK. The arrangements create a disincentive to invest in the UK and are being changed as a result of these measures.
The changes made by clauses 37 and 39 will provide full tax relief on foreign income and gains for new arrivals to the UK for their first four years of tax residence, provided that they have not been UK tax resident for 10 years before their arrival. To align with the new regime, clause 38 and schedule 8 extend the period of overseas workday relief to four years, and decouple overseas workday relief from domiciled status to align it with the new foreign income and gains regime. Claims to the relief will be capped at the lower of £300,000 or 30% of an individual’s total employment income. Furthermore, the removal of the remittance basis means that it will no longer be necessary to keep income offshore to benefit from relief.
Government amendment 20 amends clause 37 to add an additional category of income to the list of eligible incomes, which will ensure that all eligible income for relief is referenced correctly. Government amendments 44 to 53 have also been tabled to schedule 8 to ensure that the relief on travel costs for qualifying newly resident employees in the UK functions as the legislation intended. Furthermore, Government amendment 54 amends schedule 8 to clarify that it is a general direction made by HMRC, rather than a public notice.
The Government are committed to ensuring that everyone who is long term resident in the UK pays their taxes here. The new regime ensures that that will be the case, while also being more attractive than the current approach as individuals will be able to bring income and gains into the UK without attracting additional tax charges. That will encourage people to spend and invest those funds here in the UK.
I commend clauses 37 to 39 and schedule 8, along with Government amendments 20 and 44 to 54, to the Committee.
Currently, a person who is UK resident but not UK domiciled pays tax on any UK income and gains but can choose for their non UK income and gains to be taxed on a remittance basis. Part 2 of the Bill provides for the abolition of non domiciled status from April 2025, as the Minister points out, and for its replacement with a new regime for the taxation of foreign incomes and gains on the basis of UK residence. It therefore terminates the current tax regime for those who are resident but not domiciled in the UK, while creating a temporary repatriation facility for historical foreign income and gains to be brought into the UK over the next three years. Those changes will also be applied to trusts under the Bill and inheritance tax will also be brought into the new, residence based system.
Although the shape of the overall package is much the same as the one the Conservatives announced in the spring Budget 2024, there are a few notable differences on the detail. Before I move through the chapters—we will spend a bit of time on that, starting with chapter 1—I will first provide some context by noting that, net of the reforms we announced in March, Labour’s adjustments to the new regime are forecast to raise £12.7 billion over the next five years. This means the measure we are considering is the second biggest revenue raising new policy in this entire Budget. Labour’s adjustments to the temporary repatriation facility alone account for £10.6 billion.
These are significant sums, but also highly uncertain, according to the OBR. There is significant uncertainty in particular around the behavioural responses and the size of the tax base, according to the OBR’s assessment. The OBR also says it is unclear to what extent inflows to the temporary repatriation facility are additional over the long term rather than bringing forward disposals which would otherwise have attracted full rates of taxation.
When the second biggest revenue raising new policy in a Budget is so uncertain, according to the OBR, bond market jitters come as no surprise. The emphasis Labour has placed on this policy, which makes up a massive chunk of the Bill, is compounding its conundrum ahead of the OBR’s March forecast. It exacerbates fiscal instability by adding to the risk that revenues will not be as high as anticipated. This brings us back to the same old questions we have been asking, including in the Chamber today: which taxes will Labour have to raise if there is a shortfall, or which services will they have to cut? The Minister will say that we need to wait for the OBR’s revised forecasts, but will those include an update on these highly uncertain figures?
Turning specifically to chapter 1, clauses 37 and 39 introduce the new four year 100% relief on eligible foreign income and gains for those arriving in the UK who have not been UK tax residents in the 10 tax years immediately prior to their arrival. I acknowledge that that mostly mirrors the proposals we put forward in the March Budget 2024 but would be grateful if the Minister could none the less address the following points.
The hon. Gentleman raises the question of estimates around the level of revenue that would be generated by this important measure. Is he familiar with the work of Andy Summers and Arun Advani at LSE and the University of Warwick? Three years ago, in 2022, they modelled the effect of the 2017 tax reforms on non doms and used that as a basis for statistical estimates for the proposal before us. While economics is a science that does to the best it can with the data available, I think there are some quite substantial measures available on the table for this proposal.
I am afraid I have not taken the time to read the academic reports, but I greatly value and emphasise the work of the OBR, which the Conservatives established in government. The new Government have taken it forward and are already seeking to bolster its impact on the Treasury’s work. If the hon. Lady will forgive me, it is the OBR’s work that I look at, and that work says that this budgetary measure is highly uncertain. As I was pointing out, that leaves questions for markets and for the Labour parliamentary party when it comes to which taxation will have to go up and what spending will be cut if that figure is not met. I will leave that to the Minister to address.
Regardless of the uncertainty, we know from the projections that, although the tax intake should peak at about £6 billion, it tails off by the end of the period to £95 million—a huge difference. By the time this spending and the costs have been worked into the system, no matter what happens in terms of uncertainty, at the end of that tax period there will be a huge amount of money that was in the system, but which now has to be filled. This policy, if implemented, will mean that there is a hole in the system at the end of the ’29 period that will need to be filled in some way.
That is a very good point—if only I had included it in my speech. That is a classic example of an intervention that adds to the content of the debate on behalf of all those who will be impacted by this measure. It is important to look at the projections over the five year period on a year by year basis. It will be no surprise to the Minister that I look at them very carefully. I look at the timing of when the measures generate revenue, and when they do not. I could provide lots of examples of places where questions need to be asked of this Budget—indeed, we have been asking them today.
In claiming the 100% relief on foreign income and gains, an individual forfeits their eligibility for a whole host of allowances available to normal UK taxpayers, including the personal allowance'; yet even those who were previously taxed on a remittance basis for non UK income and gains would still pay tax on their UK earnings, just like everybody else. That was surely an uncontroversial element of the old regime, which did not require any attention, so why have the Government taken it upon themselves to make the tax treatment of UK income less favourable as a condition of claiming the new 100% relief—which we of course welcome?
The biggest concern that has been raised with me regarding these new reliefs by the likes of the now famous Chartered Institute of Taxation, which many of us have referred to, is the requirement to itemise and actively claim each income and gain. As far as I can recall, the technical note that we produced alongside our proposals in March 2024 did not insist on that level of specificity and detail, which is quite onerous on those applying. As a basic matter of fairness, it seems wrong that the window for making a claim is so much less than the 12 years available to HMRC to issue a compliance check, and even more so when the ability to make a consequential claim to correct an error is restricted.
The Budget claims to introduce a regime that is simpler and internationally competitive, as the Minister outlined in his speech, but those two requirements are neither of those things. I would be very grateful if the Minister can explain what exactly the benefit of doing things in that way are.
The main departure from our proposals comes with clause 38 and schedule 8, which introduce financial limitations for overseas workday relief. Is that to compensate for the additional year in which the relief will now be claimable? How significant does the Treasury expect the impact of the alteration to be? I would be grateful if the Minister can indulge me by outlining an explanation on those points.
I thank the shadow Minister for his comments. I was going to thank him for his support for these measures, but I do not know whether he explicitly said that. I think he nearly did, so I will take it as support unless he jumps in to correct me.
One of the key measures that the shadow Minister highlighted in our package of legislative measures that is the subject of clause 37 is the temporary repatriation facility, an important feature of the system we are seeking to introduce. What it does—I say this so that all Members are aware—is to introduce a reduced tax rate for remittances to encourage individuals to bring their capital to the UK and to spend and invest it here. The fact that it will raise considerable revenue is beneficial to the public finances, but it is also critical to recognise that that is a consequence of people bringing money into the UK to spend and invest here, which is something I am sure the Opposition side of the Committee will welcome as well.
The overall scheme in relation to which the TRF operates is the four year foreign income and gains regime; I set out the details of that in my earlier remarks. It is important to emphasise that this four year foreign income and gains regime is a competitive regime, focused on getting the best talent and investment we possibly can from around the world into the UK. The restriction on four year foreign income and gain regime claims that can be made during a check of a tax return is to encourage compliance with UK tax obligations, because obviously that would be an inherent part of the new system we are proposing.
The hon. Gentleman asked further questions about the other reliefs that those claiming the four year foreign income and gains relief would qualify for, and why they are being asked to report their foreign income and gains to HMRC. He made a point about his concern that the reporting requirements were too onerous. However, that information will help the Government to evaluate whether the regime is providing value for money and ensure that the relief supports the aim of encouraging talented people from around the world to come to and invest in the UK.
Having that information will enable HMRC to identify any avoidance risks and to ensure compliance within the new regime. It means that, because all UK taxpayers must report their foreign income and gains, there should be no difference for individuals who make a claim for the foreign income gains regime—because all UK taxpayers would be in that position. Additionally, failing to request information could be considered to run contrary to the UK’s international information sharing obligations, something we would want to avoid.
I hope the hon. Gentleman can appreciate that the foreign income and gains regime is a competitive one. It is one that explicitly sets out to be internationally competitive to attract people from around the world to come to the UK, to invest their money here, to work to grow the UK economy and to create jobs and wealth here in the UK. We want to make sure people have an attractive regime that they can benefit from when wanting to be part of our mission for economic growth.
I hope the hon. Gentleman also appreciates the important role that the temporary repatriation facility plays, because the shape of the income from the temporary repatriation facility that he spoke about over the scorecard period is intentional. It is by design. If we look at the tax rates charged in the different years, they are 12%, 12% and 15%. That is deliberately to encourage people to make use of the temporary repatriation facility and not leave it all to the last year—to try to ensure that people make use of it across the three years for which it operates. The key reason behind that, although of course the support for public finances is also welcome in terms of balancing the books and supporting our public services, is encouraging people who are currently non doms to bring their assets to the UK, to spend and invest them here in our country.
Obviously we had plenty of political debates around this in the previous Parliament where the previous Government introduced some of the measures, I would argue under pressure from us, although I am sure the shadow Minister would have a different recollection of how that transpired. The package of measures that we have suggested amend the proposals that we inherited to strengthen them and to make them internationally competitive.
To clarify, the point I am trying to make is that the Minister is rightly trying to ensure that this new regime makes the UK as competitive as possible so that assets flow into our country and we derive revenues from that. The first question I have is, why remove the personal allowance for those who seek to do so? The second is that although the point about the reporting is valid in terms of monitoring, does the Minister accept that that in itself could make the system more complicated and onerous to those who may consider moving their assets to this country? That may result in less money coming through the door, which is exactly why the OBR has rated this as highly uncertain revenue generation. That is the point that I am trying to make.
I thank the hon. Gentleman for his further comments. To address his point regarding the OBR, we seek to strengthen that institution, inspired not least by some of his colleagues’ views of the OBR having damaged trust in it under the previous Government. We wanted to make sure that that could never happen again, by strengthening its standing in law.
As the hon. Gentleman will know, when the OBR is looking at suggested tax changes, particularly when they are more complex than simply changing a rate—when they are more involved—it is a matter of course for degrees of uncertainty to be associated with that revenue from different measures.
The point about the design of the scheme is best answered by explaining that this is about striking the right balance. The hon. Gentleman asked whether the reporting requirements are too onerous. It is a balance between making sure that we minimise the burden on individuals, and of course the businesses that they work for—we want to make sure that we are not putting any onerous requirements on them to report information that is not needed—while, at the same time, making sure that we have the information to be able to evaluate the regime, to identify any avoidance risks and to ensure compliance. It is a constant tension within the tax system to make sure that burdens are as low as possible while ensuring that we have adequate information to prevent non compliance and so on. Those are the judgments that we have to take as Ministers, but we want to take them in the way that achieves the best possible outcome.
To conclude, the overall package that we are proposing, with the foreign income and gains regime, where foreign income and gains will see no income tax for four years, is more generous—is more attractive—than the remittance basis that is currently in place, because it means that those foreign incomes and gains will not be subject to income tax.
Therefore, I hope that our proposed package is not only positive for public finances here in the UK, but serves as an attractive regime for people around the world with talent and with entrepreneurial spirit, who want to work and invest in our country and help our economy grow, and that they can see that the scheme will help them to do just that. I commend these measures to the Committee.
Amendment 20 agreed to. Clause 37, as amended, agreed to. Clause 38 ordered to stand part of the Bill. Schedule 8 Relief on foreign employment income: consequential and transitional provision Amendments made: 44, in schedule 8, page 194, line 33, leave out “qualifying” and insert “non resident or qualifying”.
This amendment is to make parenthetical description of sections 373 and 374 of ITEPA 2003 consistent with those sections as amended by Schedule 8. Amendment 45, in schedule 8, page 194, line 39, after “Part 2” insert— “of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act)”.
This amendment provides that an employee must not be a qualifying new resident for the purposes of Chapter 5 of Part 8 of ITTOIA 2005 to benefit from a deduction under section 341 of ITEPA 2003, as well as not being a qualifying new resident for the purposes of ITEPA 2003. Amendment 46, in schedule 8, page 195, line 4, after “Part 2” insert— “of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act)”.
This amendment provides that an employee must not be a qualifying new resident for the purposes of Chapter 5 of Part 8 of ITTOIA 2005 to benefit from a deduction under section 342 of ITEPA 2003, as well as not being a qualifying new resident for the purposes of ITEPA 2003. Amendment 47, in schedule 8, page 195, line 11, after “Part 2” insert— “of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act)”.
This amendment provides that an employee can benefit from deductions under section 355 of ITEPA 2003 where the employee is a qualifying new resident for the purposes of Chapter 5 of Part 8 of ITTOIA 2005, as well as where the employee is a qualifying new resident for the purposes of ITEPA 2003. Amendment 48, in schedule 8, page 195, line 13, leave out “qualifying” and insert “non resident or qualifying”.
This amendment is to make the parenthetical description of section 373 of ITEPA 2003 consistent with that section as amended by Schedule 8. Amendment 49, in schedule 8, page 195, line 36, after “Part 2” insert— “of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act)”.
This amendment provides that an employee can benefit from deductions under section 373 of ITEPA 2003 where the employee is a qualifying new resident for the purposes of Chapter 5 of Part 8 of ITTOIA 2005, as well as where the employee is a qualifying new resident for the purposes of ITEPA 2003. Amendment 50, in schedule 8, page 196, line 7, after “Part 2” insert— “of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act)”.
This amendment provides that an employee can benefit from deductions under section 374 of ITEPA 2003 where the employee is a qualifying new resident for the purposes of Chapter 5 of Part 8 of ITTOIA 2005, as well as where the employee is a qualifying new resident for the purposes of ITEPA 2003. Amendment 51, in schedule 8, page 196, leave out line 16.
This amendment reinstates section 375 of ITEPA 2003 which defines “qualifying arrival date” for the purposes of sections 373 and 374 of ITEPA 2003. Amendment 52, in schedule 8, page 196, line 21, after “Part 2” insert— “of this Act or Chapter 5 of Part 8 of ITTOIA 2005 (see section 845B of that Act)”.
This amendment provides that an employee must not be a qualifying new resident for the purposes of Chapter 5 of Part 8 of ITTOIA 2005 to benefit from a deduction under section 376 of ITEPA 2003, as well as not being a qualifying new resident for the purposes of ITEPA 2003. Amendment 53, in schedule 8, page 197, line 17, at end insert— “2A In Part 8 of Schedule 3 to the Social Security (Contributions) Regulations 2001 (S.I. 2001/1004), in paragraph 5 (travel costs and expenses where duties performed in the United Kingdom) — (a) in the heading, for ‘non domiciled’ substitute ‘non resident or qualifying new resident’; (b) in paragraph (a), for ‘non domiciled’ substitute ‘non resident or qualifying new resident’.”
This amendment makes the parenthetical descriptions of sections 373 and 374 of ITEPA 2003 contained in the Social Security (Contributions) Regulations 2001 consistent with those sections as amended by Schedule 8. Amendment 54, in schedule 8, page 198, line 32, leave out “public notice given” and insert “general direction made”.—(James Murray.) This amendment means that the requirements of notices under new section 690D will be specified in a general direction made by HMRC rather than a public notice. Schedule 8, as amended, agreed to. Clause 39 ordered to stand part of the Bill. Clause 40 Remittance basis not available after tax year 2024-25 Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss the following: Government amendments 55 to 58.
Schedule 9.
Clause 41 stand part.
Government amendment 59.
Schedule 10.
Clause 42 stand part.
Schedule 11.
These clauses and schedules also relate to the non dom reform, which we just discussing in relation to the previous group of clauses. Clauses 40 to 42 and schedules 9 to 11 make changes to ensure that the remittance basis of taxation will no longer apply from 6 April this year. For previous users of the remittance basis, a temporary repatriation facility will be introduced, which we just discussed under the previous group of clauses. Individuals will be able to rebase their foreign assets to their value on 5 April 2017.
As we know well, the Government are removing the outdated concept of domicile status from the tax system and replacing it with a new, internationally competitive residence based regime from April this year. Currently, where a non UK domiciled individual moves to the UK, they are able to access the remittance basis of taxation, under which foreign income and gains are not taxable unless they are brought to the UK. These arrangements can create a disincentive to invest in the UK.
The changes made by clause 40 and schedule 9 will remove the remittance basis of taxation from being claimed after 6 April 2025, and this clause clarifies how this legislation operates. Although no new claims can be made, foreign income and gains that have arisen through a remittance basis prior to 6 April 2025 will continue to be taxed at the prevailing tax rates if remitted to the UK on or after this date.
Clause 41 and schedule 10 will introduce the new temporary repatriation facility for individuals who had previously claimed a remittance basis, through which they will be able to designate and remit foreign income and gains that arose prior to 6 April 2025 at a reduced rate of tax. That will include unattributed foreign income and gains held within trust structures. That facility, as we discussed in relation to the previous group of clauses, will be available for a limited time period of three years from April 2025, with a rate of 12% for the first two years, rising to 15% in the final year.
Clause 42 and schedule 11 introduce a transitional arrangement for capital gains tax purposes. That will allow those who have previously claimed a remittance basis to rebase foreign assets they held on 5 April 2017 to the value at that date, when they dispose of them on or after 6 April 2025.
Government amendments 55 and 56 amend the wording of sections 56, 61G and 61R of the Income Tax (Earnings and Pensions) Act 2003 to ensure that those sections, which cover chargeability to tax in respect of deemed employment payment, no longer make reference to domicile, which has become redundant in light of the current reforms.
Government amendment 57 amends section 22 of the Finance (No. 2) Act 1931, section 154 of the Finance Act 1996 and section 174 of the Finance Act 1993 to ensure that an individual’s domicile is no longer a relevant consideration for Treasury securities issued with free of tax for residents abroad conditions. Government amendment 58 removes references to domicile in section 614 of the Income and Corporation Taxes Act 1988, relating to relief on income for investments of certain pension schemes, which have become redundant in light of the current reforms.
Finally, Government amendment 59 corrects an incorrect reference in schedule 10. Amendments have also been made to the associated explanatory notes to accurately reflect the legislation. The Government are committed to making the tax system fairer so that everyone who is long term resident in the UK pays their taxes here.
I thank the Minister for listing the amendments before the Committee. At Davos last week, the Chancellor announced other amendments that will be made to non dom status. It is disappointing that they have not been put before the Committee, where they can be scrutinised line by line. Why is that not the case, and when will either a Committee or the House get to see those amendments?
I am glad that the hon. Lady was paying good attention to what the Chancellor was saying at Davos. The Government will introduce, as the Chancellor set out, a number of amendments to the Finance Bill on Report, to make the temporary repatriation facility simpler to use and more attractive to those who want to benefit from it, while retaining the structure announced at the Budget.
More broadly, the new regime is more attractive than the current approach, because individuals will be able to bring income and gains into the UK without attracting an additional tax charge. That will encourage people to bring funds into the UK and spend and invest them here. That is good for the UK in terms of investment and spending coming into the UK, and in terms of the tax revenue, which we spoke about in relation to the previous set of clauses. I therefore commend clauses 40 to 42, schedules 9 to 11 and Government amendments 55 to 59 to the Committee.
As the Minister said, clause 40 and schedule 9 abolish the remittance basis of taxation for foreign income and gains from 2025-26. Clause 41 and schedule 10 create a temporary repatriation facility, or TRF, to allow former remittance based taxpayers to bring historical foreign income and gains into the UK at a lower rate of tax. Clause 42 and schedule 11 allow for foreign assets to be rebased to their value in 2017 for capital gains tax purposes.
On the TRF, I gently point out to the Minister that, given that this is the single biggest revenue raising part of Labour’s policy—offering a reduced rate of tax on income and gains for a limited time—the Government are not so much closing loopholes in the tax system, as the Labour party consistently said to us when it was in opposition, and as was claimed at the Budget, but creating new loopholes, by their own definition of debates past. As the OBR has stated, there is great uncertainty over how much of that revenue is truly additional. Tom Josephs, one of the three members of the OBR’s Budget Responsibility Committee, told the Treasury Committee: “most of the revenue that we have scored in the forecast comes from what are…essentially, three years’ worth of lower tax rates…The steady state impact of the reform is much lower.”
As is so often the case, there is a mismatch between Labour’s rhetoric and the policy reality.
The same would appear to be true for the “tweaks” to the temporary repatriation facility that the Chancellor announced on the slopes of Davos just last week. That indiscretion would be more problematic had there been any substance to the Davos announcement. We are still none the wiser, because the relevant amendments have not appeared, as my hon. Friend the Member for Gordon and Buchan said. This is the Committee stage of a Finance Bill, when we scrutinise the measures of the Government of the day, line by line. The Chancellor of the Exchequer made a conscious decision to get on a plane, fly to Davos and make the announcement—not in this House, but overseas. Then, when she had the opportunity to table amendments for the scrutiny of this Committee, she decided not to do so. I feel sorry for the Minister who has had to explain this, but it is not good enough. The Minister said that we will debate it on Report, but what stopped the Chancellor from tabling amendments today, in Committee? What was it about the line by line scrutiny that meant she could not do so? I would be grateful if the Minister could try to explain it, but I think the Chancellor should be explaining it to the House.
Those points aside, the main grievance, which others have raised, relates to the changes to definition of “remittance” in schedule 9. The Chartered Institute of Taxation says the changes are badly drafted, that they should not be retroactive and that, at the very least, implementation should be delayed to allow for them to be rewritten and consulted on. Otherwise, the Minister needs to explain why, under paragraph 5(8), lending foreign income to a foreign relative outside the UK, to be kept outside of the UK, should be treated as a remittance to the UK. Paragraph 5(11), which makes it so that anything that has ever been remitted to the UK without being charged to tax under previous rules should now be treated as if it was a chargeable remittance, is described by the ICAEW as “unacceptable”; it states that the provision “should be deleted”. This is a matter on which I am not particularly expert, but the ICAEW is. I would be grateful if the Minister could explain those points, or follow up in writing to me, so that I can provide these industry bodies with an explanation.
I am always happy to respond to queries from the Chartered Institute of Taxation—they were eloquently presented by the shadow Minister—and will I make sure that any responses to those queries are forthcoming.
However, I think the central point, which the shadow Minister focused on in his comments, is about the temporary repatriation facility and our changes to that. The Chancellor was very clear that these changes, which she mentioned at Davos, are designed to make the system simpler and more attractive. As he will know, Finance Bills are routinely amended both in Committee and on Report by the Government to ensure that the best possible legislation is in place before a Finance Bill gains Royal Assent.
The new temporary repatriation facility, which we are setting up under these clauses, includes rules concerning how income and gains in a trust structure are matched to beneficiaries. These are complex things and the amendments will simplify that process. To provide absolute clarity, the amendments to the temporary repatriation facility, which the Chancellor referred to, are separate from the amendments that we are debating today in Committee, which clarify specific aspects of the legislation and ensure that the policy works as intended.
Collectively, the Government amendments before the Committee ensure that the legislation works as intended, and the amendments the Chancellor mentioned at Davos are designed to make the system simpler and more attractive. If it is a win win, where it does not have an impact on the income—
I think Opposition Members are somewhat confused. The Chancellor committed to bringing an amendment forward. I know that the Minister says it will be tabled at a later stage, but why is it so complex that it cannot be considered today, so that it can be scrutinised by the Opposition?
At the risk of repeating myself, amendments are routinely brought forward in Committee and on Report, and they are scrutinised at both stages of the Bill. The intention is to make sure that the legislation is in the best possible place by the time it gets to Third Reading and receives Royal Assent.
The focus for us is to make sure that this legislation works as well as possible. We are pragmatic about that; we want to make sure that it functions effectively. That is why we are making technical changes by way of Government amendments today, and why there will be further amendments on Report to make the system simpler and more generous, in the way that the Chancellor has set out.
This is about achieving a system that makes the tax system both fairer, in the ways that we have set out, and as simple and attractive as possible for people who want to come to the UK and bring their money to the UK, to invest and spend it here, which will help us to grow the economy.
Question put and agreed to. Clause 40 accordingly ordered to stand part of the Bill. Schedule 9 Income Tax and Capital Gains Tax: Remittance Basis and Domicile Amendments made: 55, in schedule 9, page 208, line 24, leave out “sections 56(5)(a), 61G(5)(a) and 61R(5)(a)” and insert “sections 56, 61G and 61R”
This amendment together with Amendment 56 omits subsections that have become redundant in light of the ending of the relevance of domicile to income tax. Amendment 56, in schedule 9, page 208, line 25, leave out from “payment)” to end of line 27 and insert “, omit subsections (4) and (5).”
This amendment together with Amendment 55 omits subsections that have become redundant in light of the ending of the relevance of domicile to income tax. Amendment 57, in schedule 9, page 210, line 34, at end insert— “Premium trust funds 21A In section 174 of FA 1993 (premium trust funds), omit subsection (6)(a).
FOTRA securities 21B (1) In section 22 of F(No.2)A 1931 (Treasury power to issue securities with a FOTRA condition)— (a) in subsection (1)(b), for “persons who are neither domiciled nor resident in the United Kingdom” substitute “exempt persons”; (b) after subsection (1) insert— “(1A) For the purposes of subsection (1), the following persons are “exempt persons”— (a) individuals who are not resident in the United Kingdom, and (b) persons who are not individuals and are neither domiciled nor resident in the United Kingdom.”
(2) In section 154 of FA 1996 (FOTRA securities), in subsection (1)— (a) after “applies,” insert “where the person with the beneficial ownership of the securities is not an individual and”; (b) for “the person with beneficial ownership of the securities” substitute “that person”.
(3) Any security issued before 29th April 1996 with a FOTRA condition shall be treated in relation to times on or after 6 April 2025 as if— (a) it were a security issued with the post-1996 FOTRA conditions (and with no other FOTRA condition), and (b) the post-1996 FOTRA conditions had been authorised in relation to the issue of that security by virtue of section 22 of F(No.2)A 1931.
(4) In sub paragraph (3) — “a FOTRA condition” means a condition about exemption from taxation authorised by section 22 of F(No.2)A 1931; “the post-1996 FOTRA conditions” means the conditions about exemption from taxation with which 7.25% Treasury Stock 2007 was first issued by virtue of section 22 of F(No.2)A 1931.”
Amendment 58, in schedule 9, page 210, line 34, at end insert— “Reliefs in respect of income from investments etc. of certain pension schemes 21C In section 614 of the Income and Corporation Taxes Act 1988 (exemptions and reliefs in respect of income from investments etc. of certain pension schemes), in subsections (4) and (5), omit “not domiciled and”.”—(James Murray.) This amendment removes references to domicile in provisions of the Income and Corporation Taxes Act 1988 relating to relief on income from investments of certain pension schemes. Schedule 9, as amended, agreed to. Clause 41 ordered to stand part of the Bill. Schedule 10 Temporary repatriation facility Amendment made: 59, in schedule 10, page 214, line 6, leave out paragraph (a) and insert— “(a) Part 2 of this Schedule (exemptions etc for designated qualifying overseas capital),”—(James Murray.) This amendment corrects an incorrect reference. Schedule 10, as amended, agreed to. Clause 42 ordered to stand part of the Bill. Schedule 11 agreed to. Clause 43 Trusts: connected amendments, transitional provision etc Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss the following: Government amendments 60 and 61.
Schedule 12.
Clause 43 and schedule 12 make changes to ensure that the foreign income and gains arising within settlor interested trust structures will no longer be protected from tax for non domiciled and deemed domiciled individuals who do not qualify for the four year foreign income and gains regime, which we have been discussing in relation to earlier groups of clauses.
As we have established in previous debates in Committee, the Government are removing the outdated concept of domicile status from the tax system and replacing it with a new internationally competitive residence based regime from April of this year. Currently, where a non UK domiciled individual settles an offshore trust, foreign income and gains arising within that trust are protected from UK tax, which remains the case even if the individual is later deemed domicile.
The changes made by clause 43 and schedule 12 will mean that from 6 April 2025, foreign income and gains arising in settlor interested trusts will be taxed on the same basis as UK domiciled settlors, unless the settlor is eligible for and claims the new four year regime, regardless of when the trust was established. In addition, the trust protections will not apply to the legislation on the transfer of assets abroad. This will mean that all income arising in a settlor interested trust or an underlying company can be taxed on a UK settlor as it arises if the transferor has the power to enjoy the income or receives capital sums from the trust or company.
Government amendments 60 and 61 ensure that the onward gifting provisions continue to operate effectively, as under the existing regime. These provisions ensure that taxpayers cannot avoid a liability to tax by diverting benefits to other persons not liable to that charge. The Government are committed to making the tax system fairer so that everyone who is a long term resident in the UK pays their taxes here. The new regime ensures this while also being more attractive than the current approach, as individuals will be able to bring income and gains into the UK without attracting an additional tax charge. As we have debated already, this will encourage them to spend and invest these funds here in the UK. Therefore, I commend these provisions to the Committee.
Clause 43 and schedule 12 mirror the proposals that we set out in March 2024. The Minister will therefore be very pleased to hear that I have not picked up any significant murmurings of discontent on this clause, and I have no further comments.
I thank the shadow Minister and encourage him to respond in similar terms in future.
Question put and agreed to. Clause 43 accordingly ordered to stand part of the Bill. Schedule 12 Trusts: connected amendments, transitional provision etc Amendments made: 60, in schedule 12, page 238, leave out lines 21 to 23 and insert— “(b) the original recipient— is liable neither to income tax nor to capital gains tax by reference to the amount or value of the original benefit, or is a qualifying new resident for the tax year in which the original benefit is provided,”.
This amendment expands the scope of the onward gifting rule to circumstances where benefits are routed via individuals who are UK resident but who are not themselves within the scope of the benefits charge (because they are not the settlor or a close family member). Amendment 61, in schedule 12, page 239, line 41, at end insert— “(5A) Where the original recipient is liable neither to income tax nor to capital gains tax by reference to the amount or value of part only of the original benefit, this section applies as if the two parts of the original benefit were separate benefits.”—(James Murray.) This amendment supplements Amendment 60. Schedule 12, as amended, agreed to. Clause 44 Excluded property: domicile test replaced with long term residence test Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss the following: Clauses 45 and 46 stand part.
Government amendments 62 to 65.
Schedule 13.
Clauses 44 to 46 and schedule 13 make changes to replace the current domicile based system of inheritance tax with the new residence based system. Currently, an individual’s domicile status determines whether their non UK assets are in scope of inheritance tax. The non domiciled individual’s personal non UK assets are not in scope until they become deemed domiciled. However, if such assets are placed into a trust they will remain out of scope in perpetuity, even if an individual later settles in the UK.
The changes made by clause 44 will mean that from April this year, an individual will be in scope for inheritance tax on their personal, non UK assets if they have been resident in the UK for at least 10 out of the least 20 tax years. An individual will then remain in scope for between three and 10 years after leaving the UK, depending on how long they were resident in the UK.
The changes made by clause 45 will mean that, subject to transitional points, any non UK assets that an individual places in a trust will be liable for inheritance tax charges when the settlor is a long term resident. This will also apply to such assets treated as owned by a beneficiary who is a long term UK resident. Although non UK assets in existing protected trusts will be in the 10-yearly inheritance tax charging regime when the settlor is a long term resident, it is important to note that those non UK assets in existing protected trusts will be kept out of the settlor’s or beneficiary’s death estate. Any new assets put into trust will be fully in scope for trust charges or charges on a death whenever the settlor is a long term UK resident. This matches the current treatment of people with UK domicile.
Clause 46 and schedule 13 make changes to the remaining inheritance tax areas to depend on a person’s long term UK residence instead of their domicile, and to provide for commencement. For example, a surviving spouse or civil partner can elect to be treated as a long term UK resident instead of electing to be treated as a UK domicile. This will have effect for 10 years.
Four minor amendments, 62 to 65, have been made to schedule 13 to insert a missing word, to correct cross references to the new definition of excluded property in a settlement, and to ensure that all fiscal domicile definitions are removed unless they are needed for a double taxation convention to work.
The Government are committed to making the tax system fairer, so that everyone who is a long term resident in the UK pays their taxes here. The new regime therefore ensures that individuals, in the future, will not be able to keep their assets out of scope of inheritance tax indefinitely. At the same time, our approach ensures that non UK assets in existing protected trusts will be kept out of the settlor’s or beneficiary’s death estate. I therefore commend clauses 44 to 46 and schedule 13, alongside Government amendments 62 to 65, to the Committee.
As the Minister set out, clauses 44 to 46 and schedule 13 bring inheritance tax into the residence based system so that it applies to non UK assets owned outright or held in trusts. This was our stated intention in March 2024, subject to consultation.
As the Minister set out, non UK assets will now be in scope for inheritance tax where an individual is considered a long term resident—that is, if they have been resident in the UK for at least 10 of the last 20 tax years that immediately precede the chargeable event. This is subject to a tapered 10-year tail where a person who was resident in the UK for 20 years or more would no longer be considered long term resident after 10 consecutive tax years of absence, whereas a person with 19 years of UK residence in the last 20 years would no longer be considered a long term resident after nine years, and so on down to a minimum of three years for those with between 13 and 10 years of residence in the last 20 years.
As far as I am aware, there are no details of consultations which have taken place and nothing has been published on this. I am told by the likes of the Chartered Institute of Taxation that certain provisions such as the tapering of the 10-year tail were put forward during that process. I would be grateful if the Minister could confirm to the Committee the nature and extent of the consultation that has taken place by the Government to inform the creation of these clauses.
One point made by the Chartered Institute of Taxation is that there is now an anomaly whereby individuals who leave the UK before the new regime begins on 6 April are considered long term residents when the legislation comes into effect, meaning they will incur an inheritance tax exit charge for trusts they have settled when their long term resident status ends. As the Chartered Institute of Taxation points out, it seems unfair that a person who has already left the UK should face an exit charge due to legislation that comes into effect after their departure. I would be grateful if the Minister could explain that anomaly, which seems a little unfair. According to the Office for Budget Responsibility, these clauses raise very little revenue—I think it is in the range of £100 million a year on average—so the Government can afford to get this right. I would really appreciate a fuller explanation.
I thank the shadow Minister for his remarks. He asked about the consultation and how we developed these policies. It is worth pointing out that there has been quite extensive discussion about the legislation on non domicile status. The Government published a technical note at the autumn Budget in October 2024 explaining the proposed changes to provide certainty ahead of the rules coming into force in April 2025. Officials have engaged extensively with interested specialists and individuals over the summer and throughout the development of this policy. Many elements, such as the tapered tail and the transitional arrangements, were proposed by representative bodies. Those representative bodies also told us that people want certainty about the proposed new rules as early as possible, which is why we published information ahead of the Finance Bill and discussed it with people who might be affected and have views to add.
I will write to the shadow Minister with details on the very specific question he asked, so he has that information for reference. The objective with this policy is to achieve our aim of making the tax system fairer while making the new regime as attractive as possible and internationally competitive to encourage people to come to the UK to invest here, work here, create jobs and wealth, and grow our economy. That is the balance that we seek to strike. We have done that in close consultation and discussion with those affected to get the legislation to the best possible place.
Question put and agreed to. Clause 44 accordingly ordered to stand part of the Bill. Clauses 45 and 46 ordered to stand part of the Bill. Schedule 13 Inheritance tax Amendments made: 62, in schedule 13, page 266, line 35, at end insert— “(2A) In subsection (1)— (a) in the definition of “excluded property”, for “6 and 48” substitute “6, 48 and 48ZA”; (b) omit the definition of “formerly domiciled resident”.”
This amendment updates the definition of “excluded property” in section 272 of the Inheritance Tax Act 1984 in consequence of the amendments made by clause 45. It also removes the now redundant definition of “formerly domiciled resident”. Amendment 63, in schedule 13, page 266, line 36, at beginning insert “Also”.
This amendment is consequential on Amendment 62. Amendment 64, in schedule 13, page 267, line 25, at end insert— “28A “(1) Schedule A1 (non excluded overseas property) is amended as follows.
(2) In paragraph 1, for “48(3)(a)” substitute “48ZA”.
(3) In paragraph 5(2)(a), for “or 48(3)(a), (3A) or (4)” substitute “, section 48(4) or section 48ZA”.”
This amendment is consequential on clause 45 (which amends section 48 of the Inheritance Tax Act 1984 and inserts new section 48ZA). Amendment 65, in schedule 13, page 271, line 39, at end insert— “(1A) In construing section 267 of IHTA 1984, so far as saved by sub paragraph (1), the repeal of the definition of “formerly domiciled resident” by paragraph 28(2A)(b) is also to be disregarded.”—(James Murray.) This amendment clarifies that the definition of “formerly domiciled resident”, which is being removed from the Inheritance Tax Act 1984 by Amendment 62, will still be relevant in construing section 267 (which by virtue of paragraph 48 of Schedule 13 will continue to apply for certain limited purposes). Schedule 13, as amended, agreed to. Clause 54 Alternative finance: land in England, Scotland or Northern Ireland Question proposed, That the clause stand part of the Bill.
With this it will be consider clause 55 stand part.
Clauses 54 and 55 make changes to alternative finance tax rules to put alternative and conventional financing arrangements on a broadly level playing field for annual tax on enveloped dwellings. As with the changes made in clause 35, which we debated earlier, these changes promote financial inclusion for those who choose to use alternative forms of finance, either for religious reasons or otherwise.
The annual tax on enveloped dwellings is an annual charge payable by non natural persons, such as companies, owning UK residential property valued at more than £500,000. It is intended to discourage non commercial enveloping of residential property in a company in order to avoid other property related taxes, such as stamp duty land tax. The charge is not intended to apply to individuals who use alternative finance to purchase residential property.
These clauses fix an issue whereby an unintended annual tax on enveloped dwellings may arise on individuals and financial institutions when using certain alternative finance arrangements. The changes made by clause 54 would ensure that an annual tax on enveloped dwellings charge does not arise just because alternative finance has been used to purchase the property. It does that by disregarding the financial institution’s interest in the property, so that the tax liability is assessed on the basis of the client of the alternative finance arrangement.
Clause 55 fixes an error with the existing legislation and ensures that the treatment for annual tax on enveloped dwellings is the same for those entering into alternative finance arrangements in Wales as it is for those in the rest of the UK.
These clauses, alongside clause 35, which we debated earlier, deliver on the Government’s commitment to the continued strength of the UK Islamic finance sector by putting alternative and conventional financing on a broadly level playing field in their treatment for annual tax on enveloped dwellings. I therefore commend the clauses to the Committee.
As we heard from the Minister, these clauses extend existing alternative finance provisions to ensure that the ATED charge arises only where the client is a person within the scope of that charge. Clause 54 extends those provisions for land in England, Scotland or Northern Ireland and clause 55 does so for land in Wales.
As we discussed when debating clause 35, alternative financing is a method of raising finance involving the sale, purchase and renting of assets in circumstances where conventional financing would involve lending at interest. Although based on Islamic financing, it can be used by both followers and non followers of that faith. These changes reflect the approach that we took in government, which the new Government have taken on, to ensure, where possible, a level playing field between conventional and alternative finance transactions. We support the changes.
The ATED is an annual charge payable by companies, partnerships with a company member, and collective investment vehicles that own residential property valued at more than £500,000. An enveloped dwelling is a property that is used or can be used as a residence—for example a house or flat—and that is owned through a corporate structure. The amount of ATED due is worked out through a banding system. The current chargeable amount for properties worth more than £500,000 and up to £1 million is £4,450. If a property is worth more than £20 million, the charge is £292,000. I would be grateful for any data that the Minister has on how much is raised by this tax every year, including any per band figures. The tax information and impact note includes an annual £5 million negative impact on the Exchequer from 2025 through to 2030. Will the Minister explain what lies behind that? It would also be useful to know how many individuals using alternative finance will be impacted by these changes.
I am grateful to our friends at the Chartered Institute of Taxation for their comments on these measures. They have queried what they term the Government’s piecemeal approach to levelling the playing field for alternative finance arrangements. The CIOT has said that the current legislation does not provide for a look through to the underlying buyer for stamp duty land tax reliefs such as charities relief, group relief and relief for acquisition by a house builder from an individual acquiring a new dwelling. The effect is that that relief is denied when alternative finance arrangements are in place. This is inconsistent with a policy of providing parity of treatment between alternative finance and conventional financing, and should also be addressed. Will the Minister confirm whether he will consider such changes and, when horizon scanning, consider adopting a more consistent approach more widely to level the playing field? As I have set out, we support these changes. I hope that the Minister will respond, briefly, to my questions.
I thank the hon. Gentleman for his support on this matter. He asked about the receipts from ATED. The most recent figures are from 2022-23 and show £124 million of receipts from ATED overall. I hope that puts in context the small, £5 million impact of the changes that these clauses and clause 35 would introduce.
The hon. Gentleman also asked how many people are impacted by these changes. We recognise that they will benefit a small number of finance providers and individuals, and anticipate that the number of people who will benefit will be low. However, it is important to give this sector the confidence to grow and to ensure a level playing field. The shadow Minister agreed that it is important to ensure that the Islamic or alternative finance sector has that level playing field, so that it can contribute towards our country’s economic growth. These clauses, along with clause 35, seek to achieve that goal.
Question put and agreed to. Clause 54 accordingly ordered to stand part of the Bill. Clause 55 ordered to stand part of the Bill. Clause 56 Testing of FMI technologies or practices Question proposed, That the clause stand part of the Bill.
Clause 56 introduces a power enabling changes to be made to stamp duty and stamp duty reserve tax in relation to financial market infrastructure sandboxes. The Government are committed to developing the UK’s capital markets and, as part of that, have announced that they will take forward the private intermittent securities and capital exchange system, known as PISCES. That power will be used to provide an exemption from stamp duty and stamp duty reserve tax for PISCES transactions. This will be a carefully targeted exemption, representing a cost effective approach to boosting growing private companies and supporting our capital markets.
PISCES is a new type of trading platform that will allow private companies to have their shares traded intermittently, supporting private companies to scale and grow, and boosting the pipeline of future initial public offerings in the UK. Using powers from the Financial Services and Markets Act 2023, which was introduced by the previous Government, this Government will establish the regulatory framework for PISCES in a financial market infrastructure sandbox. That will allow the Treasury to temporarily modify or disapply certain pieces of legislation, to support market operators to trial new or developing technologies or practices, while still achieving appropriate regulatory outcomes. The Government published a response to the PISCES consultation paper at Mansion House on 14 November 2024. As part of this, the Government will lay a statutory instrument to establish the PISCES sandbox by May this year.
Clause 56 will allow the Treasury to make stamp duty and stamp duty reserve tax changes by statutory instrument, in connection with any exercise of the time limited FMI sandbox power in the Financial Services and Markets Act 2023. The power will be used to introduce an exemption from stamp duty and stamp duty reserve tax for PISCES transactions, as announced at the autumn Budget. That exemption will boost the attractiveness of PISCES, incentivising investors and private companies to participate, and it demonstrates the Government’s commitment to the success of PISCES as part of our wider ambitions to reinvigorate UK capital markets and to deliver growth. The Government will introduce this exemption ahead of the first PISCES trading events. The effect of the exemption will be time limited, in line with the duration of the PISCES sandbox.
Clause 56 introduces a stamp duty and stamp duty reserve tax power in relation to financial market infra structure sandboxes that will be used to provide an exemption for PISCES transactions. This will increase the attractiveness of PISCES and demonstrates the Government’s commitment to ensuring its success. The announcement of the exemption has been welcomed by stakeholders.
As we heard from the Minister, clause 56 introduces a power enabling the Treasury to make stamp duty and stamp duty reserve tax changes in connection with any exercise of the time limited financial market infrastructure sandbox power. This power will be used to provide an exemption from stamp duty for PISCES transactions, and we warmly welcome these measures.
Like many other aspects of the Bill that we have discussed today, the PISCES trading platform was the previous Government’s idea, as part of our commitment to trial new or developing technologies and practices to help companies to scale and grow. While in government, we introduced significant reforms to the UK listings regime, supporting public markets and companies choosing to list in the UK. That included implementing Lord Hill’s listing review reforms. The PISCES consultation noted: “A key challenge for private companies is that, at early stages in their growth, there are no standardised ways for shareholders to realise their gains…or to allow companies to rationalise their shareholder base by providing their early investors an exit route. Similarly, it is harder for investors to access companies that are not yet operating on public markets.”
PISCES provides a regulatory framework for the intermittent trading of private company shares on a multilateral system. I welcome the Government’s support for PISCES, which will form an important part of the UK’s offer to companies seeking to grow and list in the UK.
I would be grateful if the Minister provided an update on the impact that PISCES is expected to have by incentivising current and potential investors to buy shares on the system, bringing greater transparency and efficiency. I note that PISCES will run for an initial period of five years. Will the Minister commit to regularly updating the House on progress?
There will not be a public market style market abuse regime; instead, the Financial Conduct Authority will be given rule making powers over a disclosure regime. I am sure the answer will be yes, but can the Minister confirm that it is her expectation that the FCA will be properly focused on growth as it devises those rules, and that it will ensure that any new rules are proportionate to the objective that we are seeking to achieve?
The provisions of clause 56 relate specifically to exempting PISCES share transfers from stamp duty and stamp duty reserve tax, a measure that, in their response to the consultation, UK Finance and the Association for Financial Markets in Europe said “should be strongly considered by HMT in order to help incentivise use of the platform”.
They added that it is important “to generally reduce frictions for companies and shareholders using the platform as far as…possible,”
and the FCA rules are important in that respect.
Stamp duty and SDRT both tax transactions that transfer securities between parties in exchange for payment. In 2023, the then Government held a consultation entitled “Stamp Taxes on Shares modernisation” and proposed a mandatory single tax on securities instead of separate taxes for electronic transfers and paper instruments. It was suggested that that approach would reduce complexity, and it was widely supported in the call for evidence responses and by the working group that was established. In considering the application of both taxes, I would be grateful if the Minister provided an update on this Government’s view on the previous Government’s proposals, and whether she plans to bring forward any changes in the future.
As I have set out, we support the measures, but I would be grateful for responses to the points I have raised.
I thank the shadow Minister for the way he has approached this subject. He is correct, of course, that the previous Government consulted on PISCES in March last year. We responded to the consultation in November, alongside the Mansion House speech delivered by my right hon. Friend the Chancellor.
I am glad that there is cross party agreement on these issues. When we were in opposition, we were very constructive in our feedback on such proposals. The shadow Minister is right that there are other reforms in this area, which came from the Lord Hill listings review and others—there were other reviews pertinent to capital markets when the Conservative party was in government.
The shadow Minister asked me a number of questions. On estimating the impact, it is really important to note that many stakeholders in the City and across financial services, not least the Investment Association, have welcomed this innovation. We know that investors and those in the market are interested in it, and I think there is great optimism about the demand for shares on PISCES. We still have to lay the statutory instrument, but the innovation is of interest to Members across the House, so I am very happy to update it on the development of PISCES.
On the shadow Minister’s questions about the FCA, we stress to the financial services regulators at every opportunity that any new rules should be proportionate, and I assure him that that is how I will approach my work with the FCA. On his final question, although I am quite new to this position, I am familiar with the demands for the simplification of stamp duty and stamp duty reserve tax—we might make it a little bit easier to say, let alone to pay. I will absolutely prioritise looking at simplification, because any kind of simplification is good for the market and helps to get things going. I am happy to look at that, but I cannot give the shadow Minister an exact answer now.
Question put and agreed to. Clause 56 accordingly ordered to stand part of the Bill. Clause 57 Rate bands etc for tax years 2028-29 and 2029-30 Question proposed, That the clause stand part of the Bill.
The clause makes changes to the inheritance tax thresholds so that they continue at the current levels in 2028-29 and 2029-30. Subject to reliefs and exemptions, inheritance tax is payable if the net value of an estate exceeds the respective thresholds for two bands: the nil rate band, for which the threshold has been £325,000 since 2009-10, and the residence nil rate band, for which the threshold has been £175,000 since 2021. Those thresholds rise with the consumer price index each year, but have in recent years been frozen until April 2028, by the previous Government.
The changes made by clause 57 will fix the threshold at current levels for a further two years, until April 2030. This will raise £355 million in 2029-30.
We heard earlier that the thresholds for income tax will be unfrozen as of 2028; why will the thresholds for inheritance tax not be? What impact will that have on, for example, agriculture and business property reliefs? Have the Government done an assessment of the number of additional estates that will be brought into inheritance tax beyond 2028, and how many of those will be family farms?
Broadly speaking, the reason why we have had to take a number of decisions, including some of the more difficult decisions in the Budget, is the fiscal inheritance from the previous Government. I do not need to spend time in Committee rehearsing the arguments on that, because they are well known and widely accepted. We inherited a mess from the previous Government and had to take difficult decisions at the autumn Budget to fix that problem, put the public finances back on an even footing and get public services back on their feet. Extending the freeze for inheritance tax thresholds is one of many difficult decisions we had to take.
On the number of estates that will pay inheritance tax as a result of the freeze, fixing the nil rate bands is forecast to increase the number of tax paying estates by 1,400 in 2028-29 and by 2,900 in 2029-30. That means the proportion of all UK deaths subject to inheritance tax will rise by 0.2 and 0.4 percentage points in ’28-29 and ’29-30 respectively, when compared with the thresholds rising with CPI. If we look at all inheritance tax measures, the latest forecast indicates that 37,700 estates will have an inheritance tax liability in ’24-25, which equates to 5.8% of all estates. That will increase to 66,600 estates in ’29-30, which equates to 9.5% of estates. I hope that helps to put the measures in context.
We have debated the specific changes to agricultural and business property reliefs several times, and I have shared with the hon. Member for Gordon and Buchan the data on that, which shows the limited impact of the freeze in terms of the number of estates affected. Most estates will not be subject to any inheritance tax because of the way we have designed the reforms to agricultural property relief and business property relief. We have had several other debates on that issue in this place.
The hon. Member for Gordon and Buchan asked about one specific part of the system, but the two rates affected by clause 57 relate to the inheritance tax thresholds that apply to all estates. As I said in my response to her intervention, the reason why the Government are taking these decisions and taking forward measures like this is to repair the public finances, given our inheritance from the previous Administration. Fixing the inheritance tax thresholds for a further two years contributes to putting the public finances back on an even footing. I will defend at every possible opportunity our decision to restore economic stability to the public finances in the UK, because without economic stability, it is not possible to boost investment and growth in the way we are determined to do.
Clause 57 fixes the inheritance tax thresholds at their current levels for a further two tax years, as the Minister set out. The nil rate band, which remains fixed at £325,000, has been unchanged since 2009. The residence nil rate band, which comes into play when a person leaves a property to their direct descendants when they die, was introduced at £100,000 in 2017-2018 by a Conservative Government, before being increased by £25,000 in succeeding years. In reaching the current level of £175,000, we delivered on our manifesto pledge to create an inheritance tax threshold for married couples and civil partners of up to £1 million. Since then, the legislative default is for the thresholds to be increased in line with the consumer prices index, although Parliament agreed to override that provision in the aftermath of the pandemic and to maintain the current thresholds to 2027-2028.
Although we do not oppose the measures, HMRC has reported that the Labour Government’s decision to extend the freeze on the current thresholds for a further two years will, as the Minister just set out, increase the number of tax paying estates by 1,400 in 2028-2029 and by 2,900 in 2029-2030. It was perfectly reasonable for my hon. Friend the Member for Gordon and Buchan to ask why this Labour Government have chosen to unfreeze income tax in 2028 but not inheritance tax. I am afraid the answer we got was not good enough in the context of a Budget and a series of measures that have spent £8 billion on GB Energy, an energy company that will not produce any energy or reduce any energy bills; £7 billion on a national wealth fund, which basically means repainting the UK Infrastructure Bank building; and £9 billion on union pay deals that came with no reform and no productivity gains, but massive pay rises that, by the way, the OBR has assessed as inflationary.
Sure enough, inflation has gone up and interest rates are going to stay higher for longer. It is mortgage payers who will pay the price. That is the state of the public finances that Labour inherited. While we are on the subject, Labour inherited the fastest growth in the G7, half the deficit—[Interruption.] It is true. Labour Members do not like facts, and we know they are not good with numbers, but being the fastest growing economy in the G7 is a pretty good inheritance. On top of that, the deficit was 50%—[Interruption.] Even the Liberal Democrats are reacting.
This is a very important point. People out there want to know why these difficult decisions are being made. It is important to set out the facts on how the economy was doing when the Government came into office. There was 2% inflation; it is now higher. The deficit was half of what it was. These are important factors. It was very reasonable of my hon. Friend the Member for Gordon and Buchan to point out the dichotomy and the choices that this Government have made.
The election last year was momentous: it was a landslide election for the new Government. I note the hon. Gentleman’s glowing impression of the inheritance from the previous Government; where did it go wrong?
Where it has gone wrong is that the Labour party said pre election that it would not increase national insurance, but has now gone back on that. Labour said it would not hit farmers and would support them, but we now have the family farm tax. We are slightly veering off topic, as Mr Mundell will point out, but I say gently to the hon. Gentleman that although I hope he retains his seat at the next election—[Laughter.] The Chancellor, who is completely out of her depth, has made his life a little more difficult. He is laughing now but I am not sure he will be in four years.
In the context of more drastic changes to inheritance tax elsewhere in the Budget, and the changes to agricultural relief in particular, my hon. Friend the Member for Gordon and Buchan asked about the Government’s assessment of how many of the estates being brought into the regime as a result of the threshold freeze are family farms. I did not quite hear an answer. On behalf of all the farmers we all represent, I say it would be good to hear the Treasury’s estimate as to how many family farms will be impacted.
Ministers frequently cite the inheritance tax thresholds in mitigation of their decision to introduce the family farm tax, but that mitigation is being steadily eroded by inflation. By the time the family farm tax comes into effect next year, Labour’s excuses will be worth even less than they are today, not least because the OBR forecasts that inflation will be higher for longer under Labour. It has already gone up in this short period. It is a shameful exercise in how not to govern, and we will be holding the Government to account going forward.
That was a fairly wide ranging response from the shadow Minister to what is quite a straightforward clause. I could not help but notice that he began by saying that he supported what we are doing in the clause, that he understood that we needed to take tough decisions and that he will not oppose the decision to extend the freeze to inheritance tax thresholds—which the Conservatives began—for a further two years. He then proceeded to explain why he did not support it. I know the Opposition have not made their policy on many things, but it seems that even individual Members have not made up their minds.
I was pointing out the discrepancy in how, as we covered earlier, the Government are unfreezing income tax—apparently, although they are not legislating for it—but keeping the freeze on inheritance tax, which I pointed out that we did, not least for public finance reasons. Not only that, but the freeze has also been used as a mitigation against the disgraceful family farm tax that has impacted many of our farmers. Every year that inflation goes up—and it is going up under Labour—that mitigation goes away. That was the point I was trying to make, and it would be great if the Minister could address it.
The shadow Minister alleges that there is some discrepancy on this side of the Committee; I feel like there is some discrepancy within his own views. I return to the central point that he seemed to begin by saying that he welcomed our measures—that he supports them and understands why tough decisions have to be taken—but then seemed to explain why he did not support them.
The shadow Minister asked why we decided to extend the threshold freeze for inheritance tax while not, for instance, increasing income tax rates; that is a political choice. It is a difficult choice, but it is a political choice. As a Government we have made the choice to make sure that we do not raise income tax. We went into the election saying that we would not raise taxes on working people, and we have kept that pledge through our policies on income tax, employee national insurance and the rate of VAT. We made those commitments and we are honouring them.
Will the Minister consider the fact that the increase in national insurance has harmed many companies that have really struggled? An increase in the top rate of income tax or capital gains tax would at least have hit organisations that are making proper profits and proper money.
The debate is only in the context of the clause. If the Minister feels he can find a context, he can respond.
I will attempt to link that question to inheritance tax thresholds. I am thinking rapidly on my feet and struggling somewhat. With your permission, Mr Mundell, I will respond briefly to the hon. Gentleman’s point about the difficult decision—one of the toughest we took in the Budget—to increase employer national insurance contributions. We did not want to have to take that decision, but we had to take a series of difficult decisions because of the state of the public finances. We recognise that it was difficult for businesses as well. What is critical for businesses, and for the economy more widely, is having the public finances in balance, meeting our fiscal rules and ensuring that we have stability in the economy. As I said earlier, without that, the investment in growth that we are determined to pursue will not have the right foundations.
I will return to inheritance tax thresholds. I set out the number of estates that will be affected as a result of the thresholds. I do not know whether the shadow Minister is aware of the data that has been put out on the changes to agricultural property relief and business property relief. The number of estates affected that claim agricultural property relief, and agricultural property relief with business property relief, is estimated to be up to 530 in ’26-27. I have referred to that information in the Chamber several times, and it was in the letter that the Chancellor sent to the Treasury Select Committee.
To conclude, although the shadow Minister’s position is confusing, I welcome the Opposition’s support for the measures.
Ordered, That the debate be now adjourned.—(Christian Wakeford.)
Adjourned till Thursday 30 January at half past Eleven o’clock.
Written evidence reported to the House
FB 01 Institute of Chartered Accountants in England and Wales (ICAEW)’s Tax Faculty – Clause 25 and Sch 5 Furnished holiday lettings
FB 02 Institute of Chartered Accountants in England and Wales (ICAEW)’s Tax Faculty – Clause 31 and Sch 6 Employee Ownership Trusts
FB 03 Institute of Chartered Accountants in England and Wales (ICAEW)’s Tax Faculty – Clauses 21 and 37 to 46 and Schedules 8 to 13 – Replacement of special rules relating to domicile
FB 04 Association of British Insurers (ABI)
FB 05 Association of Taxation Technicians – Clauses 5 and 6
FB 06 Association of Taxation Technicians – Clause 24
FB 07 Association of Taxation Technicians – Clauses 37 to 39
FB 08 Chartered Institute of Taxation – Clauses 19 to 22
FB 09 Chartered Institute of Taxation – Clauses 25, 35, and 54 and 55
FB 10 Chartered Institute of Taxation – Clause 31
FB 11 Chartered Institute of Taxation – Clauses 57 to 62
FB 12 Chartered Institute of Taxation – Part 2 Replacement of special rules relating to domicile
The Committee consisted of the following Members:
Chairs: † Mr Clive Betts, Sir Christopher Chope, Sir Edward Leigh, Graham Stringer
† Atkinson, Catherine (Derby North) (Lab)
† Baines, David (St Helens North) (Lab)
† Bishop, Matt (Forest of Dean) (Lab)
Chowns, Ellie (North Herefordshire) (Green)
† Collinge, Lizzi (Morecambe and Lunesdale) (Lab)
† Foody, Emma (Cramlington and Killingworth) (Lab/Co op)
† Foxcroft, Vicky (Lord Commissioner of His Majesty's Treasury)
† Hayes, Tom (Bournemouth East) (Lab)
† Hinds, Damian (East Hampshire) (Con)
† McKinnell, Catherine (Minister for School Standards)
† Martin, Amanda (Portsmouth North) (Lab)
† Morgan, Stephen (Parliamentary Under Secretary of State for Education)
† O'Brien, Neil (Harborough, Oadby and Wigston) (Con)
† Paffey, Darren (Southampton Itchen) (Lab)
† Sollom, Ian (St Neots and Mid Cambridgeshire) (LD)
† Spencer, Patrick (Central Suffolk and North Ipswich) (Con)
† Wilson, Munira (Twickenham) (LD)
Simon Armitage, Rob Cope, Aaron Kulakiewicz, Committee Clerks
† attended the Committee
Public Bill Committee
Tuesday 28 January 2025
(Afternoon)
[Mr Clive Betts in the Chair]
Children’s Wellbeing and Schools Bill
Clause 11
Powers of CIECSS in relation to parent undertakings
Question (this day) again proposed, That the clause stand part of the Bill.
With this, it will be convenient to consider clause 12 stand part.
As I said in the last sitting, I am grateful to the Opposition spokesperson, the hon. Member for Harborough, Oadby and Wigston, for his thoughtful contributions and specific questions. I will take those points away and I will try to address as many of them as I can in this debate.
As required, we have produced impact assessments for all measures in the Bill, and have followed the better regulation framework for measures that are in its scope. As outlined on gov.uk, the Regulatory Policy Committee, or RPC, is currently reviewing the Bill’s impact assessments and will produce an opinion when its scrutiny has been completed. We will publish those impact assessments shortly. We have also conducted child’s rights impact assessments, where children are directly impacted by the policies and/or there are particular groups of children and young people who are more likely to be affected than others, as I mentioned this morning. There is no requirement to publish these documents in relation to England, but the documents are currently under review, and we will also publish those shortly.
The shadow Minister made a number of points about the shortage of foster carers. Local authorities have a duty to place looked after children in their care in registered children’s homes. We understand that sometimes authorities need to place a child quickly, including when there are no suitable registered places immediately available, but the Government are clear that all providers of accommodation for children should register with Ofsted. We are also helping local authorities to meet their sufficiency duty by investing more than £130 million in fostering hubs and kinship care and providing additional funding for children’s homes, including more than £36 million specifically on foster carer recruitment and retention.
In the light of the questions that the shadow Minister raised, I also wanted to respond on how we are working with Ofsted to embed the reforms in the Bill. As Sir Martyn set out in his evidence, Ofsted is a key partner in delivering reform of children’s social care, and we are working closely with Ofsted to ensure that each of the measures presented to the House can be implemented carefully, alongside the non legislative asks that Ofsted also needs to respond to in parallel. The Department has provided funding for a children’s social care transformation team in previous years, which has built the capacity for Ofsted to respond effectively to all the changes we have asked of it to date and ensure that it can meet the demands placed on it by the Bill.
The shadow Minister asked about the term “reasonably suspects”. Ofsted will have the grounds to suspend registration, which could be based on minor or major non compliance, and may consider that that is a problem in other settings owned by the same provider group. That would be a reasonable suspicion, and it will be a matter for Ofsted to apply those judgments.
On the question of whether the bar is too high for provider group level intervention, Ofsted’s power to cancel registrations is broad and allows it to intervene when the regulatory requirements are not being met. If Ofsted reasonably suspects that two or more settings owned by a provider group are not meeting those requirements, it has the power to ensure that the provider group acts to make improvements in the settings. If an issue arises in a single setting, it is unlikely to be indicative of wider issues in the provider group, and Ofsted would use its existing powers in relation to registered providers at the individual setting level. It is right that the bar at which Ofsted should be able to require actions of a provider group is the same bar that would enable Ofsted to take action against individual settings, where that is already set out in legislation and guidance. That ensures that this further power is proportionate and that it can only be used where there are real issues of concern arising in settings.
These powers supplement the existing inspection regime. If Ofsted has serious safeguarding concerns, it has the power to close individual settings.
The shadow Minister also spoke of the need to speed up action by Ofsted. The Hesley Group case showed what can happen when a culture and environment in a provider group allows a culture of silence and allows abhorrent abuse to take place. These new powers will allow Ofsted to act quickly and go directly to the provider group to seek improvement if it reasonably suspects that requirements are not being met, which it could not do with any legal backing in the Hesley case. If the provider group does not improve its settings, Ofsted can take action. Where there are serious safeguarding risks, ultimately Ofsted has existing robust powers to cancel a registration and close the setting.
On why we are not introducing inspection of provider groups, Ofsted inspects settings at a minimum of once per year, using the social care common inspection framework. Inspection is not warranted at provider group level—the organisation that owns the providers who run the settings—given the existing robust regime for inspection of individual settings. Provider oversight will supplement inspections to ensure that Ofsted can take the quickest and most effective action for the benefit of children. In many situations, the provider oversight measures will not be necessary, as most provision is rated good or outstanding. Inspection of provider groups would, in many cases, simply duplicate what Ofsted is already doing. Ofsted is already able to cancel registrations in respect of settings if necessary. Provider oversight ensures that multiple cancellations of registrations are not necessary.
On the point about compliance with action and plans relating to litigation, it will be a straightforward question of whether a provider has implemented the improvement plan, which will have been agreed between the provider group and Ofsted. We do not foresee that it will lead to any lengthy litigation.
The shadow Minister spoke about local authorities who place in unregistered settings. Local authorities have a duty, of course, to place looked after children in their care in registered children’s homes. We understand that sometimes authorities need to place a child quickly, including when there are no suitable registered places immediately available, but Government are really clear that all providers of accommodation for children should register with Ofsted. We are helping local authorities to meet their sufficiency duty by investing more than £130 million in fostering hubs and kinship care, and providing additional funding for children’s homes.
Finally, Ofsted will ask local authorities for information on their use of unregistered provision ahead of any inspections. If there are any concerns, Ofsted may focus on unregistered provision in the local authority’s next inspection. That could include the decision making processes leading to use of this provision and the statutory duties to plan for sufficient places to meet the area’s needs.
I simply want to lodge a very specific question about proposed new section 30ZC(3)(a) of the Care Standards Act 2000 and the category of people who may not be given a regulatory fine but instead must be prosecuted. I raised the issue in this morning’s session about whether those people would not be able to get a regulatory fine because of the individual case being dealt with, or whether it was the case that anybody who had a previous history of being found guilty of any of these things could not have a regulatory fine applied to them. I would be grateful if the Minister can clear that up now, or if he will undertake to write to me about it. It is just to understand what the law is proposing in that respect.
I thank the shadow Minister for those comments. We will certainly take that away and get him a response.
Question put and agreed to. Clause 11 accordingly ordered to stand part of the Bill. Clause 12 ordered to stand part of the Bill. Clause 13 Financial oversight Question proposed, That the clause stand part of the Bill.
It is actually quite difficult to talk to clause 13, as it looks as though pretty much all the important detail here is to be worked out in regulations. Of course, the Government should support local authorities to minimise the risk of disruption to children in homes or independent fostering placements from providers getting into financial difficulty, and financial oversight should indeed be part of their registration conditions. So far, so good.
However, proposed new section 30ZE(2) of the Care Standards Act 2000 states that a financial oversight condition “is a condition specified in regulations made by the Secretary of State for the purposes of this section.”
Subsection (4) lists examples such as size, the number of children looked after, geographical concentration and so on. Though this area is being left to regulations, could the Minister say more about the sort of thresholds the Government are considering for these metrics—particularly as the Secretary of State will have so much power, including to alter all the criteria in regulations? Although this is broadly a sensible measure, it is quite an open ended and new power.
The clause is already quite long, but the Opposition wondered about an improvement, perhaps as it goes through the other place, to fundamentally change the registration approach for any new market entrants, so that it is a condition of delivery that they provide financial transparency up to the parent company level, give a quarterly going concern update to the regulator and provide financial information as reasonably requested by the regulator. Has the Department considered similar requirements, so that all providers would have to give full financial transparency as a matter of course and further investigation would follow if concerns were raised?
We are completely sympathetic to proportionality in regulation, but in this case we could reasonably put the onus on providers to share the information systematically, rather than having to wait for a tip off from a whistleblower or for a concern to become apparent. Sometimes it is the analysis of consistently reported data that provides the tip off that there is a problem.
To use an example from a slightly different field, in my constituency I have been involved in cases where the integrated care board is regulating GP practices, and I have always thought there is a strong case for ICBs to get more data up front. Twice, when there has been a problem in my constituency and I have talked to the ICB afterwards, it seemed to me that if it had been getting financial data, the issue would have been obvious and there would have been signs long before whistleblowers ever went to the Care Quality Commission. I wonder whether consistent reporting analysis of data would allow us to see problems coming before we get to whistleblowers and other problems down the line. One issue is therefore whether we should have reporting on a more regular basis.
The Opposition have worries of the same kind about this clause as we did about clause 11, though in this case, instead of an improvement plan, it is called a recovery and resolution plan. Again, thinking about independent schools, there is a risk that time and resource get spent preparing the request for the plan, writing the plan, challenging the plan as needed, writing a better plan and going through iterations. In the case of these providers, do we have the financial expertise, either in Ofsted or the Department, to assess the plans? It looks as though there is a recognition that we do not, because proposed new section 30ZI includes the power to arrange for an independent business review. That makes sense, but for reasons best known to the Bill drafters that does not appear to include scrutinising the recovery and resolution plan. I am not sure why not. I do not know whether that is a slip of the draftsman’s pen, as they say, or whether it is deliberate.
My understanding is that Ofsted already has the power to inspect the financial position of schools, but there is a limit on what it does because of the need for a high level of expertise to pick through these cases. Looking at the accounts of a school or group of schools is simpler than analysing the complex debt and ownership structures that we see in some of the private equity owned children’s homes.
In practice we know that the market is so tight for placements that the loss of even a smaller provider would be disruptive, and the timing of the issuing of the advanced warning notices set out in proposed new section 30ZJ will be terminal for the affected businesses. Page 47 of the policy summary states that the regulations may be extended in scope, “so that they may provide that a person is not fit to carry on an establishment or agency if a parent undertaking has failed to comply with the financial oversight scheme.”
I am unclear where that provision is in the Bill. Perhaps the Minister could clarify that, because it is quite a complicated clause. Are there any other potential extensions of the Secretary of State’s power by regulations here? Could the Minister clarify the thinking behind allowing Ofsted to determine that someone applying for registration is not a fit and proper person to manage an organisation in this area?
I have some specific questions for the Minister. Can he clarify whether the clause only applies to for profit businesses, or whether charitable providers in the sector will also be included, and how that would work for them as non profits? What will the threshold be for children’s social care providers to be considered “difficult to replace” enough not to have to provide the information listed to the DFE? What proportion of providers are we talking about? Does the Minister have a sense of what the threshold will be and what proportion of the market will be outside it?
How often has there been a
“sudden or disorderly market exit”,
as the policy summary says,
of “‘difficult to replace’ providers” in the past? It would be good to have a sense of how often these considerations would have applied in the past. Can the Minister give any examples of how the powers in this clause would prevent that from happening? The maximum monetary penalty for non compliance will be set out in regulations; does the Minister have any sense of what that might be, or why?
There are issues about pace that we have raised in relation to other clauses. Although I am sympathetic to what Ministers are trying to do, there is a nervousness that digging into the finances of these things will not necessarily be straightforward, and I would like reassurance that there is a plan to be able to do that. I also wonder whether there is scope to make this a prospective rather than a reactive process, so that we have the opportunity to mine that data and analyse it, to see whether it is telling us anything about problems that are coming down the line before they happen.
We heard from the right hon. Member for East Hampshire about the involvement of larger and smaller scale providers in children’s social care, and the Bill covers the other places that children and young people can make their home in. I think we all agree that there is a need for a wide range of options, so that we can determine what is best for individual children and young people when they are finding their home.
Clause 13, however, is particularly relevant to larger scale providers because of the sheer number of children who would be affected should one of those providers experience unexpected or unreported financial difficulties. No young person should be faced with losing their house overnight, and this measure would help to secure provision for those children in a planned way, as opposed to a reactive situation where a number of places have to be found overnight.
The clause also follows the Competition and Markets Authority’s recommendation to emulate the equivalent schemes we find in adult social care. That is long overdue in child social care. It adds safeguards that allow for transparency and security, which we welcome when we are dealing with children’s social care and the homes that they will hopefully have for a long time.
We are aware that a provider of children’s social care places suddenly closing their provision as a result of financial failure could have a significant detrimental impact on the care and stability of children and young people where they live. Currently, local authorities have no way of knowing whether a private provider or its corporate owners are at risk of failing financially. If a large provider were to fail and suddenly exit the market without warning, it could be difficult for local authorities to find alternative placements for those children or places that appropriately meet their needs. That is why we are developing a new financial oversight scheme in children’s social care, as recommended by the Competition and Markets Authority, which will for the first time increase the financial and corporate transparency of difficult to replace children’s social care providers and allow accurate real time assessment of financial risk.
The scheme will give local authorities advance warning of failure, so that they can take swift action and minimise disruption to the most vulnerable children. Those in the scheme will be required to submit a recovery and resolution plan containing information on risks to providers’ financial sustainability and plans to reduce those risks. The Secretary of State may also require providers or a corporate group member in the scheme of heightened financial risk to undergo an independent business review. We will provide details of the RRP and the IBR through guidance.
I thank the shadow Minister for his comments and questions and my good and hon. Friend the Member for Portsmouth North for her insightful contribution. The shadow Minister asked a number of questions about how the scheme will work in practice ahead of the regulations, and made a number of points about which providers will be in scope of the financial oversight scheme.
It is worth saying that the scheme will be proportionate and target only difficult to replace providers and their owners according to their size, market share and geographical concentration. The scheme will apply to private, voluntary and charity providers of children’s homes, including dual registered special schools and independent fostering agencies operating in England. We will also extend the measure to supported accommodation, and we in the future may look to extend it by regulation to residential family centres. Local authorities routinely manage placements of individual children in the event of closures of smaller services, so we do not think those need to be covered by the scheme.
To answer other questions raised by the shadow Minister, the Bill sets out the foundations of the financial oversight scheme, exercisable through the Secretary of State’s powers. We know that the children’s social care placement market is dynamic and we will use these measures and powers to set out the detail in regulations, which will enable my Department to review and update the details in line with future changes to the market. We will publish guidance alongside the regulations, setting out how the scheme will operate in practice and enabling providers to understand what the scheme requires of them.
The shadow Minister asked why Ofsted is not leading the financial oversight scheme. The forensic financial analysis required to fulfil the scheme’s aims extends beyond Ofsted’s remit as a largely quality focused regulator. Given that Ofsted is not a financial regulator, we will build on my Department’s existing capabilities and market oversight functions to undertake the specialist work required to develop the scheme. A Department led scheme means that we can play a stronger co ordination role should a difficult to replace provider exit the market, enabling a quick multi agency response.
Finally, how many providers will be covered and how many placements they represent, we want the financial oversight scheme to deliver an effective oversight function that is proportionate and not overly burdensome. We therefore want to introduce a scheme that covers difficult to replace providers only, as recommended by the Competition and Markets Authority. We will determine how many providers will be subject to the scheme as we develop the regulations. Providers who meet the conditions will include private, voluntary and charity providers; we may look to scale the number of providers in the scheme up or down in future ,according to market developments, to ensure that we continue to meet the aims of the scheme.
Question put and agreed to. Clause 13 accordingly ordered to stand part of the Bill. Clause 14 Power to limit profits of relevant providers
I beg to move amendment 42, in clause 14, page 28, line 37, at end insert— “(c) independent schools with caring responsibilities and offering SEND provision.”
This amendment would include independent special schools within the profit cap provision.
With this it will be convenient to discuss the following: Amendment 25, in clause 14, page 29, line 25, at end insert— “(10) Before making regulations under this section the Secretary of State must lay before Parliament a report containing — (a) details of the number of available placements in relevant establishments or agencies; (b) an analysis of the expected impact of this section on the number of available placements in relevant establishments or agencies.”
Clause stand part.
It is a pleasure to serve under your chairmanship, Mr Betts. Clause 14 grants the Secretary of State the power to limit the profits of certain social care providers, so I will say at the outset that I, as a Liberal, support a mixed economy in the provision of public services, but I believe that there must be limits to that. It is clear that we have a market that is not functioning, and there are providers who are shamelessly profiteering. I spoke to my director of children’s services about this last week, and he told me at the moment the average price of a placement in a children’s care home per week is £5,500. That is very much the average price; a number charge multiple times that amount per week. That local authority finances are being utterly crippled by some providers, which are clearly behaving inappropriately in the market because of the lack of supply, leaves me incredulous.
A number of hon. Members have made reference to the Competition and Markets Authority’s 2022 report. It said that the UK had sleepwalked into a dysfunctional market, and that “the largest private providers…are…charging materially higher prices, than we would expect if this market were functioning effectively”.
The power in clause 14 is an important backstop if other measures are not successful, but the devil will be in the detail of how the power is implemented if it is triggered. We all know that many of those big companies have deep pockets from which to pay the best accountants and lawyers, and comprise multiple companies in complex structures all over the world; they can put money into all sorts of different places to avoid the intended scrutiny.
Amendment 41 would include independent special schools in the provision. I will say at the outset that there are many independent special schools run by private providers and voluntary sector providers that do an excellent job and are certainly not profiteering; none the less, some do not fall into that category. We are all acutely aware of the crisis in state special educational needs and disabilities provision and the lack of specialist places, which has led to a growth in private provision that is crippling local authority finances. In 2021-22, councils spent £1.3 billion on independent and non maintained special schools—twice what they spent just six years previously. The average cost of one of those places was £56,710—twice the average cost of a state run special school place.
It is clear from analysis done by the House of Commons Library for the Liberal Democrats that some of the companies running those schools are the same private equity companies that are running the children’s homes and fostering agencies that the power in clause 14 is designed to address, so I am at a loss as to why the Government have not included independent special schools in the provision. LaingBuisson, which undertakes reports on children’s services, looked at those providers on the profitability measure of earnings before interest, tax, depreciation and amortisation. It says that the profitability of 23 of the major providers, using the EBITDA measure, varied from 27.9%, in the case of the Witherslack Group, down to 4.7%, which is a much more acceptable level; over a third of the 23 major providers had a greater than 20% profitability margin. Typically, it was the private equity owned providers that had that high level of profitability, not the other private sector providers. I urge the Government to look very seriously at amendment 42, which seeks to ensure that we also crack down on profiteering in special schools.
On amendment 25, tabled by the Conservatives, I actually think the first part of it, about detailing the number of placements available in relevant establishments or agencies, is a good idea. That information should not be published only when the power is triggered; frankly, we should have an annual assessment of the availability of care placements and details of what the Government are doing to boost their availability. It is clear that the lack of provision is what is driving the profiteering. A later clause allows local authorities and others to open new special schools where there is demand. We need a provision that gives local authorities the power and funding to fill a need for social care placements as well, so that we are not filling the coffers of private equity funds and sovereign wealth funds in the middle east, which pay their directors massive bonuses, huge amounts of money, drawn from the public purse, when many of our local authorities are on the brink of bankruptcy.
I rise to speak to amendment 25 and clause 14. I thank the hon. Member for Twickenham for what she said about our amendment. I completely agree that, ideally, we would have what we are asking for on a regular basis, but just to be clear, the requirement on the Secretary of State to report to Parliament details and analysis of available placements is in amendment 25 because we want to keep the focus firmly on supply and capacity, which I think we agree are the ultimate drivers of the problem we are addressing.
As we said in response to the oral statement to the House by the Secretary of State, we welcome the continuing focus on issues that we identified, and we set up the market intervention advisory group to look at that when we were in government. The heart of the problem, however, as I think we all recognise, is the lack of supply of high quality places in residential, kinship and foster care for looked after children. Demand for such places outstrips supply, and that is what is causing the high cost of placements.
It is striking that in its 2022 report, the Competition and Markets Authority did not recommend a profit cap because, in its words, “The central problem facing the market…is the lack of sufficient capacity.”
The CMA concluded that taking measures to limit the profitability of providers would “risk increasing the capacity shortfall.”
So if we do not take action to increase capacity first, ironically, we risk simply driving up prices and exacerbating the shortage of places.
Likewise, the review commissioned by the last Government and carried out by the hon. Member for Whitehaven and Workington (Josh MacAlister) found that profit caps would not work as it would be, “relatively easy for providers to reallocate income and expenditure to maintain profit levels”, a point already alluded to by the hon. Member for Twickenham. The capacity problem rests on the availability of places and the demand for those places. We spoke previously about the need to do much more to grow fostering to reduce demand. Our amendment is designed to ensure that that capacity issue remains at the front of everybody’s mind at both the national and the local levels, so that at neither level do we fall into thinking that we can fix this without primarily fixing supply.
I understand the argument that it cannot hurt to have the power in the clause, which is the reason why we will not vote against it, but it is unlikely to change things very much compared with increasing supply. In fairness, the Bill’s policy notes state that the profit cap power “is intended only to be used as a last resort should other measures not have the expected impact”.
The hon. Member for Twickenham talked about it being a backstop. My only worry is we should not even rely on it as a backstop. As the previous independent review and the CMA highlight, it would not be easy to use. One reason is that it would inevitably have to be backward looking. The Government’s policy notes state: “We are aware that the administration of the profit cap will be a retrospective look back at whether or not the profit cap has been breached in a past period. It will therefore not necessarily prevent breaches in itself, but it will allow action to be taken retrospectively if such breaches have occurred and act as a disincentive for further breaches.”
We will be looking backwards at a sector where there are a lot of complicated financial arrangements, and because we are looking backwards, people will have time to do all kinds of things to make sure that they look like they are complying, for the reasons I have mentioned.
As Ministers take this measure through the other place and consider implementation, I strongly recommend that, if they regulate for fines, they set up an absolutely iron clad mechanism to ensure that those fines are paid. I was very disturbed to learn from an answer to a parliamentary question the other day that the Home Office has no idea what proportion of the fines imposed for illegal working are actually paid. In that sector, people just move on—they set up a new company, or get their brother to start a new thing. They just move on, and they do not pay the fine. It is widely known that we do not even know how many people are paying those fines. Obviously, we need to prevent that from happening in this sector, where there is equal scope to move on, to set up new things and collapse the old, and so escape fines. I am sure Ministers are seized of that risk; I just wanted to emphasise what they need to do when regulations are made.
Another way out that Ministers might want to try to close off is that some in the sector adopt offshore models of provision. Might the Government want to use this rare legislative moment to discourage, either in primary legislation or by giving themselves the power to regulate, the commissioning of places with providers that are domiciled offshore? They might want to take that power now, but even if they fix it, there will continue to be so many opportunities to fudge and to manage profits with interest and debt.
I do not mean to labour this because, as I listen to some people in the debate, including Ministers, I hear that they understand the difficulties, but then I hear from some other people, and they think, “Oh, we can just control prices to get out of this, without addressing the underlying real problem about supply.” When I was at the Treasury, one reason we were really keen on the work we were leading on through the OECD on base erosion and profit shifting was that we were faced with the endless generation of new tax wheezes and profit shifting arrangements. They all had these exotic names—the Dutch sandwich, the green jersey and the double Irish; people were constantly generating new ways of moving profits around.
I want to bring that to life a bit by asking some questions. How would profit be defined for the purposes of the cap? The policy summary talks about “(on average) profits of 19.4% on fostering, 22.6% on children’s homes and 35.5% on supported accommodation.”
I went back to look at the 2022 CMA report from which those numbers are drawn, but it just talks about margins, so I was not clear on whether we were talking about pre tax, post tax, or earnings before interest, tax, depreciation and amortisation. I am keen to understand what measure of profit we are using.
What analysis have the Department done to think about the capital needs of the sector over the next five years? It will need large sums, which may make profit capping harder. Fundamentally, there is a big question about what level of profit the Department for Education deems to be acceptable. In in her articulate and thoughtful remarks, the hon. Member for Twickenham mentioned one provider that had a very high rate and another that she said was more acceptable. That is the heart of the issue: given the powers that are being taken, do Ministers at this stage have some rough barometer of what they would regard as unacceptable profits?
Alongside this debate, even as we as we speak, the consultation is running. Obviously, in an ideal world it would have been much better to have had the results of that consultation before the debate and before we moved to legislate. To say we are being asked to sign a blank cheque is an overstatement; I am less worried about it than that. Obviously, though, it would have been much better to have the results of the consultation. What is the timescale of the consultation and when will we have some results from it? Is the Minister already able to share any findings?
I am labouring the point slightly, but I want the Minister’s reaction to the issue, which I am trying to raise in different ways, of the difficulty of capping profits in this kind of industry with these kinds of players so that the concerns that caused the CMA and the hon. Member for Whitehaven and Workington not to recommend profit caps do not come to bear in practice.
A fundamental question is what the evidence is that, on a like for like basis, private sector providers are more expensive than either charities or local authority provision in this area. The numbers may exist, but I have not seen them. If the margins are so high, why are more providers not entering the market? It is a strange thing: there is not enough supply, but we think profits are too high. What is the barrier to entry? It may be that all those questions are addressed in the impact assessment, which is one reason that it is frustrating that we still do not have it.
The DFE says that it is trying to do other things to tackle excess profits. In its policy summary notes to the Bill, it said: “Until these other measures have had time to be implemented and have effect, we will not know whether regulatory action in the form of a profit cap is necessary.”
That is totally sensible; I completely agree. What are the Minister’s thoughts on timing for making a decision on that? We have a consultation now. The Ministers are trying to do other things to tackle excess profits now; once implemented, they will take time to have an effect, if they are going to have an effect. In what year will we potentially make a decision on the profit cap? As I started to make the mental Gantt chart, I wondered whether this was a decision for the end of this Parliament or the next. I just want a sense of what Ministers think about the timing for making that decision.
Page 53 of the policy summary notes says: “The level of any future profit cap would depend on a number of factors, including market conditions at the point that we make a decision that a cap is needed.”
That line is a bit mysterious. This may be obvious, but it is not obvious to me—what does that mean in practice? I could not work out which way round it was: would there be no profit capping if supply was too limited, as there would be no scope to do it, or would profit capping come in if supply was limited and prices higher than Ministers wanted? I was not sure in which direction the arrows ran between market conditions and the decision on having a profit cap.
We are not against the clause standing part of the Bill. We are obviously keen on our amendment, and indeed the improvement to it suggested by the hon. Member for Twickenham, but, as an amendment, it is what it is. But all of this is just an aim. We think there are massive limits to how usable this power will be in practice and we do not want it to become a distraction from fixing the main issue, which is supply. To use an example from housing policy, which is apt, given the Chair’s former Select Committee role, the places around the world that have tried to rely on rent controls to fix housing problems generally fail. The people who focus on supply generally do much better. That is the spirit behind our amendment and our questions to the Minister.
It is good to see you in the Chair, Mr Betts. I rise briefly to echo some of the points made by my hon. Friend the Member for Harborough, Oadby and Wigston and to ask a couple of questions. I have total sympathy with what Ministers are trying to do here. Having spent a bit of time at the DFE, I know the pain of seeing the amounts of money going out from local authorities for some very expensive placements.
The thing I always found vexing, and still do to this day, is exactly the thing the shadow Minister mentioned. If there are fat margins to be had, ordinarily, in a Schumpeterian world, people come into that—again, I hesitate to use the word—market. The insurmountable barriers stopping that from happening were never clear to me. It was not just that additional supply was not coming in to bring down unit costs, but that, on occasion, there was no place to be found. It is very important that we understand the underlying economics of this, bearing in mind, as ever, that we are talking primarily about the care of children.
The profit made by an entity cannot be limited, ultimately, because that is the residual left at the end of the year between revenue and cost. All one can do is either to choose not to use an entity that makes a profit of more than a certain amount, or seek some form of clawback. I note from the Bill that it is the latter approach that Ministers wish to take, as in proposed new section 30ZM. Do they seek to use this power as a fine—a penalty—for having a profit above whatever is deemed the appropriate level, or in proportion to it? In other words, do they seek to claw back the entirety of the surplus—the profit made—in excess of what is deemed a fair return?
This will come up in the secondary legislation, but I hope the Minister does not mind my asking about it now, because it is pretty fundamental. Defining profit is an extraordinarily difficult thing to do. To the person in the street, it is obvious, but any financial analyst would say that they can make the profit more or less whatever they would like it to be, depending on how they treat direct cost, how they absorb the fixed cost, how, in the case of a relatively small business, they treat the balance between remuneration of employees and reward to shareholders, and many other factors.
Even if we talk about gross profit or gross margin, that could be defined in different ways at different levels. The hon. Member for Twickenham suggested that perhaps EBITDA—earnings before interest, taxes, depreciation, and amortisation—would be the correct definition to use. It might be, but another argument says that taking the line above depreciation is not appropriate if a capital investment is involved. In any event, the overarching point is that it is a very complex issue. Private sector companies can be rather good at knowing how to best present their finances. Of course, that can be entirely legitimate. My question is, what monitoring does the Department for Education believe will be necessary, how much it will cost to put in place, and how effective does it think it will be?
My final question is: does this also apply to the voluntary sector? We are talking about profit, but a charity or voluntary organisation does not have distributed profit. They may, however, have a surplus, so does this also apply to surpluses made by entities in that sector?
Amendment 42, in the name of the hon. Member for Twickenham, seeks to extend the powers to cap profits of Ofsted registered non local authority providers of children’s homes and independent fostering services to also cover private schools with caring responsibilities and offering SEND provision.
As hon. Members will be aware, the Competition and Markets Authority found the children’s social care placements market to be dysfunctional, estimating that the largest private providers were making profit margins well above what would be expected in a well functioning market. It is important to be clear that the study was restricted to looking at the state of the market for specific types of placements. It provides clear evidence of excess profit making by some providers of these placements, but its scope did not extend to looking at private schools.
We set out a wider package of measures in “Keeping children safe, helping families thrive”, which we expect will rein in profiteering among children’s social care providers, and the profit cap is intended as a last resort if they fail to do so. Children and young people with special educational needs are found throughout the private school sector, and it is not our intention to introduce a blanket cap on profits in private schools that offer special educational provision.
With regards to private special schools, they can play an important role in the special educational needs and disability system, particularly in meeting low incidence needs. Many have important expertise, but we recognise that independent special schools have higher costs than maintained special schools and academies. The Government are very aware of the challenges in the SEND system, and we understand how urgently we need to address them. But these complex issues need a considered approach to deliver sustainable change. As part of that work, we are considering the role and place of independent special schools. It would not be appropriate to introduce a profit cap on a completely different sector without proper engagement with stakeholders and an assessment of its impact.
The hon. Member for Twickenham made a number of insightful and helpful comments when moving her amendment, and I hope that I addressed earlier her remarks about private special schools. As I mentioned, private special schools often have higher costs compared with their maintained equivalents. In some cases, that will be particularly because of higher specialist provision to support children and young people, particularly those with complex needs.
Some private schools, of course, operate for profit. We need to ensure that placements in private special schools are used appropriately. It is the Government’s intention that special schools should be reserved for those with the most complex needs. As I have mentioned, we will consider the role and place of private special schools and the potential for a cap on profits as part of our wider reforms to special educational needs.
Amendment 25, in the name of the hon. Member for Harborough, Oadby and Wigston, the shadow Minister, seeks to require the Secretary of State, before making regulations to implement a profit cap, to lay a report on the number of placements for looked after children in relevant establishments or agencies and the expected impact of a profit cap on the number of places available. As I outlined earlier, we intend to use the powers in clause 14 only if profiteering is not brought under control through the wider package of measures set out in “Keeping children safe, helping families thrive”. Those measures include improving data transparency and boosting the supply and diversity of provision, helping to foster greater competition and to drive down prices and profits to more sustainable levels.
It is crucial that we allow time for those other measures to work before considering regulatory action. If it becomes necessary to use the powers—I hope that it does not—the clause already includes important safeguards through restrictions that ensure that the powers are used appropriately. Regulations may be made only if the Secretary of State is satisfied that that is necessary on value for money grounds. The Secretary of State must also have regard to the welfare of looked after children and the interests of local authorities and providers, including the opportunity to make a profit.
Crucially, the clause also requires the Secretary of State to consult before making regulations. That will be particularly important to ensure that all interests are considered in determining issues such as how the cap will be calculated and the level at which it will be set. The consultation is particularly important: not only would it inform the details of the proposed cap itself, but it would require the Government to respond and publish that response. That would set out our rationale if a cap were introduced, including the matters in the amendment tabled by the hon. Member for Harborough, Oadby and Wigston.
In addition, the explanatory memorandum to the regulations would set out the policy rationale; in effect, that would already fulfil the amendment’s aim of having a report laid before Parliament. Of course, the regulations would be subject to affirmative resolution, so these matters would no doubt be covered in debate. I hope that the hon. Member is reassured that important safeguards are already in place to ensure that the power to cap profits is appropriately restricted. Existing mechanisms also ensure that Parliament has sight of the information that the amendment covers. For those reasons, I ask hon. Members not to press their amendments.
I turn to clause 14, which inserts new sections into the Care Standards Act 2000. It is a crucial element of our strategy to drive down profiteering in the children’s social care placements market. It will provide new powers for Government to take regulatory action to restrict provider profits if they are not brought under control through our wider package of measures set out in “Keeping children safe, helping families thrive”. While some private providers are doing brilliant work, we want to ensure that all providers are delivering high quality placements at a sustainable cost. We know that that is not always happening. The Competition and Markets Authority found the placements market to be dysfunctional, establishing that the largest private children’s social care placement providers were making profit margins of 19% to 36%—well above what would be expected in a well functioning market.
Let me be clear: making this level of profit from providing placements for some of our most vulnerable children is unacceptable and must end. The clause provides important backstop powers to ensure that the Government can take action if needed to end profiteering. The clause also sends a clear signal to providers that Government will not hesitate to take regulatory action to restrict this unacceptable behaviour if profit making is not reined in. If it becomes necessary to use these powers—I hope it does not—then the clause includes important safeguards and restrictions on the powers to ensure that they may only be exercised proportionately.
Regulations may be made only if a Secretary of State is satisfied that it is necessary on value for money grounds. The Secretary of State must also have regard to the welfare of looked after children and the interests of local authorities and providers, including the opportunity to make a profit. Crucially, the clause also requires the Secretary of State to consult before regulations are made. That will be particularly important to ensure that all interests are considered in determining issues such as how the cap would be calculated and the level at which it would be set.
In addition, clause 14 provides for regulations to be made that set out important detail about the administration of any future cap by providing for annual returns from registered providers and the ability to request supplementary information. The detail of these returns, including their contents and format, will be determined after full consultation. We will want to ensure that we do what is possible to prevent profits from being disguised while ensuring that returns are not overtly onerous and burdensome.
I thank the shadow Minister, the hon. Member for Harborough, Oadby and Wigston, for his specific points. I also thank the right hon. Member for East Hampshire for his points on the importance of places and on the profit cap. On the question of why we cannot do an annual report on placement sufficiency, local authorities already have a duty to undertake an assessment of the availability of placements and sufficiency. As discussed earlier, the regional care co operative will be able to take this forward at a regional level.
The shadow Minister also asked about the annual report on places. We are improving data transparency and boosting the supply and diversity of provision among other interventions, which will have swift, positive impacts. They will help to foster greater competition, which will naturally help to drive down prices and profits to more sustainable levels. The shadow Minister is right to raise the hiding of profits. We are aware that there are numerous ways in which registered providers may seek to avoid the cap or artificially reduce their profits for the purpose of the profit cap return, and legislation will seek to limit that. Should our analysis indicate that providers have attempted to hide profits, we will take that into our account in our determination as to whether the cap has been breached. That can also be considered to be an aggravating factor that could lead to more a severe monetary penalty for breach of the cap.
We are not introducing a profit cap immediately and we are not setting out the level of cap at this stage. The level of the profit cap will depend on a number of factors, including market conditions at the point it was introduced. Full consultation with local authorities and provider representatives, including on the appropriateness of the level of the cap, would need to take place before this power is used. We are clear that we are not seeking to eliminate profit making entirely; it will continue to play a role in the market.
The right hon. Member for East Hampshire asked a range of questions about how this will work in practice. I hope I have covered a number of them already, but the Secretary of State will assess returns, including ascertaining whether revenue not recorded as profit should have been. The process will look retrospectively at profits made in previous periods. Any breaches of the cap will be punishable by fine. The former Education Secretary also asked about how we will enforce the cap. Yes, the Secretary of State will be able to issue a civil monetary penalty if the cap has been breached, and the maximum level of the penalty for a breach may be prescribed in affirmative regulations and changed as needed in future with the approval of Parliament.
Finally, and more broadly, we are committed to taking a measured approach to implementing our reforms and are acutely aware of the importance of not destabilising the market and risking significant disruption to the care of our most vulnerable children and young people. We are confident that the package of reforms set out in the paper published on 18 November last year will address profiteering and ensure that the supportive and caring placements that children need are delivered at a sustainable cost to the taxpayer. However, we will keep the market under close review, and we will not hesitate to take action to cap providers’ profits if needed.
I thank the Minister for his kind remarks about my comments, but he is aware that the SEND system is in crisis—he and his fellow Ministers hear that every other week in the Chamber. He knows that local authority finances are on the brink because of SEND costs, and that those deficits are driven to a certain extent by the spending on private provision. I am curious as to why the Government are so hesitant to take action in this space, yet they are happy to slap VAT on parents wishing to send their children to independent schools. This amendment is about tackling specific providers that are clear outliers in the fees they are charging. It is a targeted intervention that could really help local authorities and, in turn, children who are desperate for more support that local authorities cannot provide.
The right hon. Member for East Hampshire talked about whether we can control profitability. I used to work in the pharmaceutical industry, in which the Government have for many years had a control on not only prices but profits and have clawed back profits. As a monopoly purchaser of services, the Government can act on behalf of NHS trusts around the country, and they could do something similar for local authorities where needed, whether it is with special schools or private social care providers. I would like to press amendment 42 to a vote.
I was quite reassured by the Minister’s thoughtful comments and his clear appreciation of the difficulty and extreme number of obstacles to making this power practicably usable. Kenneth Clark said that he did not know what civilisation was, but he knew it when he saw it, and I think quite a few Members of this House, including those on the Government Benches, have the same feeling about excess profits—we feel that they are too high, but we struggle to say what we think an acceptable level would be. That challenge will not get any easier over time.
As ever, my right hon. Friend the Member for East Hampshire is more articulate than I am, and he made the point well that this is not a profit cap but a retrospective clawback mechanism, which is another reason why it will be so hard to use in practice. Unless we are going to get into problems of retrospection and loads of legal action, we will be giving people advance warning, which will give them time to move money around and ensure that things look compliant.
I am keen to move amendment 25 to a vote. I promise that we will make great progress on subsequent clauses; I am not trying to be a dog in the manger. I understand and accept the Minister’s arguments about the things that the Secretary of State would do before commencing such a power—that was reassuring—but there should be a national assessment of the number of available placements. The Minister said that such things happen locally, and that someone could tot them up; I hope the Government will do that. It would be a powerful thing for the Minister to do and would give him huge clout in driving this agenda forward, so I hope he will do it even if the Committee votes against this amendment.
There should be a German word for a bit of data that we think should exist—we look on the internet and think we should be able to find it, but somehow it does not exist. This assessment of what is available out there is an example of that. I am keen to put our amendment to the vote, to make that point for our friends in the other place when they discuss the Bill, but I am reassured by the Minister’s comments.
Question put, That the amendment be made.
6|0|2|11|The Committee divided:|Question accordingly negatived.||0|0
Amendment proposed: 25, in clause 14, page 29, line 25, at end insert—
“(10) Before making regulations under this section the Secretary of State must lay before Parliament a report containing —
(a) details of the number of available placements in relevant establishments or agencies;
(b) an analysis of the expected impact of this section on the number of available placements in relevant establishments or agencies.”—(Neil O’Brien.)
Question put, That the amendment be made.
7|0|3|11|The Committee divided:|Question accordingly negatived.||0|0
Clause 14 ordered to stand part of the Bill.
Clause 15
Power of Secretary of State to impose monetary penalties
Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss clause 16 stand part.
My Department will introduce civil monetary penalties to compel children’s care providers to comply with the financial oversight scheme and—if implemented in the future—the profit cap. It is imperative that providers comply with the scheme in order to protect vulnerable children from the disruption to their homes and care that could result from a sudden market exit by the providers of their placements. If providers do not comply, we will tackle that effectively by introducing penalties. Penalties could apply up to the highest level of the organisational structure of a provider that has failed to comply with the scheme.
If a profit cap is introduced in future, clauses 15 and 16 provide for civil monetary penalties for breaches of any profit cap, to be issued at provider level. The Secretary of State will be able to issue monetary penalties for breaches of the cap, and for failure to comply with annual return requirements. Both are essential to allow for the proper administration of the cap—if we need to bring it in in the future.
Furthermore, if providers fail to comply, action may be taken against their registration. The Care Standards Act 2000 is amended to give Ofsted the power to suspend or cancel the registration of a person, in respect of a children’s home or fostering agency, if they have failed to comply with either measure.
Clause 16 sets out the process that both the Secretary of State and Ofsted must follow when issuing civil monetary penalties under provisions in the Bill. It will ensure that any penalties are issued fairly and consistently. It places a duty on the Secretary of State and Ofsted, when issuing a monetary penalty, to serve a notice of intention on the recipient. They must also take into account any representations from the recipient of the notice before a final decision to issue a penalty is made.
The clause sets out that the Secretary of State or Ofsted may issue a monetary penalty of any amount. The only exceptions to that are when the Secretary of State has prescribed in regulations a maximum penalty that may be imposed. Proposed new schedule 1A specifies the maximum amount and sets out the factors that must be considered when determining the amount of the monetary penalty to be issued, ensuring transparency.
To ensure that monetary penalties are paid on time, we will have the ability to charge interest on any unpaid penalty and to recover the unpaid amount, including any interest, as a civil debt. The interest will be charged at the standard rate, as specified in the Judgments Act 1838, but the total amount must not be more than the amount of the penalty. All penalty moneys are to go into the Consolidated Fund to help pay for vital public services. Finally, persons may appeal either the imposition of a penalty or the amount to the first tier tribunal. I commend the clause to the Committee.
I will be much briefer, because this is essentially a consequential clause relating to clause 14, but I want to touch on a couple of things.
A further difficulty in enforcing this profit clawback, and understanding what excess profit is, is that even within a single market not all these institutions are doing the same thing. In a funny way, the remarks that the hon. Member for Twickenham made about clause 14 go to that point. We look at the very large unit costs—that is a horrible expression—or the costs per child of care in independent special schools, and we think, “Gosh, these unit costs are so high. Surely we have to do something about this.” The Government and the Opposition are seized of that point—we do not want to spend money that we do not need to spend—but we should sometimes look at the individual cases.
For example, a child in my constituency who has just been put into one of these brilliant institutions—Red Kite, over in Northamptonshire—literally needs constant help just to keep breathing, so we have to be clear about whether these things are really like for like. It is true that that independent special school is a lot more expensive than a mainstream school, but is it really like for like?
As we think about capping profits in this industry, a further complexity is that, depending on the caseload and the child, the profit and risk levels will be different. Within an individual institution, there could be some unbelievably hard to place, hard to look after, very difficult and expensive children, alongside other children, so it will not be easy to work out an acceptable level of profit.
Proposed new schedule 1A(6), on the right of appeal against imposition of monetary penalty, further extends the opportunities for people to game the system. First, it is retrospective—it is about clawing money back from people after the fact, which gives them an opportunity to manage their profits so they look like they are compliant—and then there is a right of appeal. I understand why that is in the Bill, but to return to the metaphor about the lack of proper enforcement with regard to illegal working and the lack of information about the fines that are collected, by the time we have tried to claw money back retrospectively and given people the right of appeal, it would be easy for them to say, “This is in the name of my brother. We have collapsed the company. Sorry, we don’t have any money to pay this fine,” so we may not end up with anything at the end of it. Meanwhile, the people who are really behind the scheme have moved on and are doing the same thing down the road.
I want to highlight those points. This clause is consequential on clause 14. If we have clause 14, it makes sense to have clause 15, so we will not oppose it. I want to emphasise again, however, that there are even more dimensions to why it will be difficult to use this measure, so the focus should be on supply.
Question put and agreed to. Clause 15 accordingly ordered to stand part of the Bill. Clause 16 ordered to stand part of the Bill.
Clause 17
Information sharing
Question proposed, That the clause stand part of the Bill.
Clause 17 enables information sharing between Ofsted and my Department to ensure the effective functioning of the financial oversight scheme and profit cap regime. Sharing relevant information also supports Ofsted’s functions under part 2 of the Care Standards Act 2000.
For the purposes of a financial oversight scheme, effective information and the sharing agreements that are in place between my Department and Ofsted are crucial, and they will enable us to bring together financial corporate performance and quality indicators about individual providers to inform decision making. This clause does not authorise the processing of data, which would contravene data protection legislation.
I have a brief question. I understand what the Minister is trying to do here; the Secretary of State is taking powers to require the Ofsted chief inspector to share information with them in connection with the functions under this part. Can the Minister explain how that differs from the current ability of His Majesty’s chief inspector to share information with the Secretary of State? As the Minister just said, proposed new section 30ZO(8) is clear that it cannot contravene the GDPR legislation anyway, so I am trying to understand what gap this clause is trying to fix.
I thank the shadow Minister for that. Data will be shared to other parties as part of the financial oversight scheme. It is worth saying that the Department will share with local authorities which providers meet the financial oversight conditions and are subject to the financial oversight scheme. That is to support their local sufficiency and contingency planning.
To ensure that commercially sensitive information is kept confidential, we will not share any provider information submitted as part of this scheme with local authorities or the sector. The Department will use this information to make an assessment of financial risk and issue an advance warning notice to local authorities where there is a real possibility that financial risk could lead a provider to cease operating.
Finally, where providers or their corporate owners, as I mentioned earlier, breach the requirements of this scheme, the Department will publish information on civil monetary penalties imposed. That is to be transparent about providers who fail to comply with the scheme.
Question put and agreed to. Clause 17 accordingly ordered to stand part of the Bill. Clause 18 Use of agency workers for children’s social care work Question proposed, That the clause stand part of the Bill.
Clause 18, through the introduction of a regulation making power, will allow the Government to take stronger action to alleviate the significant affordability and stability challenges that have arisen from the increase in the use and cost of agency workers in local authority children’s social care in England. This clause ensures that, while agency workers remain an important part of local authority children’s social care, they do not become a long term replacement for a permanent, stable workforce.
The clause will allow the Secretary of State to introduce regulations on the use of agency workers in English local authority children’s social care services. It will strengthen the existing regulatory framework for the use of agency social workers in local authority children’s social care services, which is currently set out in statutory guidance. It will also extend the framework beyond the social workers to the wider local authority children’s social care workforce, such as agency workers delivering targeted early intervention or family help.
We remain committed to working in partnership with stakeholders across the children’s social care system, including agencies, to ensure that the proposals implemented are proportionate and effective. The clause provides a duty to consult ahead of introducing regulations.
Regulations will make it clear to local authorities, the recruitment sector and agency workers what they should expect from each other. The consistency that that brings to the market will benefit all parties. Reducing local authority spend on agency workers will allow local authorities to invest more in services supporting children and families and enhance the offer to permanent employees. I hope that the Committee agrees that the clause should stand part of the Bill.
We have not tabled an amendment to clause 18, but I have a lot of questions similar to those we have been asking about attempts to introduce profit capping for children’s care homes.
The Government clearly have two quite different hopes for this measure. On the one hand, the explanatory notes on the Bill say that strengthening the regulatory framework for the use of agency workers within local authority children’s social care services will improve the stability and quality of the agency workforce. That is the first hope. However, the notes also say that reducing local authority spend on agency workers will allow local authorities to invest more in services supporting children and families and enhance the offer to permanent employees. Those are two quite different objectives in different clauses of the Bill.
The last Government were taking steps to increase the number of people in social work. Those steps included the “step up to social work” scheme and the creation of social work apprenticeships, as well as advertising some of the amazing things that people can do and be part of as social workers. I take this opportunity to pay tribute to our social workers. They are amazing people. Theirs is a tough job, but people feel an enormous sense of pride in what they do, and when they look back on their careers they can reflect that they have helped a lot of people. It is an amazing profession.
According to the most recent DFE statistics, there were over 33,000 full time social workers in post in 2023. That is 4,600 more than in 2017, or a 16% increase. The caseload per full time equivalent worker had dropped from 17.7 cases to 16, the lowest in the series. We can say that that number is still too high, but it has at least been going in the right direction during my time in Parliament. Just under one in five of the full time equivalents is an agency worker, and the agency share has gone up, but sometimes people assume that it has gone up more than it has. In fact, from 2017 to now, it has gone up from about 19% to just under 22%. That is an increase, but we must keep these things in perspective. As with children’s homes, issues with agency workers are probably more likely to be resolved by addressing issues of supply and career progression, rather than attempting to freeze or cap prices without addressing supply. Crudely trying to cap prices runs the risk of increasing vacancies in social work teams, lengthening lead times for families or at risk children to get help, and putting more pressure on all the other staff.
When we look at the map, we see that not all local authorities are in the same position, facing the same costs, market forces and challenges. There are huge variations in the share of agency staff, even within regions, and in some regions, such as London, the use of agency staff is consistently higher. Applying the same rules, caps or limits to places facing totally different situations would be risky. That is why the last Government were talking about encouraging authorities in an area to come together on a voluntary basis to agree things, but were not forcing the pace or applying a hard national cap on a one size fits all basis. Sometimes when we look at the map, we can see what we think is the rationale—for example, Trafford is more expensive than Manchester. Trafford is quite expensive, but then we see other parts of the country where the issues are not connected to the costs. Why are Bradford and Leeds so different? Without understanding the story, it is pretty dangerous to move to a one size fits all solution.
Instead of alleviating significant workforce affordability pressures, which the explanatory notes say is the aim in the clause, a one size fits all regulation could make things worse. Interestingly, a poll found that only 16% of agency workers agreed with the idea of national rules, which suggests that many are choosing to work in this way. In other fields we sometimes want to regulate agency staff for the good of the staff, or because we are worried that they are being exploited. In this case, however, we should be clear that they are overwhelmingly not looking for new national rules—although it is worth saying that the same poll shows that local authority staff take a different view. We should be trying to understand why that is the case.
I imagine that both the flexibility and the wider conditions are among the reasons people want to work as agency staff, and they are far from alone in that. Across almost every public service, in each new generation there is a much higher level of demand for flexible working—being able to work at the times and in the places that people see fit. That is, in one sense, a good thing. The workforce is more female, for example. We can understand why people want it. On the other hand, it poses a challenge for public services to adapt and manage.
As I said, the clause has a dual goal, which the Government sets out in the notes. One part of it is potentially capping pay rates or numbers. The other part of it is to improve stability, so that there are better relationships and quality is higher. Proposed new section 32A(4), on page 35 of the Bill, lists the reasons why Government can act under the clause. Paragraphs (a) and (b) are about quality; they are about agency workers’ specified requirements, such as qualifications. Paragraph (b) is also about how they are managed, and it is very open ended. Paragraph (c) then says, “including the amounts which may be paid under such arrangements”.
I see no limit—although the Minister may tell me that there is one—on what the Government can do under that paragraph. Might they be able to set individual limits for individual local authorities? I see no obstacle to them doing that; it is a very strong power. If Minister were so inclined—I am sure that none is—they could micromanage the whole situation and try to run it from the centre.
I am interested to hear the Ministers’ views on the Government’s intent. How plausible do they think using those powers is, and what do they think are the obstacles to fixing the problem by directly regulating against it, rather than by improving supply overall?
We are, in a sense, again being asked for a blank cheque in so far as everything is in regulations. We do not have the promised impact assessment, although of course there is a commitment to engage extensively with the sector before introducing secondary legislation. There will be public consultation, and the regulations will be subject to the affirmative procedure, but as the Minister knows, that means they cannot be amended, so we will have no steer over them. It is a very strong power to heavily manage almost every aspect of the use of agency workers. There is, more or less, nothing that the Government cannot do under subsection (4).
Rather than asking lots of specific questions, I want to get a general sense from Ministers of how they feel about that. A lot of people say, “There are too many agency staff.” It is not obvious to me that there has been a ballistic growth in their numbers, or that there is a “right level”, which we are not at. I said that the level is now about a fifth; should it be what it was in 2017? Was that the right level, or was it the level it was in 2010 or 1997? Quite often, we hear people say that it is terrible that there are so many agency staff, but what is the right proportion? It is probably not zero.
The power being given is big, sweeping and general, and I do not have a firm sense from Ministers of what they want to do with it or when they will know what they want to do with it. When I listen to some people in this debate—not necessarily Ministers—I am struck by the naiveté of Ministers riding in and saying, “Right, you’re banned from having any agency workers,” or, “You’re all capped at a maximum of x per day or x per hour,” and thinking that that will not cause problems. In a country like England, with all our divergences, the Government would quickly get into big trouble if they did those things. I do not think Ministers are so unwise.
I would like to get the Minister’s response to the concerns I have raised about the limits of action on pay. I am less worried about whether agency workers should all have qualifications; we should do everything we can to drive up continuous learning and professional development. That is all good stuff. I do not have a big problem with making agency workers more like local authority workers and making them part of the team. What I am more wary about is proposed new section 32A (4)(c), which seems to suggest that the Government intend to attack profiteering. I would be interested in the Minister’s response to those concerns.
I join the shadow Minister in paying tribute to our social care workforce. Social care is an incredibly tough job, and I take my hat off to anybody who goes into the profession.
I understand the Government’s motivation and objectives, which are similar to those behind the provisions on care providers and the costs involved. We should also think about the children’s experience. Whenever I have spoken to care experienced children, they have told me that their biggest frustration is with the huge turnover of staff, which means that they have to share their stories and relive their trauma a number of times. Often, they have a new social worker every few months. It is therefore important to try to clamp down on the use of agency workers.
However, I share the shadow Minister’s concerns about what the measures will mean in terms of ensuring that we have an adequate workforce. They do not necessarily tackle some of the root problems that motivate social workers to opt for agency contracts. They do not tackle challenges around costs and pay and conditions in the context of the cost of living crisis, nor do they address the fact that workers may get flexibility through agency working that they do not get in a permanent role. We need also to look at supporting continuous professional development for qualified social workers, as we do with doctors, who receive 10 years worth of funded training and development on the job. We do not do something similar for social workers.
I want to hear more from the Minister about whether the Government have a workforce strategy to address the root causes of more and more social workers opting for agency contracts, which is not good for taxpayers or for the child’s experience. How can we address the fundamental causes and get more people into the workforce?
I thank both hon. Members for their probing of the clause. No amendment has been tabled, and there seems to be general agreement that the principle is right. Over reliance on agency workers contributes to workforce instability, which has implications for both the workforce and the children it is there to serve. It also puts pressure on local authority budgets. I thank both hon. Members for recognising the challenging but hugely valuable work of social workers, which is often unrecognised and un thanked. It is good that we take the opportunity to put on record our collective gratitude to them for the difficult work that they do.
Many local authorities are already demonstrating success in transitioning agency workers into their permanent workforces. People who work in social care need the right environment so that they can thrive, personally and professionally. We recognise that regulation alone is not the answer, but the Government are supporting local authorities to attract and retain children’s social workers and provide positive working environments for all who work in children’s social care, because ultimately children will benefit.
Local authorities will still be able to use agency workers if doing so is the most appropriate resourcing option and in line with the regulatory framework, but it is important to reduce local authority spend on agency staff and to allow local authorities to reinvest in the permanent children’s social care workforce. Statutory guidance that has already been issued on this matter has allowed the Government to act quickly to introduce a new framework. The framework focuses on social workers, but other Government Departments are working on the same issue.
Guidance can be departed from in certain circumstances, so introducing regulations on the use of agency workers is appropriate and proportionate. It is important that we strengthen the regulatory framework on the use of agency workers in children’s social care to ensure that it is legally binding, so that we bring greater transparency and accountability to the use of agency workers, as the right hon. Member for East Hampshire suggested. We will continuously consider the evidence, ensuring that we take an informed approach to those regulations.
There is a statutory duty to consult before introducing regulations. We commit to working in partnership with stakeholders across children’s social care, ensuring that any proposals that we introduce are proportionate and effective. We are also working with local authorities and regions on developing price caps. We will look at the data later this year, before introducing those changes, and the raised regulations will be subject to consultation and the affirmative procedure. With those comments and queries responded to, I hope that Members feel that they can support the clause.
I think the Minister answered this question when she said that, in respect of caps, she was working on a regional basis, but does the provision give the Government the power to cap on any basis, including at a local authority level? The Government could say that the cap is x in Westminster and y in County Durham—is my understanding correct?
As is becoming more evident as the Committee progresses, the hon. Member is very focused on the detail. Obviously, that is something that we will work through as part of our development of the statutory regulations. We will consider developing price caps on a regional basis, but we will look at the evidence and consult as well. That is important, because I think we all agree in principle on the provision, and we will work hard and consult to ensure that we get it right.
Question put and agreed to. Clause 18 accordingly ordered to stand part of the Bill. Clause 19 Ill treatment or wilful neglect: children aged 16 and 17 Question proposed, That the clause stand part of the Bill.
Clause 19 amends sections 20, 21 and 25 of the Criminal Justice and Courts Act 2015. That Act protects over-18s in regulated social care settings and everyone provided with certain healthcare from ill treatment and wilful neglect, and the Children and Young Persons Act 1933 protects all under-16s from cruelty, so if someone is under 16 or over 18 there is protection in place to prosecute perpetrators of abuse. However, there is a gap that means that carers or care providers involved in the wilful neglect of 16 and 17-year olds in regulated children’s social care settings or youth detention accommodation cannot be prosecuted. We are therefore expanding the 2015 Act so that the offence includes protections for 16 and 17-years olds.
The change means that where there has been ill treatment or wilful neglect by those providing care or support in regulated establishments, the law will support the relevant authorities in prosecuting the individuals and providers involved. I am sure we all want the right legal protections to be in place for all children, and for the law to support action being taken against those involved in abuse or neglect. I hope the Committee agrees that the clause should stand part of the Bill.
We support clause 19, which closes an important gap in the law regarding the ill treatment and neglect of 16 and 17-year olds. I have some specific questions. Have the Government considered making the ill treatment or wilful neglect of a child aged 16 or 17 in a children’s home or other regulated setting, as set out in the Bill, an aggravating factor in the sentencing of those cases? The low level of the terms “ill treatment” and “wilful neglect” sits uncomfortably beside the context, reality and vulnerability of those children. Will the Government think about the criminal justice side of that?
My second question is about children who are held on remand in the youth estate. Members who have read my Substack will know that, both under the last Government and this one, I have complained a lot about the growth in the remand population in the adult and youth estates, and the court delays that drive that. A lot of children now in the youth estate are held on remand—about 40%—so can the Minister confirm that these provisions will apply to children who are held on remand in youth detention accommodation, and not just to those who have been sentenced? Those on remand are there temporarily, and as we fix one important hole in the law, I want to check whether we need to fix another one, or whether it is already covered. I am happy if the Minister wants to write to us on that point because it is quite detailed.
I thank the hon. Gentleman for his support for the clause. To answer his second question, the change will affect regulated establishments in children’s social care, including youth detention accommodation. It will therefore cover children’s homes, residential family centres, accommodation where holiday schemes for disabled children are provided, and supported accommodation settings. There are other measures already in place to protect all children, including 16 to 17-year olds, against abuse and neglect within children’s social care settings and youth detention accommodation. This clause is specifically intended to address the current legal gap.
I think the most natural reading is that those children should be covered, because they are in the YOIs. I just wondered whether there was a potential issue because they are not permanently there; they are just on remand. I wonder whether the Minister could check with her officials to ensure that we are not missing an opportunity.
I will double check on the hon. Gentleman’s behalf, but my understanding is that they will be covered, given that they come within the remit of youth detention accommodation. I will certainly convey his point about wilful neglect being an aggravating factor within the criminal justice system as a query to the Ministry of Justice, as it may be worth considering with the change being brought through in this education legislation. With that, I commend the clause to the Committee.
Question put and agreed to. Clause 19 accordingly ordered to stand part of the Bill. Clause 20 Employment of children in England Question proposed, That the clause stand part of the Bill.
The clause seeks to amend the Children and Young Persons Act 1933. To help to develop this policy, we spoke to both children and employers. The changes in the clause are the ones that they told us they would like to see. The clause will require all children in England to have an employment permit in order to undertake suitable employment. The permit will make local authorities aware of the children working in their area. It will ensure that children are safeguarded as they undertake valuable employment, while still having access to their education.
The measure will give more flexibility to children and employers in relation to when children can work, which will give children more opportunities to take up suitable employment while still ensuring that their health, development and education outcomes are supported. Allowing children to work additional hours on a Sunday, and before and after school, will help them to benefit from additional suitable employment opportunities. Employment can contribute to a child’s development, introduce them to the world of work and develop key employability skills.
The clause will also replace a power for local authorities to make byelaws in relation to child employment with a power for the Secretary of State to make regulations in relation to the employment of children in England. Having a single set of regulations that apply to all children who work in England, rather than each local authority having its own byelaws, will ensure fairness in outcomes for all children in England.
Our changes will also make it easier for children and their parents to understand what roles they can undertake, and for employers to know on what basis they can employ a child. They also mean that as types of work change, we will be able to restrict new types of employment that are not suitable for children more quickly. Additionally, we will be able to make previously restricted employments available for children, should changes in the way that they are carried out make them suitable. That will ensure that the legislation stays current.
I hope the Committee agrees that the clause should stand part of the Bill.
As the Minister says, the clause essentially centralises and harmonises differences in rules on children’s employment, which are currently set partly at the local level. As a localist, I start with a small degree of nervousness, in so far as we are taking away a local authority power. We have done that an awful lot over the last 40 years.
I do not have a great objection to this measure, because in general it is a liberalisation overall. The notes provided by the Library are quite good, in so far as they talk about the extensions in different ways that this will bring about in most local authorities. I do have one slight nervousness, though, from a practical rather than a philosophical point of view. When we replace a complicated patchwork quilt and a lot of variation with a single national rule, we must check that every place is clear about the impact. To pick a random example used in the Library briefing, the byelaws of Birmingham city council do not include the line allowing 13-year olds to work on car washing by hand in a private residential setting that is present in Richmond upon Thames and in the model byelaws.
I do not know whether the Government have a spreadsheet or an assessment somewhere detailing the current differences between the laws in all the different places. I hope that they do, because although in general it sounds like we are harmonising all these things across the country in a way that is liberalising, by having more times when young people and children can work, in some cases there might be a restriction, and it would not be a small thing for anyone caught by that restriction to be found breaking the law on the employment of children.
Although ignorance of the law is no defence, one might feel that it perhaps should be where people have been happily working away on the basis of their local authority’s byelaws for some time, when suddenly, without them clocking it—because they do not read Hansard every day—the law changes and they can no longer do what they were doing before. Those people could easily be caught out, as the rules change and we move from a patchwork quilt to a single national standard.
As I say, I have some philosophical questions about the loss of local authority autonomy. However, because the direction of travel overall seems to be more liberalising than not, I do not think that we will oppose the clause, although I would ask the Minister to commit to producing that assessment of what the rules are now, compared with what they will be, which might be a sensible thing to do purely from the point of view of any legal challenge.
The Minister might stand up and say, “We’ve already done that—obviously,” but if that has not happened already, will she commit to doing it, so that we are super clear for individual local authorities about how the rules will be changing? Such a document or spreadsheet would be of benefit not just to those of us discussing these things nationally, but to the local authorities—the laws are changing in their areas—and to the actual employers of young people, so that they are not caught out by some of the changes and, indeed, are potentially alerted to the new opportunities that the more liberalising aspects of the clause will bring about.
It is a good thing for young people to be in employment at an early age—some of the best jobs I have ever had were when I was a young person working on a farm. That was an absolutely fantastic experience. We want young people to be able to get on with their lives, not to be held back. We are generally supportive of the liberalising aspects of the clause, but we have that nagging doubt.
We strongly encourage the Minister to do that work—indeed, we hope she will commit to doing it—on how the move from a patchwork quilt to a single set of national rules will affect each local authority, so that someone has done the work, not least for the legal protection of the Minister herself, but for the legal protection of those on the ground who will be affected.
I am not at all opposed to the clause, but I am curious to know what prompted it. What outside world events made us rethink the regulations? I heard what the Minister said about consulting young people, but I am struggling slightly to picture that conversation, where the kid goes, “You know, what we really need is a change in the employer licensing regulations.” But fair enough.
The changes are in some ways liberalising by increasing the latest hour from 7 o’clock to 8 and allowing Sunday working, but in other ways they are restricting. I am interested in what is behind that. There are risks to guard against in the employment of children, but the employment of children is not in itself an ill to be mitigated. There are many benefits to the child in having that opportunity. In fact, the biggest gripe we hear from employers about young people—it happens again and again—is about what some call soft skills, or employability skills or workplace skills. Whatever we want to call it, those are skills that people develop at work. Many times over the years, whenever I have had a group of leaders and industry together, I have gone round the room and literally asked, “How old were you when you first did a day of paid work?” The most typical, most common answer is 14—some say 15, and for some it is younger. It is important that we learn from that.
In the last 25 years, there has been a sharp decline in the number of under-16s and under-18s doing paid work. That is partly because of the decline in certain job types—there are not many paper rounds or milk rounds any more—and partly because of social attitudes. When we had public exams in the lower sixth and upper sixth for most children, that probably had an impact for the slightly older age groups. One of the reasons that employers find it daunting to employ children is that they are often unclear about what the regulations are, but they have a sense that there are risks, including reputational risks and so on.
The explanatory notes state: “The Secretary of State will have a power to make regulations in relation to child employment which will replace the power local authorities currently have to make bylaws. The regulations may prohibit the employment of a child in certain types of work, make provision in relation to child employment permits, authorise the employment of 13-year old children and set out the number of hours children can work per day or week, their entitlement to breaks and leave and to specify other conditions of employment”.
It is quite a list.
Today, to be clear, children can work part time from the age of 14. In some council areas, the minimum is 13. Are the Government now saying that the minimum age will become 13 throughout the country? What limits do they envisage in ordinary times for additional regulation? There is rightly already plenty of regulation about the employment of anybody and further regulation about the employment of people who are below 18. What additional regulation do the Government envisage?
The Government will say that there will be secondary legislation under the affirmative procedure and that it will all be fine, but we know how secondary legislation works—often in this very room—under the affirmative procedure. Often people do not know about it very far in advance. A Committee of Members of Parliament comes here and debates the secondary legislation—I was going to say that the MPs vote on it, but often they do not—the legislation cannot be amended, and then it moves on. Given that we are talking about the primary legislation, it would be helpful to get on the record what the Government are thinking about doing in this area.
As my hon. Friend the shadow Minister rightly said, having a standardised system of permits nationally is okay in principle. Indeed, benefits may well come from that, but it goes somewhat against the direction of travel from a Government who are introducing devolution in local government and changing the levels at which responsibility is held. The danger with a national system for something like this is that we could lose some of that local knowledge and variability, for example, in rural areas of the country with heavy agricultural sectors. Employment can be different there. In seaside towns with more seasonal employment, that might affect the employment of children. Can the Minister give us some reassurance that there will not be scope creep, for example through the introduction of further regulations for the employment of children in the family business or activities such as babysitting? Can she also assure us that the minimum age exemptions with a performance licence for the creative industries—theatre, film and television—will not be lost?
I do not have a philosophical problem with this clause either. I was slightly surprised to find it when I was reading the Bill and to hear where it came from, but I understand what the Government are attempting to do.
Before press releases start going out suggesting that the Lib Dems want to promote child labour, I will preface my next question with some feedback from the National Network for Children in Employment and Entertainment. It has raised some concerns that the later hour set out in the legislation does not fully address the employment of young people in televised and live sporting events. That is particularly the case where we now have the benefit of floodlights and roofs—I think of the late matches on centre court at Wimbledon, when we have ball boys and ball girls from the local area working there. I understand that there is a different licensing regime if children are participating in sport, but this measure would apply to some of the children working at those sporting events. What consideration have Ministers given to those sorts of situations? Have they spoken to the National Network for Children in Employment and Entertainment?
For organisations with particular shift and working patterns—for example, those involving non performance roles in theatres, including in lighting or backstage—the National Network for Children in Employment and Entertainment suggests allowing hours later than 8 pm on a Friday or Saturday for older teenagers, provided that the next day is not a school day. I am not necessarily suggesting that that is the right thing to do, but that is a suggestion made by that organisation given its needs. It would be good to get some clarification on when the current byelaws for child employment will cease and when regulations from the Secretary of State will replace them.
Importantly, what consideration has been given to safeguarding and DBS checks of employers where young people are working? The right hon. Member for East Hampshire touched on that. We have self employed young people offering their services as tutors, babysitters and gardeners. I understand that some of them are offering their services through apps and things nowadays, and they are presumably not touched by these regulations, so what consideration have Ministers given to children in those sorts of services?
Considering the level of agreement on this provision, there is a significant amount of interest and questions around it. It might help if I clarify that currently a child can work for a maximum of only two hours on a Sunday and up to 7 pm at night, which restricts employment opportunities. It may not make business sense to employ a child who is able to work only a very short shift. We spoke with children while developing this policy, and they were pretty universally of the view that they would like to have more flexibility in when they can work, not necessarily in the amount that they wish to work. Clause 20 will not change the overall number of hours that a child can work, but it will give children much greater flexibility to maximise the opportunities that hopefully will become available to them as this area becomes more clearly set out as part of the legislation.
Employers and sector bodies have set out the difficulties in being able to offer employment to a child either on a normal trading day or when they experience peak demand when the child has worked their requisite two hours. That often closes down opportunities that children could easily have had and would have enjoyed having. Businesses would appreciate having those children as part of their team, but the restrictions in the current arrangements often make that difficult to accommodate.
I have a question about babysitters, which are one of the hardest cases here. This question is as much about the existing law as it is about the proposed change in the cut off from 7 pm to 8 pm. Are people who employ babysitters after 7 pm or 8 pm committing a criminal offence under the clause?
I do not believe that people register with their local authority to ask someone under the age of 16 who they know to babysit in their home. My understanding, therefore, is that these regulations would not apply in those circumstances.
To explain another issue that these measures are intended to fix, the vast majority of local authorities simply follow the byelaw model, so they are already in place. However, some local authorities have additional restrictions in their rules for employing children. That has led to some local authorities, which may be geographically located directly next door to each other, having different restrictions. For example, one local authority might decide to add a role to the restricted employment list, but the other might not. That leaves children, parents and businesses, which do not always operate within local authority boundaries, somewhat confused. As the right hon. Member for East Hampshire pointed out, that can put employers off employing children, even where it might be to the benefit of both that these opportunities are available.
Replacing the power for local authorities to make byelaws with the power for the Secretary of State to make these regulations will ensure fair outcomes for all children right across England. That means that a child, their parent or a business can know what work can be undertaken, and when and by whom, wherever they live in England. National employers will also hopefully be encouraged to employ children who are looking for these opportunities, as they will not be put off by inconsistencies around the country that create bureaucratic obstacles to opportunities. That will provide much needed employment for businesses across the country. I hope that I have responded to the majority of concerns about this largely—I certainly get the impression—uncontested clause.
rose—
It would, however, appear that the shadow Minister has another query.
I thank the Minister for her patience. Will the Government undertake to have an authority by authority assessment of what the patchwork quilt looks like now? For everyone’s ease and benefit, what will the changes mean for those who are not just following the model byelaws, because they are maybe different in each different place? Is the Minister happy to at least go away and have a look at that?
As part of the work to create the draft legislation that we are debating, an assessment of local authorities was undertaken. That assessment has not changed the view that a more consistent approach across the country would be beneficial to children, employers and their families—indeed, it threw up the fact that the vast majority of local authorities do follow the current byelaw framework. This clause not only creates a nationally consistent approach; it creates a better and more flexible approach for children, which will hopefully unlock opportunity for them to take their first steps on the employment ladder.
Question put and agreed to. Clause 20 accordingly ordered to stand part of the Bill. Ordered, That further consideration be now adjourned. —(Vicky Foxcroft.)
Adjourned till Thursday 30 January at half past Eleven o’clock.
Written evidence reported to the House
CWSB84 Camilla Wells
CWSB85 Poppy Coles
CWSB86 Jodie Coles
CWSB87 Sarah Osborne
CWSB88 Philippa Nicholson
CWSB89 Nikki O’Rourke
CWSB90 Kate Richards
CWSB91 Jen Cornell
CWSB92 Wendy Charles Warner
CWSB93 Philippa Clark
CWSB94 Nikki Hughes
CWSB95 An individual who wishes to remain anonymous
CWSB96 Georgina Stubbings
CWSB97 Emily Rose Gray
CWSB98 Jennifer Watts
CWSB99 Emma Ridley
CWSB100 Sarah Mansfield
CWSB101 Royal College of Paediatrics and Child Health (RCPCH)
CWSB102 Erion Sovron
CWSB103 Deepa Naik
CWSB104 Stella De Luca
CWSB105 Julianne Chatfield
CWSB106 Sarah Willcox
CWSB107 An individual who wishes to remain anonymous
CWSB108 An individual who wishes to remain anonymous
CWSB109 Gabrielle Kelly
CWSB110 Holly Strawbridge
CWSB111 Charlotte White
CWSB112 Alexis Massey
CWSB113 John Tang
CWSB114 Dr Alice Porter (Senior Research Associate in Diet and Physical Activity, Bristol Biomedical Research Centre, University of Bristol)
CWSB115 MyBnk
CWSB116 Jonathan Pearce, owner of OZ Schoolwear LTD
CWSB117 Dr Harriet Pattison, School of Education, Liverpool Hope University
CWSB118 Sense
CWSB119 Dr Peter Appleton, Visiting Fellow, School of Health and Social Care, University of Essex
CWSB120 Polaris Community
CWSB121 National Secular Society (NSS)
CWSB122 School Food Matters
CWSB123 Bright Futures UK
CWSB124 WONDER Foundation
CWSB125 Royal College of Paediatrics and Child Health, NSPCC and Barnardo’s (joint submission)
CWSB126 NASS (National Association of Special Schools) (further submission)
CWSB127 Professor Andrew Rowland, University of Salford; Professor Felicity Gerry, University of Salford and Deakin University; Professor Daryl Higgins, Australian Catholic University; and Professor Sophie Havighurst, The University of Melbourne
CWSB128 Glenn Leech, CEO of Banner Ltd
CWSB129 Louise Renshaw, Director, Classworx Ltd
CWSB130 Spotlight, Agents of Young Performers Association (AYPA) and Keystone Law
CWSB131 National Governance Association (NGA)
CWSB132 Fatherhood Institute
CWSB133 David Hunt, Research Director, Aristotle Foundation for Public Policy; Brian Ray, PhD, President, National Home Education Research Institute (NHERI); and Kevin Boden, Esq., Attorney & International Director, Home School Legal Defense Association (HSLDA)
CWSB134 Whizz Kidz
CWSB135 Christian Legal Centre
CWSB136 The Steiner Academy Hereford
CWSB137 Alex Montegriffo, Community Organiser and Campaigns Manager at Devizes and District Foodbank
CWSB138 British Association of Social Workers (BASW) England
CWSB139 Parentkind
CWSB140 The Children’s Society (supplementary submission)
CWSB141 National Network for Child Employment and Entertainment (NNCEE)
CWSB142 Di Larfynn
The Committee consisted of the following Members:
Chairs: Peter Dowd, Sir Roger Gale, Sir Mark Hendrick, † Mark Pritchard
Ahmed, Dr Zubir (Glasgow South West) (Lab)
† Al Hassan, Sadik (North Somerset) (Lab)
† Barros Curtis, Mr Alex (Cardiff West) (Lab)
† Bool, Sarah (South Northamptonshire) (Con)
† Chambers, Dr Danny (Winchester) (LD)
† Cooper, Dr Beccy (Worthing West) (Lab)
† Dickson, Jim (Dartford) (Lab)
† Foy, Mary Kelly (City of Durham) (Lab)
† Gwynne, Andrew (Parliamentary Under Secretary of State for Health and Social Care)
Jarvis, Liz (Eastleigh) (LD)
† Johnson, Dr Caroline (Sleaford and North Hykeham) (Con)
Osborne, Tristan (Chatham and Aylesford) (Lab)
† Owatemi, Taiwo (Lord Commissioner of His Majesty's Treasury)
† Rankin, Jack (Windsor) (Con)
† Stafford, Gregory (Farnham and Bordon) (Con)
† Stainbank, Euan (Falkirk) (Lab)
† Whitby, John (Derbyshire Dales) (Lab)
Chris Watson, Kevin Candy, Sanjana Balakrishnan, Committee Clerks
† attended the Committee
Public Bill Committee
Tuesday 28 January 2025
(Afternoon)
[Mark Pritchard in the Chair]
Tobacco and Vapes Bill
Clause 136
Addition of smoke free places in England
Amendment proposed (this day): 10, in clause 136, page 77, leave out lines 26 to 29 and insert—
“(a) for subsection (1A) substitute—
‘(1A) The Secretary of State must, no later than the end of the period of 6 months beginning with the day on which the Tobacco and Vapes Act 2025 is passed, lay draft regulations to be made under this section which have the effect of providing for all enclosed vehicles to be smoke free, other than vehicles of the type described in subsection (3).
(1B) Regulations may make provisions about the meaning of “enclosed vehicle”, which may include vehicles which are partially enclosed or enclosed (or capable of being enclosed) for some but not all of the time.’”—(Jim Dickson.)
This amendment requires the Secretary of State to make regulations which would extend the existing prohibition on smoking in vehicles to all enclosed vehicles except ships and hovercraft which are regulated under other legislation. The prohibition currently only applies to workplace vehicles and vehicles carrying under 18s.
Question again proposed, That the amendment be made.
I am grateful to my hon. Friend the Member for Dartford for putting this amendment before the Committee for discussion. The amendment would require the Government, within six months of this Bill gaining Royal Assent, to introduce regulations to prohibit smoking in all enclosed vehicles, other than certain vessels.
I have a lot of sympathy with the arguments my hon. Friend has put to the Committee on the harms of passive second hand smoking, and I am certainly sympathetic to amendment’s aim of further reducing exposure to second hand smoke. However, as I am sure the Committee is aware, smoking has been banned in enclosed vehicles used as a workplace or a public place since 2007, and it has also been banned where someone under 18 is present since 2015. We think that this level of protection is appropriate and provides the correct balance between protecting children and vulnerable people from the harms of passive smoking, while not unduly impacting current smokers by interfering with private spaces. That is an important point, because both I and the Secretary of State have been very clear from the outset that we are not seeking to extend measures in this Bill into private spaces.
I remind the Committee that, in the smoke free generation that we hope and expect the Bill to create, smoking will become a thing of the past. Therefore, hopefully in the not too distant future, we will not see anyone smoking in a vehicle because smoking will just not be as prevalent in the UK as it is today. Most people are law abiding citizens, and we would expect the measures in this Bill, and indeed the in my hon. Friend’s amendment, to be something that most people consider anyway. If they are in an enclosed space such as a vehicle with a friend who has vulnerabilities, most people would probably not light up because they would recognise the harm that they may do to their friend.
Furthermore, the measures in the amendment would be for the police to enforce. We have had no prior conversations with Home Office colleagues about whether this is a power they seek or whether the police would be concerned about its enforceability. That would need further consideration if we were to proceed with this. Having said that, we just do not think that there is a strong argument for interfering in private spaces by extending this prohibition to smoking in all vehicles within six months of the Bill reaching Royal Assent. That is not a large amount of time anyway for such a major change. It is for those reasons that I ask my hon. Friend to withdraw the amendment.
Once again, the Minister has made convincing arguments for why now may not be the right time for this amendment to become legislation and be adopted. However, I think that within the next decade or so this measure is likely to become law one way or another, so for the moment I am content not to press it. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
I beg to move amendment 84, in clause 136, page 77, line 33, at end insert— “(3A) In section 7 (Offence of smoking in smoke free place)— (a) in subsection (6), at end insert ‘, save if it is a first offence.’
(b) after subsection (6) insert— ‘(6A) A person who has admitted guilt of a first offence under this section is liable to a fine not exceeding level 3 on the standard scale or a caution.’
(3B) In section 8 (Offence of failing to prevent smoking in smoke free place)— (a) in subsection (7), at end insert ‘, save if it is a first offence.’
(b) after subsection (7) insert— ‘(7A) A person who has admitted guilt of a first offence under this section is liable to a fine not exceeding level 3 on the standard scale or a caution.’”
This amendment prevents penalties for a first offence under sections 136 (pertaining to smoke free area restrictions in England) being beyond a fine of level 3 and provides for a discretionary caution.
With this it will be convenient to discuss the following: Amendment 85, in clause 142, page 85, line 29, at end insert— “(ya) in section 1 (Offence of permitting others to smoke in no smoking premises)— (i) in subsection (4), at end insert ‘, save if it is a first offence.’
(ii) after subsection (4) insert— ‘(4A) A person who has admitted guilt of a first offence under this section is liable to a fine not exceeding level 3 on the standard scale or a recorded police warning.’
(za) in section (2) (Offence of smoking in no smoking premises)— (i) in subsection (3), at end insert ‘, save if it is a first offence.’
(ii) after subsection (3) insert— ‘(3A) A person who has admitted guilt of a first offence under this section is liable to a fine not exceeding level 3 on the standard scale or a recorded police warning.’”
This amendment prevents penalties for a first offence under sections 142 (pertaining to smoke free area restrictions in Scotland) being beyond level 3 and provides for a discretionary caution. Amendment 97, in clause 147, page 93, line 13, at end of line insert— “(1A) In the Welsh language text of section 5 (Y drosedd o ysmygu mewn mangre ddi fwg neu gerbyd di fwg), at end of subsection (6) insert ‘, arbed os trosedd cyntaf ydyw.’
(1B) In the Welsh language text of section 5 (Y drosedd o ysmygu mewn mangre ddi fwg neu gerbyd di fwg), after subsection (6) insert— ‘(6A) Mae person sydd wedi cyfaddef ei fod yn euog o drosedd gyntaf o dan yr adran hon ynagored i rybuddiad.’
(1C) In the English language text of section 5 (Offence of smoking in smoke free premises or vehicle), at end of subsection (6) insert ‘, save if it is a first offence.’
(1D) In the English language text of section 5 (Offence of smoking in smoke free premises or vehicle), after subsection (6) insert— ‘(6A) Mae person sydd wedi cyfaddef ei fod yn euog o drosedd gyntaf o dan yr adran hon yn agored i rybuddiad.’
(1E) In the Welsh language text of section 6 (Y drosedd o fethu ag atal ysmygu mewn mangre ddi fwg), at end of subsection (9) insert ‘, arbed os trosedd cyntaf ydyw.’
(1F) In the Welsh language text of section 6 (Y drosedd o fethu ag atal ysmygu mewn mangre ddi fwg), after subsection (9) insert— ‘(9A) A person who has admitted guilt of a first offence under this section is liable to a caution.’
(1G) In the English language text of section 6 (Offence of smoking in smoke free premises or vehicle), at end of subsection (9) insert ‘, save if it is a first offence.’
(1H) In the English language text of section 6 (Offence of smoking in smoke free premises or vehicle), after subsection (9) insert— ‘(9A) A person who has admitted guilt of a first offence under this section is liable to a caution.’”
This amendment prevents penalties for a first offences pertaining to smoke free area restrictions in Wales being a fine or imprisonment and makes provision for the penalty for a first offence pertaining to smoke free area restrictions to be a cautionary warning. Amendment 86, in clause 153, page 109, line 9, at end insert— “(3A) In Article 8 (Offence of smoking in smoke free place)— (a) in subsection (5), at end insert ‘, save if it is a first offence.’
(b) after subsection (5) insert— ‘(5A) A person who has admitted guilt of a first offence under this Article is liable to a fine not exceeding level 3 on the standard scale or a conditional caution.’
(3B) In Article 9 (Offence of failing to prevent smoking in smoke free place)— (a) subsection (6), after ‘scale’ insert ‘, save if it is a first offence.
(b) after subsection (6) insert— ‘(6A) person who has admitted guilt of a first offence under this Article is liable to a fine not exceeding level 3 on the standard scale or a conditional caution.’”
This amendment prevents penalties for a first offence under sections 153 (pertaining to smoke free area restrictions in Northern Ireland) being beyond level 3 and provides for a conditional caution.
This group of amendments comes back to the principle of proportionality, because there is not complete coherence between the different penalties across the United Kingdom and on the different offences that can be committed under the Bill.
The first part of amendment 84 would ensure that if someone admits guilt of a first offence of smoking in a smoke free place, they should be liable to a fine not exceeding level 3, which is £1,000 on the standard scale, or a caution. That is a lot of money for lighting up in the wrong place, so it seems reasonable.
The second part of amendment 84 relates to the offence of failing to prevent smoking in a smoke free place, which is where somebody who is in charge of an area or building fails to prevent people from smoking there. Again, we are asking the Minister to consider the proportionality of the penalty if this has not happened before, compared with a repeat offender, who we would want to throw the book at, metaphorically speaking.
Amendment 85 relates to Scotland. Amendment 97 relates to Wales and is partly in Welsh, and amendment 86 relates to Northern Ireland. Again, we are asking the Minister to consider whether the penalties are proportionate to the offence committed and whether the legislation gives due flexibility and enough guidance for someone committing an offence for the first time, perhaps inadvertently, to be treated differently from someone who is repeatedly flouting the law.
I am grateful to the shadow Minister for her comments. I have a sense of déjà vu, given that we have already debated ad nauseam her desire to weaken the enforcement regime and the penalties.
That’s not true!
The hon. Lady says that is not true, so maybe it is not quite ad nauseam, but we have covered an awful lot of ground on these arguments.
I do not seek to weaken the Bill or its enforcement. I wish to see the Bill be successful in stopping people smoking and vaping, particularly our young people, and I wish to see people who are repeatedly flouting the law in this way treated appropriately. However, I am keen to understand whether the Minister feels there is enough flexibility to deal with offenders appropriately, particularly if it is an inadvertent first offence.
We will have to agree to disagree, because I think anything that brings in lesser penalties than those that already exist in tobacco control, and I will resist that as I resisted the shadow Minister’s earlier temptations to be more lenient to certain people.
These amendments would change the penalty regime for the offence of smoking in a smoke free place in England, Scotland, Wales and Northern Ireland and the offence of failing to prevent smoking in a smoke free place.
Does the Minister accept that a fixed penalty notice of £200 is actually a more lenient penalty than a fine of £1,000 or a caution, which incurs a criminal offence?
I will come on to those points in due course to explain to the Committee why I think the shadow Minister is wrong in this regard and why she was wrong in all previous discussions about weakening the penalty system for first time offenders. The amendments would create an exception to the maximum penalty that a person can face for committing one of these offences, if it is the person’s first time offence. It would establish that someone who admits to committing either offence for the first time would be liable on summary conviction to a fine not exceeding level 3 on the standard scale, which is £1,000, or instead to a caution in England and Northern Ireland, or a recorded police warning in Scotland.
For the offence of smoking in a smoke free place, that is two levels higher than the level of fine someone is liable to under the current legislation, which is level 1 or £200 in England, and it is the same as the current level of fine in Scotland and Northern Ireland. For the offence of failing to prevent smoking, the new maximum fine would be one level lower, which is level 3 or £1,000, than the level of the fine that someone liable to under the current legislation, which is level 4 or £2,500, in all three nations. In Wales, amendment 97 would remove a fine altogether and someone who admits to committing either offence for the first time would be liable to a caution.
While I appreciate the shadow Minister’s intention in seeking to alter the penalty regime for first time offenders, amendment 84 is not appropriate. We do not want to create a penalty regime for the offence of smoking in a smoke free place that has the potential to be stricter for first time offenders than for repeat offenders. This amendment would see first time offenders face a maximum fine of £1,000 on conviction, while repeat offenders would face a maximum fine of £200 on conviction in England. That is not consistent with our approach to the enforcement of tobacco and vape legislation, where enforcement action can be escalated such that repeat offences may lead to harsher penalties. For example, repeated age of sale offences can result in a restricted premises order.
We also do not want to weaken the existing penalty regime for tobacco and vape offences, including the offence of failing to prevent smoking in a smoke free place, by creating exceptions for first time offenders. Tobacco and vape offences must be taken seriously, and it is important that existing consequences are not weakened for first time offenders or for anyone who has committed these offences. It is therefore not appropriate to lower the maximum possible fine that an offender who has failed to prevent smoking in a smoke free place for the first time may face. It is for those reasons that I ask the shadow Minister to withdraw her amendment.
I am grateful to the Minister for outlining his thoughts on the matter, and I do not want to see the Bill weakened in this regard. As such, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn. Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss the following: Clause 142 stand part.
Clauses 147 and 148 stand part.
Clause 153 stand part.
Clause 136 amends an existing power in the Health Act 2006, relating to the designation of additional smoke free places, to allow the Secretary of State to make regulations to any area that is a workplace or open to the public smoke free, which would include outdoor spaces. Private outdoor spaces are out of scope of the powers of this Bill. Clause 142 amends the Smoking, Health and Social Care (Scotland) Act 2005 to allow Scottish Ministers the same powers, and clause 153 amends the Smoking (Northern Ireland) Order 2006 to do the same for Northern Ireland. The power to designate additional smoke free places builds on existing provisions that made it illegal to smoke in an enclosed, or substantially enclosed, workplace or public place. For England, clause 136 does not replicate a test from the 2006 Act, so there no longer needs to be a “significant risk” that someone “would be exposed to significant quantities of smoke”
before an additional space can be designated smoke free. We have already debated that change at length.
The clause therefore allows us to expand current smoking restrictions more readily to outdoor places. That is essential because places such as children’s playgrounds may not meet the requirements of the previous test, but making those places smoke free in England would protect the most vulnerable. Passive second hand smoking, even outdoors, poses a risk to health. There is no safe level of exposure to smoke: if you can can smell cigarette smoke, you are inhaling it. That is particularly important to note for children, pregnant women and people with pre existing health conditions, including conditions that may not be readily visible to the smoker, such as asthma and heart disease.
In England, we are considering making the areas outside schools, children’s playgrounds and hospitals smoke free outdoor places. However, we consider that now may not be the right time to include outdoor hospitality settings—I have been very clear on that—or wider open spaces, such as beaches. Exactly which settings should become smoke free will be a matter for secondary legislation, and there is a statutory duty to consult before using that power. Wales already has broader powers to make additional areas smoke free. However, clause 147 adds a duty on Welsh Ministers to consult before making regulations on additional smoke free places and on smoke free vehicles. That brings Welsh legislation fully in line with the duty to consult that the Bill introduces for the rest of the United Kingdom.
Clause 148 amends the Public Health (Wales) Act 2017 to update the wording of an existing measure that grants the power to make exceptions to smoke free vehicle restrictions. It adds that that power may be sub delegated to, for example, the person in charge of a smoke free place to allow them to create smoking areas. The power to create exemptions is an existing power that is being brought in line with the drafting of similar exceptions in this Bill.
The clauses mean that the devolved Governments will have equivalent powers to make additional smoke free places. I therefore commend the clauses to the Committee.
I thank the Minister for setting out what the clauses do, which is, essentially, to provide for smoke free places in England.
Clause 136 introduces changes to the Health Act 2006, and specifically updates provisions regarding smoke free places in England to allow for the addition of smoke free areas beyond those already designated under existing law. It empowers the Secretary of State to extend smoke free regulations to more places—and, I would argue, to essentially any place—with the aim of reducing exposure to second hand smoke and promoting public health.
Although it clearly is the Government’s intention to use these powers to improve public health, they are very wide ranging. As far as I can see, the clauses give the Secretary of State carte blanche to extend the smoke free legislation to any place without needing a reason, because the Government did not accept our amendment that it should only apply to places that have a significant risk of actually having any smoke. I understand that the measures allow for greater flexibility, but I would be interested in the Minister’s reasons for the wide ranging scope.
The Minister has said that he wants to focus on three areas: hospitals, children’s playgrounds and educational settings, and I believe that that is his intention. Unfortunately, over time, that may not be the intention of the rest of his Government, which is a risk for the Committee in allowing these measures to stand.
The Welsh have banned smoking on hospital sites. We heard in our evidence that compliance regarding playgrounds has been very good but that compliance around hospitals has been relatively poor. Does the Minister have any figures to add to that evidence about compliance in Wales? That could be the number of people who have been prosecuted or convicted of such an offence, or surveys from hospital trust leaders on the prevalence in their site, accepting that not all people will necessarily be caught or prosecuted. If we are to be successful, it is not simply enough to write laws in Westminster; there has to be a practical application in the real world. Has the Minister had any conversations with his Welsh counterparts on the perceived reasons why the law on hospitals in Wales has been followed less well than it has been in other areas, so that we can understand why?
The Bill states in proposed new section 4(2) of the Health Act 2006—this is interesting terminology—that if “the place is used as a place of work or open to the public only some of the time the regulations must provide for it to be smoke free only when so used.”
That means that if a place is used for the public only some of the time, it can only be a smoke free place during the time that it is in use. That could lead to a whole queue of people standing outside a hospital. If it were, say, a community diagnostic centre, so it is not open around the clock, or a GP practice, we could have people smoking outside just as people arrive for work in the morning and as the first patients arrive, which would be somewhat counterproductive to the aims of the Bill.
I wonder whether the word “must” would be better off as “should” or “could”, or perhaps we could allow leeway either side for hospitals or schools that are open from a set time. If a school opens at 8.45 am for the children to arrive, when is it officially open and when can people be expected to stop smoking outside it? It seems to me that the risk for children is that people are smoking as they arrive at school, and some children may arrive just before it opens. I remember standing outside the school with my son, waiting for the doors to open before I went to work. This particular question is important. It is sensible that if somewhere is closed and private most of the time, it would not have to be smoke free except when it is open. However, some thought needs to be given to the detail of that and how it would apply in practice to places that are insufficiently open.
The regulations can also be tailored to different situations. The Bill states that the smoke free designations can be applied to certain “places or vehicles”, in specific circumstances at particular times or if certain conditions are met. That flexibility ensures that the regulations can address a variety of scenarios and settings, including potentially temporary or conditional restrictions based on factors such as the type of location or event. The regulations also have the option to include exceptions, such as allowing areas within designated smoke free places to be designated as non smoke free, based on the discretion of the person responsible for the area. That would potentially undermine the principle of the Bill, so I would be interested to hear more about that.
Before implementing any new regulations to designate additional smoke free places, the Secretary of State “must consult” relevant individuals or groups, which again seems sensible. I would appreciate clarification from the Minister on the definition outlined in proposed new section (4)(1), which allows the Secretary of State to designate “any place in England” as smoke free if it meets the criteria of being “a workplace” or “open to the public”. But “any place” is very broad and could be interpreted to include beaches or open air public festivals. Does the Minister intend to include other places open to the public within the remit of this legislation, such as public woodlands or national parks? Has he spoken to his counterparts in Scotland about the areas that are subject to the right to roam, and therefore open to the public to some extent? That includes, for example, public footpaths and rights of way through farmland. Could the very remotest piece of land in the United Kingdom be designated smoke free and subject to legal repercussions thereof, if it were also open to the public?
I want to ask whether the enforcement of such broad measures would be feasible. If every public space, regardless of size, location or usage, was subject to a smoking ban, would it be realistic for local authorities or enforcement officers to monitor compliance across such vast and varied spaces?
In the modern day and with the change in working practices since covid, what counts as a workplace? In the age of working from home, can private homes count as workplaces? If a man sits down with his computer to work on a park bench, as is sometimes done, is that a workplace? If someone is working in an open area on the beach—we have heard that some people apparently do—does that make it a workplace? Does that place alternate between being smoke free and non smoke free, depending on whether the man is typing away on his computer, or whether he is having a little break for a cup of tea?
Our hypothetical al fresco worker could be hashing out his latest policy report, but he could also be having a little break to play solitaire or chess. Would that count as working or slacking? Would that then be a workplace or not? Would the police officer attending the scene have to check that the man is working before issuing a fine to nearby smokers? I suppose playing computer chess could count as work if the man were a professional chess player—perhaps he is. How would the offending smoker or the police officer know what the person near them is doing?
These are somewhat colourful hypotheticals, but I hope I have demonstrated that the clause does throw up a great deal of colourful hypotheticals. For the sake of the Bill’s integrity, I would appreciate clarity from the Minister on the terms used in the clause.
Furthermore, I would appreciate clarification on how we designate the physical borders of a smoke free area. With three children, I have been to a fair number of playgrounds. Some playgrounds have physical barriers around them, often some sort of knee high fencing, making it easy to say where the physical borders of the playground are. But some do not—some are play areas within a park where there is no clear boundary between where the play equipment is and the rest of the park. Does that make the rest of the park a playground or not, and where would the edges be?
Given the seriousness of the offence and the significance of the penalties, the Government should ensure that reasonable steps are taken so that people know when they are violating the law. In this case, will physical markers need to be built around every smoke free area to ensure that smokers know exactly when they enter one? I can think of many village playgrounds local to me where there is no such marking. Has the Minister considered the cost of providing barriers or markings to ensure that people know where the boundary is?
The nature of second hand smoke throws up another issue. The Minister well knows that the smoker need not be physically present in the smoke free area for the effects of second hand smoke to be felt in one. How does the clause propose to seek to address that scenario? If a park is designated smoke free, and is or is not barriered, but someone is sat there smoking, watching her children play—she wants to be reasonably close to them so she can keep an eye on them, protect them and keep them safe—would she be violating the smoke free area if her cigarette smoke wafts beyond the bounds of the park? What if the wind blows the other way? Would that then be legal? Are the mother’s actions based entirely on which way the wind happens to blow?
The principle behind the clause is very sensible: smoking is dangerous, passive smoking is a danger to others, and people—particularly children—should not be forced to breathe in other people’s smoke. But the enforcement of this clause requires it to be made very clear what people should and should not do, and where they should and should not do it. I am not entirely sure that the clause is clear enough on that.
Like the shadow Minister, I agree with the essential thrust of clause 136, notwithstanding the amendments that I voted for earlier, but there is a clear problem with second hand smoke. We have seen in studies from Public Health England and the World Health Organisation that even brief exposure to second hand smoke can increase the risk of respiratory diseases, heart disease, and lung cancer—particularly among vulnerable populations such as children and the elderly, as the Minister outlined.
However, we have to understand that there are clearly differences in how much smoke could be inhaled, depending on the setting. Where air circulation dissipates smoke, such as outside, the risks are probably not as pronounced as they are indoors. Although I do not dispute—I do not think anyone does—the dangers of second hand smoke in enclosed spaces, the question remains whether outdoor areas such as parks and public squares should be subject to the same restrictions.
This debate is not simply about health, but about personal autonomy. Should the Government have the power to restrict what is essentially legal—smoking if someone was born before 1 January 2009 and vaping if someone is over the age of 18—in an open air environment? That addresses the concerns that I raised regarding the amendment tabled by the hon. Member for Dartford. There is, I am afraid to say, a real desire from some hon. Members of a certain political persuasion to interfere in private and legal activities just because they do not happen to like them. I do not happen to like them, either, but I think that we might be going too far in this area.
Also, we have to think about the principle of proportionality. If the risk of harm is significantly lower outdoors—the Minister might disagree, but I suggest that it is significantly lower outdoors—is a total ban justified, especially in the park area? Although I take at face value that all he wants to restrict is hospital settings, playgrounds and schools—I have a lot of sympathy for that and support those three areas of the ban—I am concerned that the wide nature of how the clause is written could easily extend to other areas that have been outlined, in terms of public spaces and the hospitality industry. We need a balance.
We will move on to the economic impacts of potentially banning outdoor vaping and smoking in pubs, cafés and restaurants. I know that the Minister says he does not want to do that yet, but I listened very carefully to his opening speech, and he said—I am sure we can read it back in Hansard at some point—that it “might not be” the correct time. That did not sound quite as convincing to me as saying that he is absolutely, 100%, categorically not going to introduce it now or any time soon. “Might not be” does not sound as emphatic as I would like. We have to be clear that the experience of the 2007 smoking ban showed that although many establishments did adapt successfully, others, particularly small independent businesses, struggled. We need to keep that in mind when discussing that issue.
There are practical issues as well, some of which have been outlined by the shadow Minister, relating to the way the clause is written. The first issue is around enforcement. Expanding smoke free zones requires local authorities and the police to monitor compliance, issue fines and ensure that the public understands the new regulations. We have to balance whether that is a realistic and useful way to use limited public resources. Unlike indoor bans, which are much easier to enforce, ensuring compliance in large outdoor spaces presents logistical difficulties. Some of that is about definitions, which I will come to, and some of it is about who precisely is responsible for enforcing the bans.
In the amendment that was tabled by the shadow Minister and then withdrawn, she sought to change some of the first offence fines for those who did not do enough to ensure that areas were smoke free. It is very easy to understand who is responsible for a hospital trust or a school, but who is responsible for open air spaces that are potentially “open to the public”, as in proposed new section 4(1)(b) of the 2006 Act? It is very difficult to understand who precisely would fall foul of the law with that open ended drafting of the clause. Would it be the local authority, for example, in the case of playgrounds? Would it be a park owner if it was owned by some kind of trust? Would it be the National Trust if it is an open space?
This is also about the definition of a number of things. The shadow Minister talks about what a workplace would be, but if people are volunteering within a private venue and are not technically working, would they be covered by the law? What does “open to the public” mean? We are all members of the public. If someone walks into my front garden, it is open to the public. Is that covered in the law? When one, two or three people are gathered, do they become members of the public rather than private individuals?
We need to understand what the Minister means by “open to the public”, because it is easy for a well intentioned rule—that I would, on its face, genuinely support—to have a vast number of loopholes for those who want to get around it and a vast number of potential areas where those who are emphatic in their disgust and opposition to smoking could overreach. That is the danger of the clause as drafted, which is why we in the Opposition sought to narrow it and make it more specific.
When the Minister is considering hospitals, or any of the three relevant areas, will he look to impose a blanket ban or a ban on specific places? For example, it would be relatively easy to include any property owned by an NHS trust or NHS Property Services, a GP surgery and so on, but it would be much harder to define what a playground is. What is the Minister’s definitional element of a playground or play area? The shadow Minister talked about the delineation of that, but even beyond that, is a swing a play area, or does it need more equipment? Does it have to be owned by a local authority, or could it be in, for example, a National Trust property, a stately home and so on? We need to understand where the balance lies.
So I think we need to understand the definitional terms. I accept that these sound like pernickety arguments, but if we are going to have a law that we want to be enforced properly, we need to ensure that we, the public and those who will have to abide by it, as well as those who will enforce it, understand the remit.
The clause presents opportunities and challenges. On the one hand, expanding smoke free zones aligns with the public health objectives that most of us in the Committee agree with, and it protects vulnerable populations. On the other hand, there are concerns about the lack of definitional clarity on a number of things, as well as concerns about personal freedoms, the economic impacts and potential effects on business and the enforcement difficulties. Those need to be acknowledged and addressed, hopefully by the Minister when he winds up.
I certainly do not think the hon. Gentleman is putting pernickety arguments, as he put it. They are important points. He and the shadow Minister are allowing me to provide clarification, hopefully, on some of the concerns, which I would argue are unfounded, and to clarify the extent to which the powers in the Bill would be used by Ministers in England. Of course, it is for my counterparts in Scotland, Wales and Northern Ireland to clarify at future stages how they would seek to use the powers that the Bill confers on them.
As we have discussed at length, the fact that the powers are so broad means that we can respond to evolving evidence at a later stage, particularly when there are clear harms to children and vulnerable people. It allows us then to get on and make the necessary changes. That is consistent with the Bill as a whole, which gives us the legal framework for tobacco control and measures on vapes.
The shadow Minister mentioned hospitals. She is right to point to the evidence we heard on the first day of Committee about compliance with the existing measures in Wales. Ministers in the Department of Health and Social Care are rightly concerned about that in England. We are engaging with counterparts in Wales to understand what worked, what did not work and how we can mitigate the things that are not working as well as they could be when we consult on the measures that we wish to introduce in England, should the Bill get Royal Assent.
The answers to that and other questions about what a children’s playground is and what areas around a hospital would apply are down to the details that will be presented for consultation when His Majesty’s Government advance the proposals on outdoor spaces in England. The right place for us to have that discussion is when I bring forward the consultation and say, “This is what the Government consider to be the scope of children’s playgrounds, the scope of outside a school and the scope of outside a hospital setting.” We can debate whether those are the right or wrong definitions. We can put it out to consultation. We can draw on the experiences of other parts of the United Kingdom that already have measures in place. We can then refine our proposals if need be and introduce the secondary legislation.
I totally agree that we need a consultation—that is the beauty of gauging the public interest—but the issue around smoking in public places, and particularly play yards, is about not just second hand smoke, but de normalising exposure to smoking. The less that our children see adults smoking, the less chance they will have of thinking it is normal and becoming addicted. We need a comprehensive package to bring in the future smoke free policy. We have evidence to show that the public, in the main, are in favour of a smoke free generation, and I am sure that they would police the ban around playgrounds when there are children there. If people are not meant to smoke there, the issue will be policed—possibly by the public.
My hon. Friend, who has done so much work in this area over such a long period of time, is absolutely right. I will come to some of the enforcement arguments. Our primary aim is to tackle passive second hand smoking, but it is important that smoking is not so obviously prevalent in areas where children are present —for example, around children’s playgrounds and outside schools. It is not just that the issue of second hand passive smoking is important—although it is—it is about the clear statement that smoking around children really should be something for the history books. That is why we have removed the public health test from the 2006 Act. Children’s playgrounds probably would not fall within the scope of that test, but it is a clear priority of the Government to remove the prevalence of smoking around children.
I thank the hon. Member for City of Durham for her excellent point; I agree entirely with her that we need to ensure that children are not exposed to cigarettes. Could the Minister clarify a couple of points on that basis? First, the edges of playgrounds have been difficult to define—when is the playground the park and when is the park the playground? If it is his intention that children do not see smoking and that that de normalises the behaviour, which seems a noble aim, would that mean that if someone was within sight of the playground, they would not be able to smoke? Secondly, lots of hospitality venues have playgrounds within them. In fact, one attraction of some pubs that people take children to is that the children will be entertained, while the food is being cooked, by a play area. Will those play areas within hospitality venues be covered by these measures?
I refer the shadow Minister to the answer I gave some moments ago. These are all matters of detail that will be subject to consultation. We will have the arguments as to the definition of a children’s play area—whether it includes children’s playgrounds in hospitality settings or whether it is just in relation to playgrounds in housing estates and parks—and how the edges are defined. These are all matters for consultation and detail, before we get to the secondary legislation.
I want to challenge some of what the hon. Member for Farnham and Bordon said. To be fair to him, he rightly agrees that second hand smoke is dangerous, but he makes the case that in outdoor settings it is potentially less dangerous than it is in enclosed settings. That was the view of the chief medical officer: clearly, if someone is indoors, in a constrained area, the prevalence of the toxicity that they are taking in as a second hand smoker is much greater than it is outdoors—but even outdoors, if someone can smell it, they are breathing it in and it poses a risk to their health. The chief medical officers were really clear on this point: there is no safe level of exposure to smoke. That is particularly important for children, pregnant women and people with pre existing health conditions such as asthma and heart disease, which may not be visible to the smoker.
A really interesting statistic that the English chief medical officer told the Committee was that at this moment in time, in January 2025, there are more people with clinical vulnerabilities in this country than there are smokers. That is really important when we talk about the balance of rights and responsibilities. The fact that there are now many more people with hidden clinical vulnerabilities than there are smokers shows, I think, where the balance needs to be.
The Minister is making a very powerful argument that smoking outside also poses a danger to the health of the nearby public. On that basis, if I were taking an older relative—with chronic obstructive pulmonary disease, perhaps—to a beer garden, I would be reluctant to sit outside in the summer in case someone sat down and smoked near her. Is the Minister not making an argument for including hospitality, on the basis that people who are outside in the beer garden are vulnerable to dangerous smoke?
People sitting in a beer garden where smoking is prevalent are breathing in second hand smoke, but as the chief medical officers reminded the Committee, there is a balance here, and the United Kingdom Government of which I am a member have decided that that balance is appropriate in order to protect the hospitality business. That is why Ministers—myself, the Secretary of State and the Prime Minister—have made it very clear that outdoor hospitality will not fall within the scope of the consultation that we intend to bring forward like the clappers. That is our view and it is what we will do. That is not to say that there is a risk that is mitigated for somebody sitting outside. There is a risk, and we cannot mitigate that risk, but it is the balance that the Government have come to. There have to be trade offs and, given the precarious nature of the hospitality business, we have decided that we will not consult to extend the outdoor smoking provisions to hospitality. I know that that disappoints the shadow Minister—it probably delights other Members on the Opposition Benches—but that is where this Government are.
The powers in the Bill allow for a change at some stage in the future, when it may well be that the balance has shifted and people no longer desire there to be smoking outdoors in hospitality settings. The hospitality trade may say, “This is such a minority pursuit that it is putting off good people from coming to my restaurant.”
Forgive me if I am incorrect, but the Minister is saying that businesses may make the decision that they do not want people to smoke on their premises. They already have that power now, so I am not sure what point he is making.
The point I am making is that industry collectively may come to Ministers and say, “You know what? This carve out that we’ve been given is no longer needed.” Ministers may well then come to the conclusion that, given that most of these hospitality businesses at some stage in the future are already imposing outdoor smoking bans because that is where their customer base is, we should bring the law into line with that and make it illegal. The provisions are written in the way that they are so that at some stage in the future, when things change, we can change the law, but right now, as I have said on umpteen occasions, we will consult on outside hospitals, outside schools and public children’s play areas, and that is it.
Can the Minister clarify a point? There seems to be a contradiction in my mind, but perhaps I have not understood him correctly. On the one hand, he is being very clear in stating that hospitality will not be included and that children’s play areas will—that seems very clear. Hospitality venues, however, do include children’s play areas. When I asked him about this before, he seemed to say that children’s play areas in hospitality would have to be part of the consultation. If children’s play areas within hospitality are included, then aspects of hospitality are included, are they not?
That is why it will be down to the consultation as to what precise details we will bring forward. It is not our intention to include hospitality settings, but the hon. Member has rightly raised that some pubs and restaurants have children’s playgrounds. As part of the consultation exercise, we will have to work out how a children’s play area is defined for the purposes of these measures, so that there is absolute clarity on what constitutes a children’s playground. These are not matters for now; they are matters for when Ministers seek to bring forward proposals. We will have that debate then.
I know the Minister is a man of his word. I ask him to be really clear on this, because he has talked about “some point in the future”. Some people’s “some point in the future” may be a very long way off, while others’ may not be such a long way off. Will he give a commitment that, while he is a Minister in the Department of Health and Social Care, he and his colleagues will not bring a consultation to include the hospitality industry?
Well, I hope that I will be a Minister for a very long time, both at the Department of Health and Social Care and with this public health brief, which I absolutely love. I will follow the evidence as and when it appears, but it is not my intention to bring forward changes any time soon. The reason that we are discussing changes now is that the last time that places were designated for a smoking ban was in 2006, and a lot of things have changed since that law came into force in 2007.
It may well be that, in a similar length of time into the future, things have changed sufficiently that the arguments we are having today on hospitality have become obsolete, and that the law needs to be brought into line with the facts on the ground. I hope that I can reassure the hon. Member for Farnham and Bordon—I am a man of my word—that it is not my intention, nor the intention of this Government to include the hospitality industry, but at some stage in the future, if things change, it may well be that Ministers do come back to the House on this. I cannot judge how long or short that time period may be, but I politely remind him and other Members of the length of time between 2006-07—when these issues were last being debated—and now, and hope that that gives him some reassurance.
The hon. Gentleman said that I have not been emphatic enough on beaches, woodlands, public parks, rights of way and public squares; these are all scenarios that are subject to consultation at some stage in the distant future. It is not our intention to cover these areas in England. I have been very clear about the three areas that we seek to extend smoke free places to.
I remain a bit confused. On the one hand, the Minister has been very clear: no consultation on hospitality areas. On the other, he has been clear that consultation will occur on play areas. Fair enough. He then said that play areas in hospitality will be discussed as part of the consultation. In that case, how can he be discussing play areas in hospitality but not be discussing hospitality? I am completely confused by that.
Maybe I was not clear enough for the shadow Minister. We are seeking to bring children’s play areas into the scope of the Bill, and, as we have said, we will consult on restricting smoking around children’s play areas. How we define children’s play areas will be a matter for the consultation.
The hon. Lady has rightly raised a reasonable point that some pubs and restaurants have children’s play areas within them. The Government will have to come to a view, in advance of any future consultation, as to whether that would be included in the definition of children’s play areas—but those are debates for the future, not for now.
We have been clear that smoking will still be permitted in outdoor settings for hospitality. It may well be that there is a smoking facility in the beer garden and it is smoke free around the children’s play area. That is a matter for a future consultation, but we are not going to bring outdoor hospitality settings into the scope of the smoke free consultation. If anybody is a smoker today and wishes to sit in a beer garden, and that licensed establishment allows smoking—a growing number of pubs and restaurants are already making their outdoor settings smoke free because that is where their customer base is—smoking will still be allowed. That will not be part of the scope of future consultation. I cannot be any clearer on that.
On the enforcement of the measures on outdoor spaces, I would first like to give a major plug to the great British public, because most of our constituents are entirely law abiding citizens, as my hon. Friend the Member for City of Durham said, so the policy does not need to be heavy handed. Most people will enforce it themselves and encourage those around them to be considerate of others.
The example is already there: since the indoor smoking ban was introduced in 2007, compliance with the law has been incredibly high. Having been a Member of Parliament for almost 20 years now, I am old enough to have been here during the debate on the Health Act 2006. I was almost banned from Denton Labour club because I was told I would close it down with the smoking ban. Incidentally, it is still open today, but the people there were certainly not happy.
During the passage of that legislation, we Members of Parliament were told that the measures would be entirely unenforceable, that people would ignore the law and that smoking indoors would continue—“What’s the point of legislating for things that aren’t enforceable?” Lo and behold, not only has there been incredibly high compliance, but it has been a huge success, in terms of both its enforceability and the massive public health benefits that have arisen from that legislation. The same will be true of the measures that we seek to introduce. I can see no reason why people who have accepted the law as it stands today, which was introduced in 2007, and in 2006 in Scotland, would not accept the law when it comes to this Bill.
The enforcement of any extension of smoke free places is expected to be undertaken by the same allocated teams in local authorities that currently enforce the existing smoke free legislation. This is typically the responsibility of environmental health teams in local authorities. Those who smoke in a smoke free place in England face a fine on conviction of up to £200, or a £50 on the spot fine. Existing penalties for smoking in smoke free places will apply to any extensions to smoke- free places introduced through regulations. With that, I commend the clause to the Committee.
Question put, That the clause stand part of the Bill.
26|0|9|2|The Committee divided:|Question accordingly agreed to.||0|0
Clause 136 ordered to stand part of the Bill.
Clause 137
Smoke Free Premisies: Recasting of Power to Exempt Performers
Question proposed, That the clause stand part of the Bill.
The clause relates to an existing regulation making power in the Health Act 2006 that allows for the Secretary of State to make regulations that permit performers in England to smoke during a performance. The exemption would enable the creation of defences to the offences of smoking in smoke free places and of failing to prevent smoking in a smoke free place. It would be available only where smoking is justified to preserve the artistic integrity of a performance.
The creative industry is a significant part of the UK economy, and we have to balance a range of priorities while protecting the most vulnerable and ensuring that businesses are not financially impacted. The Bill aims to protect those who are most vulnerable to second hand smoke, and we are of the view that the relative harm from the exemption is low. Without the exemption, it would not be possible for a film or TV show that is made in England to include an actor smoking, regardless of how of how integral that might be. The provision updates an existing power in the 2006 Act, so an exemption to allow performers to smoke during a performance is not new. I commend the clause to the Committee.
The Minister is right to say that the clause recasts an existing regulation making power in section 3(5) of the Health Act 2006, whereby the Secretary of State may make regulations that allow performers to smoke during a performance “if the artistic integrity of the performance makes it appropriate”, and is allowed, on that basis, to create a defence to the offences of smoking in a smoke free place and of failing to prevent smoking in a smoke free place.
The act of smoking in film, theatre and other forms of art can be a character defining gesture that speaks volumes about the person’s identity or emotional state, or about the period in history they represent—think of images of Clint Eastwood, John Wayne, Humphrey Bogart and James Dean. It can also establish the period in which a person lived. It was commonplace for virtually everyone to smoke in the 1940s and 1950s, and the smoke swirling around characters became as much a part of their onscreen presence as their dialogue or expressions. Although smoking in real life is certainly not cool, and comes with myriad negative health implications, its role in art and culture can deepen the portrayal of certain iconic figures and their stories.
The Minister says that the exemption has been part of law for a long time, and that it has worked. There are essentially two ways in which a performance can mimic smoking. The first is to have a fake cigarette, six of which can be bought on Amazon for less than a tenner. They look a bit like a cigarette and an actor can hold them, but they do not have any smoke coming from them. My understanding is that currently the most common prop cigarettes used by actors are cigarettes that contain no nicotine and no tobacco but some herbal items. They produce smoke but are less harmful than a cigarette because they do not contain tobacco, and less addictive because they do not contain nicotine.
The Bill provides for tobacco products to be banned for certain generations of people, and adds herbal smoking products to that ban. Could that inadvertently lead to individual actors and actresses smoking tobacco rather than the less harmful alternative, particularly if there is a price differential between the two? Has the Minister considered how the law will apply to actors and actresses who are born on or after 1 January 2009? Will there be an exemption from the other aspects of the Bill, either allowing them to buy the cigarettes themselves or allowing someone to give them cigarettes as a proxy sale, which would currently be banned under the first part of the Bill? At present, actors may be above the age of 18, but the Bill is intended to be future proof, so if we roll forwards 15 years or so, when younger actors will be banned from smoking and buying cigarette papers and the like, how does the Minister envisage it working in practice?
Freedom of expression is essential to the arts, but the laws and practices that protect and nurture free expression are often poorly understood by practitioners and those who enforce the law. The question is, then: what is a performer? Section 3(8) of the Health Act 2006 states that “performance” can include “the performance of a play, or a performance given in connection with the making of a film or television programme, and…if the regulations so provide, include a rehearsal.”
That seems a rather narrow definition of performance. Performance art can cross disciplines such as dance on the stage or on the street. If we go to the south bank, just opposite this House, we can see performers performing solo activities on the weekend. Contract law for those engaged in paid work offers some recognition and potential protection for performance related work, defines it and outlines the conditions of the performance—it is indeed the performer and not other members of the performance who are included.
To create another hypothetical situation, suppose there is an interactive performance in which the performer on stage requires mass audience participation for their act and suggests that the people in the crowd have to join in with them. Would the artistic integrity of the performance trump the laws that prohibit smoking? The line between performer and audience can be blurred, so if an audience member were invited up on the stage by the performer, would they be allowed to try a cigarette or vape? Proposed new section 7(3) of the Health Act 2006 does not suggest that the performance needs to take place on stage or even in the theatre; some occur outside hospitality venues, as we have discussed.
To give a colourful example, imagine there is a performance called “Smokers”, taking place in a pub in, say, Sleaford, in my constituency. It features performers smoking and chatting in a pub. It is quite an experimental, interactive performance, and the members of the audience —in other words, regular pubgoers—can take part in the performance and light up a cigarette themselves should they wish to. Technically, does this scenario not fall within the remit of the law? We have to bear in mind that the tobacco industry is creative in looking for loopholes. Smoking is required in order to preserve the artistic integrity of this alleged performance. Will the Minister provide clarification on this point? Although my examples may sound inventive, the tobacco industry does come up with inventive ways of circumventing the legislation.
My other point relates to performers who are born after 1 January 2009 smoking or vaping on stage. We need some clarity on that.
To follow on from what the shadow Minister said, the Minister said that performers who smoke during performances would not be a problem because the second hand passive smoking would not be big enough of an issue. But why can a cigarette be smoked as part of a performance, yet a cigar cannot be smoked once a year by a single person? Why is smoking allowed for this artistic purpose, yet it is not allowed for someone who would like to smoke a cigar recreationally?
This is an existing power, in the Health Act 2006, that we have retained in the Bill at the request of the creative industries in England. I reiterate what I said in opening the debate: the exemption will be available only where smoking is justified to preserve the artistic integrity of a particular performance, so smoking would not be allowed in the hypothetical situations we have heard about. The provision is intended solely to allow the artistic integrity of a performance to be retained.
The shadow Minister asked whether the provision would merely encourage actors to smoke tobacco. Of course, that is not the case. Herbal smoking products are covered under “smoke free” as well, so they are treated the same.
With respect to the Minister, the point was that they are treated the same. My understanding is that, because of the rules around tobacco, actors who are non smokers are more likely to use a non tobacco herbal product that does not contain nicotine. Given the Minister’s previous comments about tobacco being more harmful, why not make the exemption specific to products that do not contain tobacco and nicotine?
We are following the request of industry. This is an existing power in the 2006 Act and it is to be used only in the exceptional circumstances in which cigarettes or indeed herbal smoking products are appropriate for the authenticity of the performance. That is exactly what the law is now.
I agree with the shadow Minister that it is not cool to smoke. I may have mentioned in previous sittings that I have been successful in getting not one but four stories in LADbible. One of them made precisely the point that the shadow Minister made: that smoking is not cool and it is not glamorous. It is a dirty, stinking, horrible habit that kills two thirds of people who start it. That is why we are committed to a smoke free generation.
I suspect that this exemption for the creative industries, which is pre existing, may become obsolete at some point in the near future, not least because I would imagine that as more and more actors themselves are brought up smoke free as a consequence of the measures we are introducing, actors will eventually point blank refuse to smoke a cigarette, whether it adds creative authenticity or not.
As I have said, this is a follow on from an exemption that was previously granted in the Health Act 2006, which is why I seek the Committee’s permission to retain it in the Bill.
I understand that the Minister is saying this is what the industry is asking for and that it existed before. However, as a result of the change in regulations, people who act as if they are smokers in a video or film are currently able to smoke herbal cigarettes that are designed as prop cigarettes and do not contain tobacco or nicotine. Although it may not be terribly good for their health for them to do so, those cigarettes do not contain the tobacco that kills two thirds of its users, and they do not contain nicotine either. In providing the exemption for the creative industries, will the Minister at least consider providing an exemption for the least harmful version of what will appear to the audience as a cigarette and cigarette smoke, so that we can protect actors as much as possible?
I am open to taking that suggestion away and having a look it, but at this stage it is our intention merely to copy and paste the existing exemption that applies for the creative industries in England, which is what the clause does.
Question put and agreed to. Clause 137 accordingly ordered to stand part of the Bill. Clause 138 No smoking signs in England Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss clauses 143, 149 and 154 stand part.
Clause 138 relates to no smoking signs in England and amends section 6 of the Health Act 2006, setting out that whoever occupies or manages no smoking premises must ensure that the relevant no smoking signs are displayed in or near the premises—which is, of course, very sensible.
We talked earlier about the importance of people understanding what the law is and where they can and cannot smoke. The clause allows the Secretary of State to make regulations further to the no smoking signs. That is sensible for outdoor spaces, but does the Minister have information on how the regulations will define the size and edges of those spaces, and on the cost to industry and local councils of providing signage?
I thank the hon. Lady for that point. The exact requirements of the position of the signs for smoke free locations will be set out in regulations, but we will ensure that they are required to be in a prominent position near the smoke free place.
The other matters that the hon. Lady raises relate to questions that we will need to consult on and work through in regulation—for example, who will be required to provide the signs and whether it will be down to public bodies such as NHS trusts and local authorities. All the costs, including any requirements to put up signs and their exact locations, will be considered as part of any future impact assessment of the policy. I commend the clauses to the Committee.
Before I put the Question, it may help the Committee if I say that we may be expecting a Division in the House at about 4 pm.
Question put and agreed to. Clause 138 accordingly ordered to stand part of the Bill. Clause 139 Vape free places in England Question proposed, That the clause stand part of the Bill.
With this it will be convenient to consider clauses 144, 150 and 155 stand part.
The clauses will amend the Health Act 2006, the Smoking, Health and Social Care (Scotland) Act 2005, the Public Health (Wales) Act 2017 and the Smoking (Northern Ireland) Order 2006 by inserting new provisions relating to vape free places across the four nations. They will allow the Secretary of State in England, the Scottish Ministers in Scotland, the Welsh Ministers in Wales and the Department of Health in Northern Ireland to designate certain places and vehicles as vape free, but only where they are already smoke free. They also provide that appropriate signs must be displayed in or near the vape free locations, and they give the power to set requirements in respect of those signs.
Although vapes are less harmful than smoking, they are not harm free. There are legitimate concerns regarding the unknown long term harms of vaping. Vapes produce aerosol that exposes people to nicotine and potentially to other toxicants. This poses health risks to children and vulnerable people in particular, for example the risk of triggering an asthma attack. It is important and right that the Government act to protect more vulnerable groups from potential health harms.
Many businesses and enclosed public places already voluntarily have schemes in place to prohibit vape use in their premises. We want clearer legislative requirements so that it will be easier for the public to understand where vapes can be used and for enforcement agencies to enforce accordingly. The clauses will therefore give the relevant Ministers and the Department of Health in Northern Ireland powers to restrict the use of vapes in areas, but only those areas already designated as smoke free. Those could include spaces such as indoor pub areas, public libraries or buses.
In addition to making it an offence to vape in a vape free place, the clauses will place duties on persons who control or manage vape free places—that can include drivers of vape free vehicles—to ensure that their premises or vehicle remains vape free. In Scotland, the obligation is to not knowingly permit another to use a vape in a vape free place; in England, Wales and Northern Ireland the obligation is to cause someone who is vaping in a vape free place to stop using the vape. The difference in approach is a result of amending existing legislation in a devolved area, but the practical effect will be the same.
The clauses make provision to permit the use of a vape during a performance if the use is justified to preserve the artistic integrity of the performance. In Wales, Northern Ireland and Scotland, this takes the form of a defence to the offences of vaping in a vape free premises or failing to prevent vaping in a vape free premises. In England, the Secretary of State has the power to create equivalent defences.
The power to designate any spaces vape free will be subject to a full and open consultation, and the evidence for imposing any restrictions will be considered before regulating. I commend the clauses to the Committee.
This is an important clause that I am pleased to see, as I have campaigned against vaping in children for quite some time, as the Minister is aware. As the Minister says, if you can smell it, you are breathing it in. That is an obvious statement, but I have had people tell me that vapes do not give out any smoke and that it is therefore not possible for them to cause damage to anyone nearby. They may not give out smoke, but they certainly give out chemicals that are inhalable by anyone next to the person vaping. Otherwise, it would not be possible to smell the blueberry, or whatever flavour the person has chosen.
Key findings from studies on second hand vaping include those on nicotine exposure. E cigarettes emit nicotine in their vapour—in lower concentrations than cigarettes, to be fair, but they do emit it. The amount of second hand nicotine depends on the brand; nicotine emissions vary among products. One study found second hand exposure to nicotine from e cigarettes to be lower than that from tobacco smoke generally. Nevertheless, it exists, and it is still undesirable for people, particularly children, to be forced to inhale such a toxin. It is particularly harmful to pregnant women and those with cardiovascular conditions. The potential long term effects of such low level nicotine exposure are unclear.
Although e cigarettes do not release compounds such as carbon monoxide, as cigarettes do, they do emit other chemicals such as propylene glycol and vegetable glycerine, which have been associated with respiratory irritation. Certain volatile carbonyl compounds, such as formaldehyde, have been identified in cigarette vapour, which could pose health risks with long term exposure.
One of the persistent limitations with vaping is the lack of long term data on the health effects of second hand e cigarette vapour. Most researchers focus on the acute effects, but as e cigarettes are a relatively new product, certainly on a mass market scale, we still do not fully understand the potential long term health consequences of inhaling these vapours regularly, especially in confined spaces.
I would argue—it seems from the clause that the Minister agrees—that we need to be careful, particularly with our children. We do not want to addict a whole load of generations to this habit. We do not want others to experience second hand vapours. There have been cases of people dying of second hand smoking. As the Minister has said, we know that second hand vapour can cause asthma and other lung diseases.
Parliament itself has been a place where one experiences second hand vaping. I was pleased to see last year that Mr Speaker had put notices in the Tea Room and elsewhere around the House stating that there should be no vaping in public. We are due to vote shortly, as you said, Mr Pritchard; even during votes, I have gone into the ladies’ rest rooms, where we have a little seating and sofa area, and found female MPs vaping, including one member of the Cabinet. It is prevalent in all parts of society. We should not be exposed to such things in the workplace. Children, in particular, should not be exposed to such chemicals at all.
Clause 139 will amend the Health Act 2006 by inserting a new chapter, “Vape free places in England”, which will establish a framework for prohibiting the use of certain vapes in designated areas and in vehicles in England, ensuring that specific places remain vape free, much like the existing rules for the smoke free environment. Does the Minister intend there to be an overlap? Clearly it would be much simpler, both for enforcement and for understanding among the public, if there were a direct overlap with the incongruity between the smoke free and vape free environments. I know that some say that if we make places vape free we are encouraging people to smoke, but they cannot smoke there either, so that seems to be a false argument.
Proposed new section 8B of the 2006 Act will give the power to make regulations designating vehicles as vape free. It is constrained in that it can apply only to areas designated as smoke free under the Act, ensuring that vape free zones align with existing smoke free zones, which makes sense. Will that be future proof if those change over time?
My other question is about the places where people are expected to prevent vaping and enforce vape free areas. Anyone who has sat on public transport will have noticed that it is easy for irresponsible commuters to quickly puff a vape, even though the train or bus may be a vape free space. A cigarette is difficult to conceal easily in a pocket, because it must be put out first, but it is quite quick to have a puff on a vape and put it back in one’s pocket. Smoking a cigarette can take several minutes, whereas a vape can be used without gaining much attention, other than from the vapour being released into the environment.
I have not been in a nightclub for some time, but I understand from my staffers that it is commonplace to vape there. When a vaper is in a crowd, it is difficult for staff or security to tell which person is vaping. Even if the staff were alerted to vape smoke, the vaper would most likely have put it back into their pocket, making it virtually impossible to positively identify them. Can the Minister say more about the reasonable steps that he expects a nightclub or bar owner to take in order to prevent that?
We hope that most people will comply with the regulations. That is certainly what we found with the smoking regulations, but those are perhaps slightly less easy to get around than the vaping regulations will be. I would be grateful for the Minister’s comments on those points, but overall I welcome the measures. As I say, the Bill is a good public health measure.
I am afraid to say to Government Members and to the shadow Minister that I am going to break up the cosy consensus. I had lunch at the Institute of Economic Affairs, which has given me some classical liberal vibes. I know that that will warm the Minister’s heart.
Part 7 of the Bill will give the Secretary of State powers to designate smoke free places through secondary legislation; clause 139 will do the same for vape free places. I have a few concerns about that approach. First, it has the potential to force people who have already switched or are in the process of switching from cigarettes to vapes—or indeed to heated tobacco, which is the subject of the next clause—to use their devices in the same areas as smokers, which runs the risk of their moving back to cigarettes. There is a risk that the places designated for vaping will often be the places designated for smoking. We all agree that even though we do not want people to start vaping, we would rather that people vaped if they are on cigarettes. In my view, the clause will be detrimental to its own aims.
I appreciate that we do not agree on the point about vape free places, but the argument that they will make people smoke seems to be based on the premise that if someone cannot have a vape in their office, they will pick up a cigarette. They cannot pick up a cigarette in their office either. If, as has been suggested, there is congruity between smoking and vaping, how is it that a person who cannot smoke or vape in a place will then decide to smoke when they go outside to an area that is not designated as smoke free?
It is not that people are not going to vape. They will go outside to the designated vaping spot, which in the overwhelming majority of instances will be either the same place that is designated for smoking or immediately adjacent to it. If someone is a recent ex smoker or is trying to quit, effectively forcing them to vape in an area near cigarette smoke seems incredibly damaging to public health. I do not think that that is a particularly controversial statement.
Surely the alternative is asking people to vape elsewhere, although they would be exposing non vapers and non smokers—perhaps with clinical vulnerabilities, or perhaps children—to their vapes instead.
I will come on to the point about the relative effects of second hand vaping and of smoking, but I will make some progress first.
My second point, which I have made throughout our debates on the Bill, is that we are potentially conflating vapes with cigarettes in legislation, which will exacerbate the misinformation that such alternatives are equally harmful to cigarettes. That will further undermine the Government’s goal of helping smokers to quit. Indeed, Action on Smoking and Health found: “Half of all smokers…incorrectly believe vaping is more or equally as harmful as smoking…This is the highest ever proportion with this misconception across all waves of the survey and a significant increase on misperceptions found in 2023. Only one third of smokers understand vaping is less harmful than smoking.”
It seems to me that if we group vapes and cigarettes together and treat them in the same way, that misperception will only be exacerbated. That may further reduce the inclination of smokers to switch to vapes.
I concur. Cancer Research UK followed a similar argument in written evidence to the Committee: “It is important that any measures to restrict vaping do not exacerbate harm misperceptions, and do not deter or reduce accessibility of people who smoke from quitting with the use of e cigarettes.”
I put it on the record that I very much agree with my hon. Friend.
It is nice to have a fellow freedom fighter on the Committee—[Interruption.] I am trying to get the Minister to intervene.
My third point is one to which I think the Minister alluded earlier, but I ask him to repeat it in summing up. This part of the Bill will allow the Secretary of State to make decisions without really having the full approval of Parliament. The Minister has said that the Government will consult on the expansion of smoke free areas, but as I understand it from the drafting, it is not necessary for the Government to consult on expanding vape free and heated tobacco free spaces in the same way. I think he might have touched on that point in his remarks, but I would welcome his confirmation.
My fourth point relates to the intervention of my hon. Friend the Member for Sleaford and North Hykeham on second hand smoke. My understanding is that the rationale for smoke free places, as initially envisaged, was that the smoker is affected as a result of them having made an informed decision, but people nearby are affected who have not. That is the point of the smoke free place. Cancer Research UK, however, states that there is “no good evidence that second hand e cigarette vapour is harmful”.
Public Health England has also found: “Compared with cigarette smoke, heated tobacco products are likely to expose users and bystanders to lower levels of particulate matter and harmful and potentially harmful compounds.”
In my view, therefore, the point about second hand smoke does not make anywhere near the same kind of sense for heated tobacco products as it does with cigarettes.
Even the Bill’s impact assessment states: “There are currently no legal restrictions in the UK on where a person may vape. However, many businesses, venues, educational institutions, health service providers and public transport providers have voluntarily introduced their own rules preventing vape usage in these locations.”
We all recognise that that is the case. Given that the impact assessment also notes that “There is currently limited evidence of health harm from ‘passive vaping’.”
should it not continue to be for the proprietors of such venues to make their own decisions, based on the needs and desires of their customers? That is my position.
My hon. Friend always tempts me with his libertarian arguments. I am not quite with him on this Bill, but almost. Proposed new section 8B(2) of the Health Act 2006 says: “Only smoke free places may be designated as vape free.”
I understand that to mean that there will potentially be places that are smoke free but not necessarily vape free, and I wonder whether that gives him any solace. I am specifically interested in our discussion about introducing vapes in vending machines in mental health trusts. Does he think there is a case—perhaps the Minister will comment on this in his remarks—for vapes to be used as a smoking cessation tool in certain places where we cannot smoke a cigarette or use other tobacco based products?
My hon. Friend gets to the nub of the point that I am making. Vapes can be a tool to help the Government in their desire to create a smoke free generation, and this legislation could be counterproductive to that, by their own measures of success. Members—certainly those on the Opposition Benches—have to engage with not necessarily the law that is written but how it will be implemented in reality. Businesses are likely to respond to this legislation by just putting up a sticker on the smoking shelter that says it is the designated vaping place as well. That is the risk.
Although I disagree with my hon. Friend on the principle of vape free places, he is making a reasonable point about the enforcement and congruity with smoke free areas. If there is not congruity with smoke free areas, this legislation will be more difficult to enforce, because people will not know which is which and it will lead to more inadvertent errors. He also talks about the idea of vape free areas being less important because vaping is potentially less harmful, but we do not know that.
As my hon. Friend knows, I am not a doctor as she is, but I will repeat that Cancer Research UK said that there is “no good evidence that second hand e cigarette vapour is harmful”.
and Public Health England made a similar comment. I understand the point that the hon. Member for Worthing West has made a few times about the precautionary principle, but we could take that to any excess.
It is important to remember that the absence of evidence is not evidence of absence. Someone said to me a while ago that having a smoking section in a restaurant is a bit like having a peeing section in a swimming pool.
I am not sure there is a question there, but the hon. Member has put a smile on my face.
My final point is about the visibility of vaping, because I think the Minister should consider the wisdom of this clause by his own logic. Public Health England guidance says: “while smokefree law protects people from the harm of secondhand smoke, forcing smokers outdoors has increased public visibility of smoking, including to children and young people. Having a more enabling approach to vaping can mitigate this and help make smoking less of a social norm”.
Ensuring a differentiation between where people can vape or smoke might assist in encouraging smokers to switch to vaping, which would undoubtedly have a net positive public health benefit. In addition, allowing people to continue vaping indoors in places such as pubs, bars and nightclubs, which are age gated anyway, would reduce the visibility of vaping in public and keep it away from people who are under age. When it comes to protecting people who are under age from picking up vaping in the first place, I wholeheartedly agree with the Government and the shadow Minister.
Those are the five points I wanted to make. First, are we sure that we want to push vapers to vape in the same place as smokers when they might be trying to give up smoking? Secondly, do we really want to conflate vapes with cigarettes, which might undermine the Government’s goal to help smokers to switch? Thirdly, will the Minister commit to consulting on any expansion of vape free spaces, as he has for tobacco? Fourthly, the evidence is weak that second hand vaping is a problem, but that is effectively the rationale for smoke free places. Fifthly, is the Minister not concerned that he could be inadvertently putting vapes on show, particularly to young people, by forcing people out of age controlled spaces such as pubs?
I want to confine my remarks to proposed new section 8D—“Offence of failing to prevent vaping”. I assume that the provisions under section 8D are similar, if not exactly the same, as the ones that would apply to cigarettes and other tobacco based products. However, there is an issue: it is much easier to spot somebody smoking a tobacco based product than a vape based product. Tobacco has a distinctive smell. To be frank, the available products look like cigarettes, cigars and pipes, and we know what they look like, whereas the industry has got better at disguising vapes. Vapes do not have the distinctive smell of tobacco, although they have many flavours as we have discussed, and they do not necessarily look like a cigarette or a similar product.
I am interested in the Minister’s views on whether there will be a different defence threshold for failing to prevent vaping under proposed new section 8D. Subsection (4) says that a defence for a person charged with such an offence is “that they took reasonable steps to cause the person in question to stop using the vape”.
The question is: will there be a different threshold for those who are sanctioned under the Bill for a tobacco related offence versus a vape related offence? That brings us back to burdens on the hospitality industry, retailers and so on. If there is not a differential, again, we will be putting undue pressure on retailers or nightclub owners that we would not expect for tobacco offences. It would be helpful to get some clarity on that.
We have had a good discussion on the clause. I sincerely thank the shadow Minister for the leadership that she has shown over a good number of years on this issue. I am not just saying that because her boss, the shadow Secretary of State, the right hon. Member for Melton and Syston (Edward Argar), is in the Public Gallery, gazing his beady eye over the Conservative Benches to see what is happening—I am sure that is precisely what he is doing.
In all fairness to the shadow Minister, she has taken a consistent view on vaping, which in some regards goes beyond the scope of the Bill. I know that it frustrates her, and indeed perhaps one or two Members on my own Benches, that the scope of the Bill does not go as far as creating a nicotine free generation as well as a smoke free one. I put on record my thanks and appreciation to her for championing this issue over a good number of years. I know that is why she supports the clause, as she said, and perhaps secretly supports a number of the other clauses that she has abstained on in Divisions—probably to further wind up the hon. Member for Windsor.
On the clause, there is evidence that second hand exposure to vaping may worsen asthma in children and teenagers. There are also wider concerns about young people taking up vaping and becoming addicted to nicotine. To protect children and vulnerable groups, we are therefore taking powers to consider whether certain places, such as public transport, should be vape free as well as smoke free.
It is important that we consider exemptions for certain settings, particularly those with the intention of helping adult smokers to quit. I hope that that reassures the hon. Member for Farnham. That is an important aspect for us to consider, and it will be explored through consultation.
Just for those listening, I should say that I am the Member of Parliament for Farnham and Bordon. The people of Bordon will be very upset if they are not mentioned.
I am sure that that has been noted by Hansard.
I am sure it has. I was using shorthand, Mr Pritchard, and the wonderful people at Hansard will of course have the hon. Gentleman’s full title. Being the Member for Gorton and Denton, I know how important it is that we reference both Gorton and Denton, so I take the hon. Gentleman’s point.
Many public venues and spaces have already put in place their own policies on vaping. For example, many hospitals and public transport providers have banned vaping on their premises. Subject to consultation, the clause will merely make those bans official.
There is an emerging evidence base, and it is important that we continue to monitor it. That is why my Department, my officials and I, as the Minister for public health and prevention, are in regular contact with stakeholders. I have to tell the hon. Member for South Northamptonshire that that includes Cancer Research UK, which is a major stakeholder of the Bill. It is also important to put clearly on the record that it fully supports the measures in the Bill. I do not want anybody reading Hansard at subsequent stages, such as on Report or in the House of Lords, to be under the misapprehension that Cancer Research UK does not fully support the Bill, because it does.
Turning to the hon. Member for Windsor, I am not sure that I am going to take public health advice derived from a briefing from the office of idiotic economic arguments, otherwise known as the IEA. It is not clear whether the IEA gets funding from the tobacco and vaping industry, but I suspect that it does. Therefore, we have to take what it says with a large modicum of prejudice thrown in.
I think the Minister is teasing me ever so slightly. I just want to say that I did write what I said; it was not given to me by the IEA.
The hon. Gentleman obviously wrote it after being inspired by his wonderful dinner with members of the idiotic economic arguments committee. I only half jest and half pull his leg, because I will never forgive the IEA for crashing the country’s economy, but we are not here to talk about the last Conservative Government, under the leadership of Liz Truss.
I do have some sympathy with some of the points that the hon. Gentleman made. We agree—and I think it has already been established—that vaping is less harmful than smoking and can be an effective smoking cessation tool, so that is an area that we definitely want to get right. Clearly, we want to continue to ensure that adult smokers can use vapes as a quit aid, while protecting others from the risks of vaping. That is why only places that are smoke free can also become vape free. To avoid unintended consequences on adult smoking rates, which the hon. Gentleman has raised on a number of occasions, the scope and impact of any future restrictions will be carefully considered. We will design the regulations in a manner that does not result in greater smoking harm.
I want to politely educate the hon. Gentleman on the process of secondary legislation, as he is a new Member—I do not mean this disrespectfully. Every statutory instrument that comes before a Delegated Legislation Committee appears on the Order Paper for a subsequent day on the Floor of the House of Commons. Before the Adjournment debate and the House adjourns, and after whatever votes we have had on the business of the day, there is something called the remaining orders of the day, which is all the secondary legislation that has been approved in Delegated Legislation Committees.
Should a Member shout “Object”, that leads to a deferred Division of the whole House. When the hon. Gentleman goes through the No Lobby, gets his pink card and puts a “No” next to Government legislation, as I am sure he has done on umpteen occasions since 4 July, that is a vote of the whole House on a statutory instrument that has been passed by a Delegated Legislation Committee. On all the measures that we introduce through secondary legislation, he will have the opportunity —I am sure his Whip and the shadow Health Secretary are taking note—to shout “Object” and cause a deferred Division.
On the question of who will enforce vape free legislation, I accept that vaping is easier to conceal than smoking, and therefore it is much easier to enforce a prohibition on smoking in a designated area than to prevent someone from having a sly puff on a vape, but this policy is about ensuring consistency, notwithstanding the difficulties there will be in enforcing it. As we have argued before, the majority of the British public are law abiding citizens. This does not need to be a heavy handed policy. Most people will enforce it themselves, and they will encourage those around them to be considerate to others.
In England, enforcement of any extension of smoke- free or vape free places is expected to be undertaken by the same allocated teams within local authorities that currently enforce smoke free legislation. That is typically the responsibility of the environmental health teams within local authorities. As with smoking in a smoke free premise, someone found to be vaping in a vape free premise in England may be issued with a fine on conviction of up to £200, or an on the spot fine of £50.
In Scotland, enforcement of any extension of smoke free or vape free places is expected to be undertaken by local environmental health officers, which is the case now with existing smoke free places. As with smoking in smoke free places, those vaping in a vape free place in Scotland face a fine on conviction of up to £1,000, or a £50 on the spot fine.
In Wales, enforcement of any extension of smoke free or vape free places is expected to be undertaken by local authorities, which are responsible for enforcing existing smoke free legislation. The police are also authorised to enforce the smoke free requirements in relation to private cars carrying children. As with smoking in a smoke free place, those vaping in a vape free place in Wales face a fine on conviction of up to £200, or a £100 on the- spot fine.
In Northern Ireland, local councils are primarily responsible for enforcing the existing smoke free rules; we would expect that to extend to vape free places as well. As with smoking in a smoke free place, those vaping in a vape free place in Northern Ireland face a fine on conviction of up to £1,000, or a £50 on the spot fine.
We will consult on regulations before any vape free places are introduced. A new burdens assessment will be completed before the powers in the Bill come into force, to account for additional enforcement costs. I commend clause 139 to the Committee.
Question put, That the clause stand part of the Bill.
27|0|12|2|The Committee divided:|Question accordingly agreed to.||0|0
Clause 139 ordered to stand part of the Bill.
Clause 140
Heated tobacco free places in England
Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss clauses 145, 151 and 156 stand part.
The clauses will amend the Health Act 2006, the Smoking, Health and Social Care (Scotland) Act 2005, the Public Health (Wales) Act 2017 and the Smoking (Northern Ireland) Order 2006 by inserting new provisions relating to heated tobacco free places. They provide for the Secretary of State in England, Scottish Ministers, Welsh Ministers, and the Department of Health in Northern Ireland to designate certain places and vehicles as heated tobacco free, but only where they are already smoke free. They also require that appropriate signs must be displayed in or near the heated tobacco free place, and they give powers to set requirements in respect of those signs.
In addition to making it an offence to use a heated tobacco device in a heated tobacco free place, the clauses also place duties on persons who control or manage heated tobacco free places, which can include drivers of heated tobacco free vehicles, to ensure that their premises or vehicles remain heated tobacco free. In Scotland, the obligation is to not knowingly permit another to use a heated tobacco device in a heated tobacco free place; in England, Wales and Northern Ireland, the obligation is to cause someone who is using heated tobacco in a “free from” place to stop using the device. The difference in approach is a result of amending existing legislation in a devolved area, but the practical effect will be the same.
The provisions for England will also provide powers for the Secretary of State to create defences to permit the use of heated tobacco devices during a performance if that use is justified to preserve the artistic integrity of the performance.
There is no safe level of tobacco consumption. All tobacco products are harmful, including heated tobacco products. There is evidence from lab studies of the toxicity of heated tobacco. There are less harmful, tobacco free products that can support people to quit instead of using an alternative tobacco product. It is therefore important that heated tobacco products be included within the scope of the Bill.
We are considering making all currently smoke free indoor places heated tobacco free, and making outdoor spaces heated tobacco free. However, that is subject to consultation. There is a statutory duty to consult, as I have mentioned on umpteen occasions, before bringing forward regulations to designate any spaces heated tobacco free. I therefore commend the clause to the Committee.
Clause 140 and the associated provisions for the other parts of the United Kingdom provide powers for the Secretary of State to prohibit the use of heated tobacco products in England in places that are already smoke free. That will need to be enforced by people who may not be familiar with heated tobacco devices. Will the Minister comment on the training?
I have only once come across a heated tobacco device at a dinner at Westminster. I initially thought the gentleman was vaping at the table, but it turned out he was using a heated tobacco device, which I had a look at—I had never seen anything like it before. It may be all well and good in metropolitan London, where people may be more familiar with heated tobacco, but how will people who are not familiar with these devices and have perhaps never heard of them be expected to recognise them and know they are not legal?
Has the Minister any plans on how to educate the public on the presence of heated tobacco, what it is used for and what the devices look like, in order that the law can be enforced? How will he do so without providing an advert for it to people who are old enough to buy it—at least in the short term, until it becomes illegal?
Government Members will be glad to know that I do not intend to repeat my points from the previous clause. Like the shadow Minister, I am less familiar with heated tobacco products, but I suspect the arguments I made regarding clause 139 apply to clause 140.
I want to make two or three points specific to heated tobacco. As with vaping, designating smoke free areas as also being heated tobacco free is dangerous, as it forces consumers to use their less harmful products alongside smokers. The risk is to increase the chance of their moving back to cigarettes. I will quote Public Health England: “Compared with cigarette smoke, heated tobacco products are likely to expose users and bystanders to lower levels of particulate matter and harmful and potential harmful compounds.”
It is not clear to me that there is an effect on a bystander of someone using these devices. The Cochrane review cited an earlier review on heated tobacco products that concluded that users and bystanders were exposed to toxicants, “although at substantially lower levels than cigarettes”.
Perhaps the Minister could comment on the relative harms, but I am not convinced.
With the hon. Member’s libertarian view on freedoms, what does he think about the choice somebody has not to inhale carcinogens and other products? He is indicating that people who vape in areas where people do not smoke at all would force that choice on them.
I would not describe myself as libertarian; I would say I was arguing straightforward centre right classical liberal opinions, rather than libertarian ones, but we might differ on that. An arbitrary line must obviously be drawn. The same argument could be made about someone idling in a car and people on the street. There is obviously a difference between that and smoking, where we have drawn a line. I acknowledge that I know less about heated tobacco products but, from what I have read, the spill over effect from nearby users does not reach a threshold to merit state intervention—though I agree that that judgment is qualitative. That is the argument I am advancing. I again make the point to the Minister that heated tobacco, while a recent innovation, has been reported to be positively associated with success in quitting. We should therefore be careful and not treat it the same way as cigarettes in an effort to advance the aim of the Bill, which is to get more adult smokers to use this product and move away from smoking.
Like my hon. Friend, I am no expert in heated tobacco products, but is he suggesting that they can also be used as a smoking cessation tool? If that is the case, his argument bears some weight. Does he have any understanding of where in the spectrum of harms—from cigarettes and cigars at one end to not smoking at all at the other, with vapes placed at some point on that continuum—where heated tobacco would sit? Is it closer to traditional tobacco based products or to vape products? Is it an intermediary step, whereby someone who is trying to quit might move from smoking a cigarette or a cigar to heated tobacco, to vaping, and then eventually to quitting? Is that how he would see it?
That is effectively the argument I am advancing. In terms of the quantum of harm as a percentage of a cigarette, I do not know. As I understand it, even though we do not fully know yet the dangers of heated tobacco, it is similar to vaping in that we do not want anybody to take it up, but if someone smokes we would prefer them to use it as a cessation device. I understand that that is the way they are marketed.
indicated dissent.
The Minister is disagreeing, but he can combat that in his speech.
My understanding is that the industry, in the same way that it in the past marketed filters as a way of making things less harmful, when in actual fact the microplastics may have made them more harmful, may have advertised heated tobacco as a way of saying, “You’re not smoking it, so it’s not as bad for you.” It is not therefore a recommended quit aid, but a way for the industry to try to maintain its market.
My hon. Friend’s points have been noted for the record. From what I have read and seen in the representations to the Committee and more widely, heated tobacco seems to me to be similar to vaping, in the sense that we do not people to start it as a product, but it is less harmful than cigarettes, so we should try to facilitate a way for people to use those methods as cessation devices.
I will come to the shadow Minister’s point at the end, but first I want to nail the pernicious lie peddled by the tobacco industry that there is a tobacco product that is an adequate smoking cessation tool. There is no form of tobacco that is safe. That is why we are stopping the sale of tobacco in any form to anybody born on or after 1 January 2009. That is a clear aim and objective of the Bill.
I do not want to rehearse old arguments but, taking us back to the almost two day long debate we had on clause 1, I made it clear that we are effectively saying to the tobacco industry that as far as its market base is concerned in the United Kingdom—in England, Scotland, Wales and Northern Ireland—this is as good as it gets. There will be no other route to peddle this deadly, toxic ingredient called tobacco that, were Sir Walter Raleigh to bring it to these shores today, would be illegal. However, because we have a 500-year history, which the shadow Minister kindly researched and gave us chapter and verse on in the debate on clause 1, we know we are where we are as a consequence of the tobacco industry. We will heaven and earth, however, to make sure that there is no other route for the tobacco industry to grow its market share. The lie that heated tobacco is a smoking cessation tool is precisely that—a lie.
There are smoking cessation tools that we are championing that are tobacco free, which is why we have a differential between vapes and tobacco products in the Bill. We recognise that vaping has a value as a smoking cessation tool, but I will never, ever concede that another tobacco product is a smoking cessation tool.
Tobacco is uniquely harmful. It kills two thirds of its user base. It is a major cause of death and of cancer in this country to this day. Whether it is cigarettes, cigars or heated tobacco, tobacco is tobacco, and tobacco is dangerous. I will not concede to the hon. Member for Windsor on the tobacco industry’s lie that heated tobacco is a smoking cessation tool. He wants to switch on the conveyor belt, albeit slowly, but that conveyor belt is stopping—and stopping for good.
The shadow Minister raises an important point about how people will identify heated tobacco products if they are not aware what such products look like, in order for the measure to be self enforcing in the way that not smoking in smoke free places has largely been self enforced, and as we expect measures on vaping to be. I reassure her that when the measures in the Bill are enacted, there will be a comprehensive information campaign so people will be aware of what is restricted as a consequence of its measures. That should raise awareness of products such as heated tobacco without promoting them, as the hon. Member for Windsor would like, as a pseudo miraculous device for people to quit their addiction.
As I say, there is no safe level of tobacco consumption. For that reason, I commend the clause to the Committee.
Question put and agreed to. Clause 140 accordingly ordered to stand part of the Bill. Clause 141 Amendments consequential on sections 136 to 140 Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss the following: Schedule 17.
Clause 146 stand part.
Schedule 18.
Clause 152 stand part.
Schedule 19.
Clause 157 stand part.
Schedule 20.
Clause 141 is fairly self explanatory and links to schedule 17, which contains the amendments to other legislation consequential on clauses 136 to 140. I do not have any specific comments to make on it.
These clauses and schedules ensure that the definitions in existing legislation align with those used in the Bill, and that references are accurate and reflect any provisions inserted into or removed from the relevant Acts. I therefore commend the group to the Committee.
Question put and agreed to. Clause 141 accordingly ordered to stand part of the Bill. Schedule 17 agreed to. Clauses 142 to 146 ordered to stand part of the Bill. Schedule 18 agreed to. Clauses 147 to 152 ordered to stand part of the Bill. Schedule 19 agreed to. Clauses 153 to 157 ordered to stand part of the Bill. Schedule 20 agreed to. Clause 158 Power to prohibit vaping etc on ships Question proposed, That the clause stand part of the Bill.
Clause 158 relates to shipping. I think a question was raised earlier about why ships were specifically excluded. That is partly because ships are important enough to have their own specific, separate clause. Clause 158 amends section 85 of the Merchant Shipping Act 1995 and makes provision regarding safety regulations that are made under that Act to provide for vape free and heated tobacco free provision for ships and hovercraft, corresponding to provisions in the Health Act 2006.
As I mentioned in an early sitting of this Bill Committee—I am glad that the Minister enjoyed the history of tobacco—maritime history and tobacco are inextricably linked. The allure of tobacco in the new world enchanted European sailors and left an indelible mark on global commerce as well as on our culture. Famous sailors, both factual and fictional, were smokers, from Captain Cook—who came from a place very close to where I was born, Marton in Middlesbrough—to Ernest Shackleton, and from Popeye the sailor man to Captain Haddock in the Tintin books. Smoking was a fact of life—worryingly, even aboard wooden vessels.
For four centuries, seamen and passengers used cigarettes, pipes and matches, which were a significant cause of maritime fires and disasters. The earliest dated clay pipe comes from a ship that sank off Alderney in the Channel Islands, probably in November 1592. A sea captain wrote in Fraser’s Magazine for Town and Country in 1875, I think, a piece entitled “The Dangers of the Sea”. In it, he chastised the carelessness of merchant seamen. He said: “It is to be regretted that in all classes of merchant ships smoking below is an acknowledged custom. Jack lies on his dirty bed of straw with pipe in mouth, reading some old scrap of a newspaper, or the pages of a novel, and not unfrequently falls asleep with the burning embers beside him”, adding that the mystery is not why the ship in question was burned, “but why such accidents are not constantly occurring from this and other causes.”
Indeed, we talked earlier in Committee about the dangers of house fires from people falling asleep while smoking in bed.
More than eight decades later, in a 1957 booklet, the Ministry of Transport still blamed smoking more than any other reason for fires on board ships. It said: “Lighted cigarettes smoked surreptitiously are abandoned in combustible cargo and cause fires which smoulder unnoticed for days before bursting into flame. They are thrown away on deck where the wind catches them and blows them into an open port, hatch, or ventilator where they may land on inflammable material. They are left on the edges of ashtrays in the saloon or dropped from men’s hands as they fall asleep.”
With reports like that, it is no wonder that smoking was eventually banned in the maritime context.
Ordered, That the debate be now adjourned.—(Taiwo Owatemi.)
Adjourned till Thursday 30 January at half past Eleven o’clock.
Written evidence reported to the House
TVB74 Asthma + Lung UK (supplementary)
TVB75 We Vape consumer advocacy group
TVB76 Cheshire and Merseyside Public Health Collaborative (Champs)
The Committee consisted of the following Members:
Chairs: † Peter Dowd, Clive Efford, Sir Roger Gale, Carolyn Harris, Esther McVey
† Abbott, Jack (Ipswich) (Lab/Co op)
† Atkinson, Lewis (Sunderland Central) (Lab)
† Campbell, Juliet (Broxtowe) (Lab)
† Charalambous, Bambos (Southgate and Wood Green) (Lab)
† Francis, Daniel (Bexleyheath and Crayford) (Lab)
† Gordon, Tom (Harrogate and Knaresborough) (LD)
† Green, Sarah (Chesham and Amersham) (LD)
† Hopkins, Rachel (Luton South and South Bedfordshire) (Lab)
† Joseph, Sojan (Ashford) (Lab)
† Kinnock, Stephen (Minister for Care)
† Kruger, Danny (East Wiltshire) (Con)
† Leadbeater, Kim (Spen Valley) (Lab)
† Malthouse, Kit (North West Hampshire) (Con)
† Olney, Sarah (Richmond Park) (LD)
† Opher, Dr Simon (Stroud) (Lab)
† Paul, Rebecca (Reigate) (Con)
† Richards, Jake (Rother Valley) (Lab)
† Sackman, Sarah (Minister of State, Ministry of Justice)
† Saville Roberts, Liz (Dwyfor Meirionnydd) (PC)
† Shah, Naz (Bradford West) (Lab)
† Shastri Hurst, Dr Neil (Solihull West and Shirley) (Con)
† Tidball, Dr Marie (Penistone and Stocksbridge) (Lab)
† Woodcock, Sean (Banbury) (Lab)
Lynn Gardner, Lucinda Maer, Jonathan Whiffing, Committee Clerks
† attended the Committee
Witnesses
Dr Rachel Clarke, palliative care doctor
Dr Sam Ahmedzai, emeritus professor, University of Sheffield
James Sanderson, CEO, Sue Ryder
Dr Sarah Cox, president, Association for Palliative Medicine
Sir Max Hill KC
Alex Ruck Keene KC (hon), barrister specialising in mental capacity
Sir Nicholas Mostyn
Dr Ryan Spielvogel, senior medical director for aid in dying services, chief of the family medicine department and programme director of the family medicine residency programme, Sutter Health, California
Dr Jessica Kaan, medical director, End of Life Washington
Public Bill Committee
Tuesday 28 January 2025
(Afternoon)
[Peter Dowd in the Chair]
Terminally Ill Adults (End of Life) Bill
Examination of Witnesses
Dr Rachel Clarke, Dr Sam Ahmedzai, James Sanderson and Dr Sarah Cox gave evidence.
Q
Dr Clarke: I am Dr Rachel Clarke. I am a hospital palliative care doctor with a decade practising in a whole range of settings: the community, hospices, small district general hospitals and a large teaching hospital. I am also a former journalist and a current author who has written four best selling books for the public about medicine in the UK. I campaign very actively for greater awareness amongst the public around the topic of death and dying. I have extensive experience teaching communication skills to medical students, junior doctors, nurses and other members of multidisciplinary teams. My personal view on assisted dying is that I am not opposed in principle, but I have significant concerns around the issues of consent and capacity.
James Sanderson: Good afternoon. My name is James Sanderson. I am the chief executive of Sue Ryder, a leading palliative and end of life care organisation, which also supports people living with grief and bereavement. I have recently joined Sue Ryder and have been there for six months. I was previously in NHS England as director of community health services, personalised care and palliative and end of life care. I am also the former chief executive of the Independent Living Fund.
Sue Ryder, as an organisation, has adopted a neutral position in regard to the assisted dying Bill. I am here today to provide information regarding the provision of palliative and end of life care and some of our concerns in relation to how the system is currently operating across the country.
Dr Cox: I am Sarah Cox. I am a consultant in palliative medicine. I have been in palliative care for over 30 years. I am also the president of the Association for Palliative Medicine of Great Britain and Ireland. It is a member organisation with over 1,400 members. Naturally, there are different views amongst our membership, but in polls over the last 10 years, the results show that about 80% of our members are opposed to the legalisation of assisted dying and about 5% are in favour. The reason for this opposition are many, but include the inadequate current provision of palliative care, which does not offer patients a choice, concerns about how the safeguards would be enacted in this Bill, and concerns about the impact of assisted dying on palliative care resources, funding and the workforce.
Dr Ahmedzai: Thank you very much for inviting me here today. My name is Sam Ahmedzai. I am a retired professor—a professor emeritus—of palliative medicine from the University of Sheffield. I have—not boasting, Sarah—39 years of experience in the speciality. I was one of the people involved in setting up the new speciality of palliative medicine back in the 1980s. My experience is of working in a hospice for nine years, and then 20 years as a consultant and professor at the University of Sheffield.
I am a clinical academic, so I very much take an evidence based view of healthcare, and palliative care is just another kind of healthcare. For instance, I chaired the National Institute for Health and Care Excellence guidance on the last days of life. I was also clinical adviser to the NICE guidance NG142 on service delivery in the last year of life. I come from that background. I have experience of lecturing and working around the world as a visiting academic. For 10 years, I was the visiting Spinoza professor at the University of Amsterdam, where I lectured people who were delivering euthanasia in Amsterdam about what they could do through palliative medicine as well. That is where I am coming from. I am a supporter of changing the law, and I commend the Bill. It is the safest I have seen in the world.
Members should indicate if they wish to ask a question and who they wish to ask.
Q
James Sanderson: There are clearly gaps in the provision of palliative care. However, to start with a positive, I think that the provision of palliative care in this country is exceptional. We are leaders in many ways across the world in the way in which we support people who are facing those challenges in their lives. However, our findings in relation to palliative care show that, although about 90% of the population could benefit from palliative care, only 50% of people are currently able to access it.
One of our concerns is that the provision of palliative care across the country is quite patchy at the moment. I do not think there has been a thorough assessment of the level of palliative care in place—not just the provision of palliative care specifically, but how other services, such as district nursing services, interact with palliative care. In some areas, the provision of district nursing services for general care and support for people who may be at the end of their life is very strong and in other areas it is not so strong.
At Sue Ryder, there is one thing that we are really concerned about. In our survey, 77% of respondents said that they were concerned that the lack of availability of palliative care might enable more people to consider an assisted death than otherwise would. That concern went up to 84% for those who were in favour of assisted dying. We really need to look at the provision of palliative care and the specifics in the Bill that make reference to the fact that people should be offered what is available to them. We need to have a much clearer definition of what “available” means.
Q
The state of Oregon carried out a survey of people who died under its assisted dying scheme in 2023. Its report stated that 43% of those who chose to die said they did so because they felt they were, and I quote directly from the term used in the survey, a “Burden on family, friends/caregivers”.
Is that something you are prepared to see happen in the UK?
Dr Ahmedzai: It goes absolutely to the core of being British—we are always saying sorry, aren’t we? We apologise for everything. In everything we do, or everything we might do, we think we might be treading on toes and are always worried about being an imposition. All my professional life, I have come across patients and families in which there clearly is that feeling going on, usually with an older person or even a younger person who is drawing a lot on the emotional and physical resources of the family. It is natural that we feel a burden; it is impossible to take that out of human nature.
The issue is, does feeling that one is, or might become, a burden something that could influence a decision as major as looking for assisted dying? In that respect, I look to all those jurisdictions that have been offering assisted dying in different ways, and I have never seen a single case ever taken to the police or prosecuted. Evidence I have heard from other jurisdictions shows that, yes, it is possible—we all go through life feeling that we are a burden on someone—but it does not influence people in this particular decision. If anything, I am told that, in other jurisdictions, families are saying, “No, don’t do it.” They are exerting negative coercion—“don’t do it” coercion—but people are saying, “No. It’s my life. I’ve made my mind up.” They have mental capacity, and we respect that.
Q
Dr Clarke: Based on my clinical experience, I would push back on that in the strongest terms. I am the kind of doctor who believes there is nothing to be gained from sugar coating reality. We have to be absolutely honest with patients and the public about shortcomings, failings and areas where my profession and the rest of the NHS are getting things wrong.
It is my clinical experience that not only are the majority of doctors not necessarily trained in spotting coercion explicitly, but they are often not trained explicitly in having so called advance care planning conversations with patients around the topic of death and dying, and how a patient would like the end of their life to proceed. It is almost impossible for me to overstate how much avoidable suffering occurs right now in the NHS not because of a lack of resources for palliative care—although that is an enormous problem—but because of a lack of confidence, skill and expertise among the medical profession writ large with these very difficult conversations.
We are all familiar with the idea of death and dying being a taboo in society. People are scared of it, and they hesitate to bring it up with their friends and family. In my experience, many medical students and doctors also suffer from that anxiety. They are scared, and they find it a taboo subject. What that means is that sometimes coercion occurs because the doctor—the consultant responsible for this person’s care—will not even bring up the fact that they think the patient is dying, because it is an uncomfortable conversation. Conversely, I have worked with senior hospital consultants in the NHS who have deliberately prevented our team from accessing their patients, because they believe that the hospital palliative care team wants to kill the patients, and that if I go and see the patient, I will give them a lethal dose of drugs.
These are the kinds of extraordinary misunderstandings and failures to prioritise patient autonomy that are happening now. That is even before we get started on conversations around whether someone would like to consider assisted dying, so it is a huge problem.
Q
Dr Ahmedzai: I have visited many of the jurisdictions around the world—such as Oregon, where I met the original judge who brought in the law, as well as the doctors, nurses and patients involved—and it was clear to me that if patients had not accessed palliative care, they were pointed towards it. Obviously, you cannot force anybody to go and have palliative care, but they were certainly informed about it.
In the Netherlands, I commend a system for doctors called SCEN—support and consultation on euthanasia in the Netherlands. These are trained doctors working for the equivalent of the BMA, I believe, who, as Dr Clarke has referred to, are going and supporting doctors who are not familiar with things. They often come from a background of palliative care and pain medicine, so they are making options available that other doctors in the process, for instance, have not brought up. In Australia, there is clear evidence that palliative care is becoming more available.
The European Association for Palliative Care produced a report more than 10 years ago in which it examined all the countries in Europe at the time, and it found there was evidence that palliative care was improving in scope and availability alongside the forms of assisted dying that were happening there. I am reassured that bringing in some form of assisted dying, particularly the form proposed here, would be a boost to palliative care.
One of the things I would like to see is that anybody who is involved in the process is constantly asking the patient, “What about palliative care? Have you actually accessed it?” Right now, if they have not raised their hand and asked for assisted dying, no one has that conversation with them. They are in a vacuum and a bubble, and not receiving palliative care, whereas this provision would possibly make it more available.
I have two follow up questions on that basis.
Order. I do not want to squash any discussion, but I ask Members and the panel to bear in mind that we have until 3.15 pm for this session. I will be as lenient as I can with questions.
Q
Dr Ahmedzai: In the interests of brevity, yes.
Q
to raise assisted dying. You also said that raising the topic did not have adverse effects. How could clause 4 be strengthened to ensure that patients are presented with a range of treatment options at the end of life and relay any concerns that others have raised about suggestibility where this is mentioned in isolation?
Dr Ahmedzai: That is a complicated question. The first point is that right now, as Dr Clarke pointed out, it is scary to patients to be told that they may actually be receiving palliative care. When it has been mentioned—by an oncologist, for example—many patients say, “I do not want that. Don’t let them come anywhere near me or anywhere near my relatives.” It is not unusual that people may have an adverse reaction to just hearing about the service, but here the difference is that the person has actually asked for it.
I personally believe that it would be advantageous if there was formal training, as Dr Clarke has mentioned, specifically to have the kinds of conversations that we now talk about, such as about psychological issues and suicidal tendencies. It used to be thought that if you mentioned suicide to somebody, it would give them the idea, but of course it does not; it saves them, because they say, “Thank you. Yes, I was having those thoughts.” Bringing up assisted dying is never going to be harmful to the person, even if they had not thought of it. They will just say, “Well, it is not for me.”
That is very helpful; thank you.
Q
Dr Cox: Professor Ahmedzai has talked about the evidence, which was written up to 10 years ago. There is actually more recent evidence, looking at the last 10 years, where European countries and American states have been assessed in terms of the development of palliative care services. That more recent evidence shows that although palliative care services have improved in those countries where assisted dying has been implemented, they have improved three times more in countries where assisted dying has not been implemented. The evidence from that study shows that the implementation of assisted dying is impeding the development of palliative care services.
The other thing we are really concerned about is the impact on funding. It is unclear how this is going to be funded. It looks as if it is going to be within healthcare, and if so, there will inevitably be competition with other aspects of healthcare, including palliative care, for those limited resources. There are finite numbers of doctors, nurses and side rooms in hospitals. If palliative care and assisted dying were funded from the same pot, I think there would be a massive detrimental effect on palliative care because we would be in competition for a limited resource.
I am also concerned about our palliative care workforce, which we know is already in crisis. Eighty three per cent. of our members told the Royal College of Physicians in 2023 that they had staffing gaps, and more than 50% were unable to take leave because of those staffing gaps. Forty three per cent. said that if assisted dying were implemented within their organisation, they would have to leave. This has a massive impact on palliative care, in terms of its potential to develop both our funding and our workforce, who are really concerned about this.
Q
Dr Cox: The first thing to say is that palliative care is currently inadequate. Not only do we need to ensure that it does not decline, but we need to massively improve it so that this Bill offers patients a real choice. We know that effective palliative care can change a terminally ill person’s point of view from wanting to die to wanting to live.
We also know that 25% of people who die in this country do not have the palliative care they need. That is more than 100,000 people a year. Providing palliative care, which might make their lives better, reduce their suffering and even change their perspective on whether they would want assisted dying, should be our priority in reducing suffering in this group.
I do not know how we prevent this from happening. Making sure that palliative care has separate funding is important, because assisted dying and palliative care need to be separate in how they are delivered and in how they are funded.
Q
Dr Clarke: The fundamental principle is always that, by default, the patient has capacity unless there is clear evidence that they do not. We presume that patients have capacity. As doctors, we are obliged to ensure that patients have informed consent when deciding between different treatments. That means we need to lay out the whole array of treatment options, and the risks and benefits of each, to empower individual patients to make decisions for themselves.
Regarding the issue that has been alluded to of whether doctors should be prohibited from raising the issue of assisted dying, it is my belief that that would fundamentally alter the doctor patient relationship. If consent is not informed—and it is not informed if we are not laying out all the different options to a patient—we are denying patients the opportunity to make decisions for themselves. A patient is always able to refuse every treatment, and in particular every life prolonging treatment, that they choose to, provided they have capacity. We, as doctors, may think that a decision is unwise, but that is irrelevant, because those days of bad old paternalistic medicine are gone. The patient makes the choice. If a patient says, “I do not want chemotherapy. I do not want to eat. I do not want anything at all—no treatment”, we respect that, unless they lack capacity.
The elephant in the room with all of this is the capacity assessments. I would suggest that anybody who pretends that those assessments are easy and routinely done well in the NHS has not got enough experience of observing that happening. I teach capacity assessments to doctors and medical students, and it is often the case that they are very poorly conducted. The doctor often does not understand the criteria for assessing capacity. That is if it happens at all. Sometimes, a paternalistic doctor will decide that a patient is dying, and we should stop their antibiotics because they are clearly now at the end of their life. They have a chat with the family, who say, “Yes, we agree,” and nobody talks to 82-year old Mrs. Smith and asks her what she feels about it, because they assume that she does not have capacity because she is old. I see that regularly. Sometimes, a palliative care team will intervene in those situations, because the professional and legal framework that is meant to guide this practice is just not happening. It is a very fraught and tricky area.
If there is one thing that I would say to the Committee regarding making the Bill as robust, strong and safe as possible, it is: please consider seriously the matter of education and training from day one of medical school onwards. Death is at the periphery of a medical school curriculum. Death and dying are not taught. You might get a week of palliative care in five years, and that has knock on effects all the way through, at every level of seniority in the medical workforce.
Q
Dr Clarke: Yes, I think that in the spirit of transparency and making this as safe as possible, it needs to be significantly strengthened. I would suggest that there need to be more safeguards in place. For example, if anyone in a hospital—whether staff, patient or family member—has concerns around a particular case, there should be mechanisms for those to be raised in a proactive way. Just as we have guardians of safe working and freedom to speak up guardians in hospitals, those opportunities to assess and appraise the safety in real time once a Bill is in place—I just do not think they are robust enough at all. The more we can have of that, the more that will allay people’s fears.
Q
Dr Ahmedzai: You have caught me on the hop, because I cannot quote the level of training that doctors have received elsewhere, except for examples in the Netherlands, where there are additional doctors who are, through their medical association, trained specifically in assisted dying. I cannot tell you the number of years’ experience that doctors have in other countries. I felt that it was self evident that you would want doctors who are experienced—three years, five years or whatever post qualification—and who have seen real life. It is up to the medical associations to stipulate how much experience, but I would not like the idea of a doctor immediately, having got their certificate of training, going off and making these kinds of decisions. That is why I suggested that ballpark figure.
Q
Dr Ahmedzai: Probably not, but this is a very, very special situation, and it may be, once it has become embedded in the health service, that that stipulation could move back.
I am so glad that Dr Clarke keeps coming back to training. One thing that is absolutely needed if this Bill goes forward is to take the topic of assisted dying out of being an optional training—where people might sign up for a course—to become mandatory. In the NHS, we do mandatory training for all sorts of things, including washing hands, lifting and basic life support. There should be basic dying support mandatory training as well. Why do we not have that? That kind of provision would become part of training doctors up to become good at those conversations that Dr Clarke is obviously involved in teaching, and in ensuring that they keep up to date with how the law is changing too. I would look to the royal colleges and the GMC to lead on those aspects.
Q
Dr Clarke: I absolutely agree that in a small number of cases, palliative care at the highest level cannot eradicate all suffering, and cannot prevent a person from wishing to end their life and have assistance in ending their life. That is absolutely the case; I would say that it happens surprisingly uncommonly, in my experience, but it does happen.
Autonomy is the crux of the issue for me, because autonomy is predicated on having meaningful choices. Can you actually choose option a or option b? Let us say that option a is high quality not just palliative care, but medical care in general—district nursing care or social care, for example. If that is not available to you, you are potentially being pushed towards “choosing” option b—the route of assisted dying—not freely and not autonomously, but because option a has been denied to you by real world failures. We all know about those real world conditions—we are all familiar with the latest winter crisis, where patients have been dying on trolleys in corridors, etc—that are preventing the actual option of a death in which dignity, comfort and even moments of joy can be maintained right up until the end of life, when that patient is getting the high quality palliative NHS and social care that they need.
That is the crux of the issue. If you do not have that as a real option for patients, we can say that they are choosing autonomously assisted dying, but actually society is coercing them into that so called choice because it is not funding the care that makes them feel as though life is worth living. That is why I think many of my colleagues are so concerned about legal change now. It is not because of an opposition to assisted dying in principle. It is because the real world conditions of the NHS today are such that people’s suffering means that occasionally they will beg me to end their life, and I know that that begging comes not from the cancer, for example, per se, but because they have been at home not getting any adequate pain relief. Once you start to provide proper palliative care, very often that changes.
Q
Dr Cox: I and my colleagues have concerns about the safeguards in the Bill. It is not just the capacity assessment; we also acknowledge that prognosis is incredibly difficult to assess accurately. I would say that you cannot always identify coercion. You can identify it when it is very obvious and extreme, but when it is very subtle, we cannot always identify it. After the event, there is nobody to tell us about coercion, so it is very difficult to monitor.
The other thing that concerns me is that we are putting all these assessments on the shoulders of two doctors individually, followed up by a High Court judge. In any other clinical practice, when we are making very serious decisions, we know that shared decisions are much better quality, much more robust and much safer. In clinical practice, we make all these decisions in multi professional teams. I would never make these decisions independently of my team, because the perspective they bring can help me to understand things that I am not seeing.
The thing that I am really concerned about is how it is possible for these doctors, even with training, to have a good understanding of all illnesses in order that they can identify prognosis—neurological, cancer and every other. How is it possible for them to really understand capacity when capacity is not an absolute; it does change and it is very complex to assess? How is it possible for them to see all cases of coercion, which can be invisible?
In addition to that, are those doctors going to be looking out for opportunities to refer to palliative care when they see somebody who has suffering that could be addressed and may change their mind? Are they looking out for untreated depression? We know that treatment of depression can result in people changing their minds about wanting to die. It is a lot to ask these individual doctors to do, and that really concerns me.
Q
Dr Cox: There are two differences that I would identify. The examples you give are of somebody who may be naturally dying and is being kept alive, so the difference is that you are withdrawing a treatment; you are not intentionally killing them. This is the first difference with assisted dying.
The second difference, I would say, is that you are absolutely right that we do make those decisions with patients—with their families, if they wish—but in a multi professional team. I would almost never make those decisions as an individual doctor without the support of my colleagues, for several reasons. First, as I have said already, that makes for much better decisions—they are safer and more robust. Secondly, the moral distress associated with these decisions is much less if you share them. That is also a worry for me—what happens to the moral distress of the co ordinating doctor and the other assessing doctor? They are carrying a lot of moral distress. My understanding is that a very small percentage of doctors will want to engage with this—maybe 1% or 2% of all doctors will want to be in those assessing positions. They are carrying a lot of that distress because they will be doing a lot of assessing.
Q
Dr Clarke: I think that is not quite right, and certainly not what I intended to convey. There are rules. There are very clear legal and professional rules and guidance and protocols around how to have these conversations. However, in practice, the quality of the conversations is contingent on the confidence, expertise, training and background of the individual clinicians having the conversations. There can be a great deal of inter doctor variability in how conversations are conducted. In terms of addressing that, I would suggest that in an assisted dying scenario the crucial thing is to make the guidance and training as robust as it possibly can be to reduce the inter practitioner variability.
Q
Dr Clarke: No, of course not.
Order. We have half an hour left. Nine people have asked questions and there are eight people left who want to. If we want to get through the questions by 3.15 pm, people will have to be self disciplined when they ask their questions.
To the panel, forgive me, but we need answers in as reasonable a time as possible given the circumstances. Dr Clarke, if you wish to answer the last point, feel free.
Dr Clarke: Of course we want as much autonomy for as many patients as possible. The issue is around safeguards. If, for instance, you say to a vulnerable patient who has just been told they have a diagnosis of terminal cancer, “Have you thought about assisted dying?”, I would suggest that stating it broadly like that is a form of pressure and that you are potentially unintentionally coercing that patient. The very act of raising assisted dying in that way will make that vulnerable patient think, “God, is this doctor telling me that my life is not worth living any more?” Autonomy is much more subtle and complicated than we assume from outside.
Q
In your opinion, who are the people who receive palliative, and who does do not?
My question to Dr Clarke is similar. You have talked about the population being “carved up into two groups…those who deserve to live and those are expendable”.
Could you expand on that quote and the two groups you referred to, as well as the impact that has on their treatment and care?
James Sanderson: You draw a really important point about not just the provision and totality of palliative care across the country but the inequity of access. Unfortunately, we find that the diversity of people who are accessing care in hospices across the country is less than those who are dying in hospital—43% of people currently die in hospital.
One of the things we really need to do is move to a new ecosystem of palliative care that looks at supporting people in different settings. We need specialist provision in hospices to support people with significant needs, but increasingly hospices are reaching out beyond their walls into the community, and 80% of Sue Ryder’s work is in people’s own homes. People tell us that they want to die at home, so supporting people in their own homes enables us to access more diverse communities and get to people in their own setting.
Increasingly, one of the things we feel is necessary is the provision of support inside hospital. Alongside wards, we would bring support to that 43% of people who are currently dying in hospital, to ensure there is equality of access in all places, both in in patient settings and in the community. You draw a really important point that we have to look at the totality of provision and ensure that, when someone is offered palliative care—the Bill talks about that provision being available—there is universal access, in terms of the type of palliative care available and the access for everybody in society.
Dr Clarke: My comment refers to the fact that there is an immense gulf between the theory of the NHS being a cradle to grave service—or a service that cares for us at the end of life as it does at the start—and the reality. The reality that I see every day at work in my hospital is patients coming into the emergency department from the community sometimes in utter, abject misery, in agony, with a lack of dignity. They have been forgotten completely. They are not getting healthcare or social care, and no one cares about them.
Even in the hospital, patients who have a terminal diagnosis are sometimes cast out into the corners of the hospital. There are hospitals, and mine is one currently, where we do not even have a 24/7 palliative care service face to face. Every night in my hospital, and every weekend from Friday to Monday, you cannot see a palliative care nurse or doctor, despite the fact that for a number of years that has been an NHS standard. That is an absolute disgrace and it shows how little people who are dying are truly cared for in a civilised society.
It does not necessarily have anything to do with assisted dying, except that if we do not address that simultaneously, some of those people will “choose” to end their life, because we as a society do not care about them enough to give them the care that might make life worth living. Surely that is a travesty for Britain.
Q
Dr Cox: My understanding of the plan is that in the Bill—forgive me, but I am sketchy on this—the aim is for the registration to be as a natural death. It would not be referred to the coroner, and “assisted dying” would appear on the death certificate.
I am also a medical examiner. My concern is that, as a medical examiner, I am obliged by law to scrutinise all deaths to ensure that a referral to the coroner is not required and to identify any learnings. What concerns me in that role is whether enough recording is happening around decision making and the process to do my job properly. With my medical examiner hat on, do I know what happened? I do not see anything written down in the Bill about the records that are to be kept. What happened when the patient took the substance? What happened afterwards? Were any actions taken in the meantime? That is not so much something I have thought about a lot with my palliative care consultant hat on, but as a medical examiner it concerns me.
Dr Clarke: For the sake of time, I do not have anything to add. I completely agree with that.
Q
Dr Cox: In European countries and American states.
Q
Dr Cox: I suppose it depends who you are. If you live in one of the postcodes where you cannot get palliative care, if you are socially deprived, if you are a member of an ethnic minority or if you have a lung cancer diagnosis, you will not get very good palliative care in this country. I think that is awful.
Q
Dr Cox: The position we would ask you to consider is whether this is the right time to bring in a law to give people a choice of assisted dying, when they do not have the choice to have good palliative care.
Q
Yes, so the direct comparison is not necessarily relevant. Is that correct?
Order. Can you address the Chair? This is not a dialogue.
Sorry. I was trying to make a point—
I understand that, but address it through the Chair.
Dr Cox: Palliative care may well have improved in this country over those years when it also improved in other countries where assisted dying was not available. What we are saying is that there has been chronic underfunding of palliative care, so where we are now is inadequate.
Q
Dr Cox: I accept that there will be people even with a very good palliative care system who would still choose assisted dying. We do not currently have the very good palliative care system that we need. That is the thing that concerns me.
Q
Dr Cox: I will give you some examples. We need to make sure that the 75% to 90% of people who are dying and need palliative care are getting it. We need to make sure that there is not inequity in palliative care, so that you do not have to be white and rich and have cancer to get good palliative care. We need to make sure that hospitals have seven day services. Seven day a-week cover is unavailable at 40% of hospitals. We need to make sure that communities have telephone advice services at night. One in three do not have any advice overnight for patients and their families to access. There are some concrete things that we could change to demonstrate that we are delivering a good service. But currently we are not.
Q
Dr Cox: I would love to see it continue. I am part of the commission on palliative and end of life care. There is no guarantee that the recommendations of that commission will be funded, and that is what concerns me. I would love to see that happen. Would it not be great if the two could happen simultaneously? But there is no guarantee that that will happen.
James Sanderson: I want to come in on your point and agree with Sarah’s points. Obviously, we welcomed the Government’s announcement of the additional funding for the hospice sector, but the Committee will be aware that the hospice sector currently receives only about 30% of its funding from statutory sources. We are therefore reliant on the good will of the population to raise money and support us in various ways, and through retail and other ventures that we have.
On the point about universality of service, we have in the Health and Care Act 2022 a requirement for integrated care boards to commission palliative care services that meet the needs of their population, but although there is guidance as to what that should look like, there is not universal take up of that guidance and delivery of all of the stated services. Although that is outside the scope of this Bill, it comes back to the context of how much the overall position can be strengthened across the country. The context for anybody looking to make a decision is within the same space. As Dr Clarke said in respect of informed choice, if the context is the same for everybody, we can have more confidence that that informed choice is made at the right level.
Q
To go back to your point, Mr Sanderson, it is important to acknowledge the fantastic work that palliative care professionals do. Indeed, it is extremely important that we are having these conversations, which is why we gave extra time to this panel of witnesses.
Dr Cox, on your point about the pressure on the individual doctors involved in the process, the Bill is very clear that if they do not have the relevant specialism, they must refer to a specialist in that condition, and they “can” refer to a psychiatrist. There is probably consensus that we maybe need to strengthen the Bill in that regard. When there are doubts around capacity, doctors probably “must” refer to a psychiatrist. That is something I am taking away from these sessions.
I was interested in the comments about the multidisciplinary approach. We heard about that this morning from colleagues in social work and in nursing. I would love to know your thoughts, Dr Ahmedzai, about the idea of a multidisciplinary approach. I think there is a lot of value in that.
Dr Clarke, on this concept around training, it worries me that we have seen this afternoon a very different picture painted by you and others compared with what we heard this morning, when we had doctors and nurses telling us that they regularly assess for capacity and coercion. They said it is part of their day to day work and they were very confident in their ability to do that. Training is fundamental, and this is an opportunity to look at gold standard training. I would be interested to know your thoughts on that.
Dr Ahmedzai: You asked me about the multidisciplinary nature of this. I am really glad you raised that, because we seem to be focusing on palliative care as being very professional, and I would remind people that there are levels of palliative care. A lot of palliative care is given not by specialists like the three of us here but by generalists—either GPs, as we have heard, or by oncologists or geriatricians. When we talk about increasing palliative care and improving palliative care, it is not just about more doctors like us working at a specialist level.
The other thing is that it is not just doctors. We have to acknowledge that nurses are on the frontline; they do so much more than doctors. When doctors clock off at 5 o’clock in those sad institutions that still do not provide 24/7 cover, there are nurses at the bedside all around the clock. Then, there are social workers, physiotherapists and others. If we are talking about meeting the needs of people who may not necessarily have pain but have other forms of suffering or worries, which are not even physical—the loss of dignity and the loss of independence—nurses are so good at supporting people in that. A doctor will just get in the way.
What we need to do is make sure that we are addressing the reasons why many people choose this. I know, from speaking to people abroad, that it is loss of dignity and loss of independence. Is that not a legitimate reason for wishing that you were not a burden on somebody, or on the state even? It is really important that we consider that.
The other thing to bring in as well, if we are thinking about the big picture, is another elephant in the room: palliative care is not strictly speaking actually in the NHS—not all of it. A lot of it is outside of the NHS, for historical reasons from 50 or 60 years ago when decisions were made. Although there are excellent charities providing discrete areas of it, we rely so much on non NHS services. You would never think of going to a charity to get your heart transplant or your kidney dialysis. We need to confront the fact that palliative care is fractured because of that history and the genesis of how palliative care came to be. It is not just NHS. We must think about the multidisciplinarity.
Dr Clarke: Regarding training and how much it is required, I would not be the first person to make the observation that sometimes doctors can be very pleased with their own abilities at a particular practice, and that practice might be having a conversation where you are assessing someone’s capacity.
What is interesting as a palliative care specialist is that I and my team will be asked to get involved with patients in every possible bit of the hospital—surgical wards, medical wards, intensive care, emergency departments—so you actually see a huge number of patients being treated by many different teams and many different doctors, junior and senior, all of whom are having these difficult, nuanced conversations around the end of life with varying degrees of skill. Of course some doctors and nurses are superbly skilled at having them, and I would say that there are many who are not.
The reason training is so important is that it is a little bit like Donald Rumsfeld’s unknown unknowns. You might not even be aware of the fact that you have caused a patient or their family distress. In a conversation where fear is a dominant part—the patient is fearful of suffering misery and loss of dignity at the end of life, but they may not voice that—you as the doctor can be completely oblivious of the fact that you have sort of stamped over those unvoiced fears with your hobnail boots. You are not aware of it.
This idea that a vulnerable patient needs to be absolutely at the centre of any conversation you are having is quite radical in some parts of the NHS. It needs to be taught much more assertively from day one of medical school, so that vulnerable patients are always at the centre of the room. That is why I think the single most important thing for the Bill and its safety comes down to training and actually recognising that these conversations are difficult and nuanced. If we assume that, we are going to make sure that the Bill is as safe as it can be.
Can I ask a quick follow up, Chair?
We will come back to that once I get other Members in.
Q
James Sanderson: I welcome the provision in the report. What is necessary is a benchmarking of the current position. Rather than waiting a significant period of time to do a review, we need to benchmark the current state of palliative care and then base subsequent reviews on any changes. As I mentioned before, we also need to look at the wider context. If we look narrowly at the provision of palliative care, we will not properly see what goes on across the whole environment of the health service and social care.
We have mentioned the fact that district nurses and general practitioners are providing a huge amount of palliative end of life care, so it may not just be what goes on inside hospices and in palliative care teams in hospitals. I agree that that needs to look at the demographic information so that we are collecting details on who is accessing palliative care and where, and the certain types. All that is necessary as part of the review.
Dr Cox: I agree completely that we need to be doing reviews now and in the future regularly on palliative care aspects. I also think there is an opportunity to write into the Bill other monitoring that would be really helpful in ensuring safety on an ongoing basis. That includes monitoring in terms of decision making—how often assessing doctors refer to others, how often they disagree and what happens after the declaration.
In the Bill there is, as far as I could see, no limit to the delay between the declaration and the request for the substance. That would be an interesting thing to look at in the future, because somebody could delay for six or eight months. Do we do another capacity assessment then? That is a tricky question. What about the taking of a substance? We have not talked about that. There are a lot of things we could look at in future that would be really helpful to monitor.
Q
Dr Cox: It is really difficult to know how many people who die by suicide because of their terminal illness would instead access assisted dying, and it is really difficult to understand the impact of assisted dying legislation on that. If we look at the evidence of suicide, we know that it is increased in people with serious illnesses, but it is actually increased in the first six months after diagnosis, not in the last six months of their lives, so it is about the trauma of the diagnosis. What we need for that is better mental health services, better support around diagnosis and earlier palliative care.
The other piece of evidence that I would offer to you is that the global picture of what happens to suicide rates after assisted dying legislation is introduced is confusing and mixed. But there are jurisdictions, for instance Germany, where after the introduction of assisted dying legislation the incidence of suicide has gone up year on year. I do not think we can say that introducing assisted dying legislation will stop those suicides.
Q
I was struck by the way the RCN talked—and you, Dr Clarke, used the word as well—about not being paternalistic, about having the patient at the centre of that conversation, and about ensuring that we listen to the patient and ask them, “What is it that you want?” That, for me, is all about autonomy. Do you agree? The emphasis must be on patient autonomy and their choice at the end of life.
Dr Clarke: One hundred per cent. Sometimes, those of us who work in palliative care almost see the extent to which we try to place the patient at the centre of everything as quite radical, when contrasted with a lot of the other medical specialities. My opinion about what is best for a patient does not matter; their opinion is what counts.
The power of the multidisciplinary team, and the reason for thinking that it may be worth considering amending the Bill so that there is a greater role for a multidisciplinary team, is this: the fact that everybody in that team brings their unique perspective. In my hospital, whenever there is a tricky issue regarding a palliative patient, we will have an MDT. There may be 10 people in the room, all discussing the issues. It might be that someone has decided that they want to withdraw their life prolonging treatments, or they want to have life prolonging treatment and, for whatever reason, it is really complicated. We will have the patient, their family, doctors, nurses, social workers and dieticians—a big group of people—in the room because that is the way to make the decision most safely and most effectively, in terms of enabling the patient to have the treatment that they wish to have. It is incredibly important to have that.
Can I ask Mr Sanderson to reflect on that, for the different context, Mr Dowd?
No. Order. We have two and a half minutes to go. One other hon. Member wants to ask a question. I want them to come in.
Q
Dr Cox: I think it is a choice for the patient. It is always a choice for the patient who they want to involve from their social circle, whether that is family or friends. However, I think that if the patient wants the family involved, then they absolutely should be, and they should be part of those conversations and discussions.
One last question, very quickly.
Q
Dr Ahmedzai: Clearly, British people have had that option for many years, since Switzerland first offered that. It is clear that two things happen. One is that it selects people who are better off and more functionally capable—they can do it—so it discriminates against disabled people. Also, people tend to do it long before they need to, when they are still fit. That is because mostly, they want to go on their own, without dragging relatives along. It is doubly damaging to families who are going through an illness with somebody who is dying. They have to say goodbye to them long before they need to. However, that is because we do not offer that option here.
Does anybody else want to comment? Dr Cox?
Dr Cox: I am happy to. Of course we do not want people to have to make that choice. I will refer to everything I have said before: are they are making a real choice, and have they had access to really excellent palliative care?
I also make a brief point about the impact of the discussion around what dying looks like that the Bill has raised, and the fact that the stories that have been told have suggested to many members of the public that death is inevitably ugly, horrific and dramatic. Actually, that has made many people fearful, and they have been emailing me and saying, “I am now afraid of dying, and I wasn’t before.” They may then choose assisted dying before they need to because they have had a fear instilled in them that death is inevitably horrible and dramatic.
But those deaths do exist.
Order. That brings us to the end of the time allotted to the Committee to ask questions. I thank our witnesses on behalf of the Committee for their evidence.
Examination of Witnesses Sir Max Hill KC, Alex Ruck Keene KC and Sir Nicholas Mostyn gave evidence.
Q
Sir Max Hill: Good afternoon. I am not sure how much by way of introduction you want, so please stop me. I was the UK independent reviewer of terrorism legislation 2017-18, and the director of public prosecutions 2018 to 2023—so I stopped 15 months ago. I am not a campaigner; I am here to bring any experience of criminal casework that I may have picked up along the way, as that was part of my diet as DPP. I have been quite close to the construction of the Bill, and I am happy to deal with any questions that I can.
Sir Nicholas Mostyn: I am Nicholas Mostyn, and I was a judge of the High Court family division, of the Court of Protection and of the administrative court until 2023, when I retired with the onset of Parkinson’s disease—which is a genuine slippery slope, unfortunately. I am now a podcaster and devoting myself to alleviating the hardships of people living with Parkinson’s.
Alex Ruck Keene: I am Alex Ruck Keene. I am a barrister in independent practice, and I need to emphasise that I am giving my evidence as a self employed barrister, not on behalf of any organisation I am associated with. You will have seen from my written evidence that I am associated with quite a few different organisations, because my practice and career straddles both advising and appearing in court cases involving mental capacity. I teach law on the end of life as a professor of practice at King’s College London. I am also heavily involved in law reform in different ways; for instance, I was the legal adviser to the Independent Review of the Mental Health Act 1983. I also do an awful lot of training in the context of mental capacity of both healthcare and social care professionals.
Q
Sir Max Hill: If the problem is anybody in future going on their own or accompanied by their loved ones to Dignitas, the answer is no—this Bill does not satisfy that. What we have learned from other jurisdictions around the world, where we see broader or multiple groups beyond the terminally ill who are entitled to use new legislation, has not been the model for this legislation, unless you and Parliament were to dramatically change it. The nuanced answer to your question is that this Bill does provide an opportunity for those in the category of being terminally ill, as defined in the Bill, to no longer have to resort, on their own or supported by loved ones, to going to Dignitas. So, yes, it can and will make a positive difference.
I should add, in answering this question, that my often quoted personal experience is that 27 cases investigated as assisted suicide came across my own desk as the DPP —five to six cases a year. A substantial proportion of those cases did involve Dignitas, because an accompanying relative who had returned alone was then investigated, but a proportion did not involve Dignitas at all, because there had been deaths at home. Of all those 27 cases, I made the decision to prosecute in only one, which was the case of an individual who was 19 years of age encouraging another teenager to end their life. That was a correct and successful prosecution.
I will also add—because until 15 months ago I was a prosecutor, and prosecutors look to bring criminal cases whenever the law is broken—that there was an additional handful of cases in which, although I was not making the personal decision, I supported authorisation of charges for murder or manslaughter where it was clear that an individual’s life had been brought to an end not at the time of their choosing. It is perhaps important to remember that this Bill, as and when passed—that is a matter for Parliament—would not truncate the homicide jurisdiction in this country. It will still be possible to prosecute for murder in those cases when one would expect to be prosecuted for murder. I think it is important to say that, as a very recent former prosecutor.
Q
Sir Max Hill: That small handful of cases involved an elderly couple where either he—it was usually a he—or she had chosen to bring to an end the life of their lifelong partner and, once that act had been carried out, claimed that it was an assisted suicide in circumstances where the surviving partner was merely carrying out the wish of the person now dead. There are a handful of cases in which that is clearly wrong and should not be accepted and where murder should be the offence brought before the court.
The point, though, is that throughout the time that I served as DPP—and, indeed, the time served by all my predecessors—we did not have the coercion offences created by the Bill, which I suggest would be a significant advance, and nor did we have a legal system in which the investigation was taking place before the death. It was the other way around. In each of the 27 cases I considered, the deceased individual was already dead, and that is when the scrutiny started. The major advantage of the Bill, if I can put it that way, is that that will be reversed, and scrutiny will be before death. In the case of coercion, where it fits the new potential clauses, prosecutions can—and, I am sure, will—be brought.
Q
Sir Max Hill: I think that coercion and the coercion clauses in the Bill should be read alongside the capacity clauses. What we are looking for, as required by clause 1(1) and clause 1(2), is a clear, settled and informed wish, voluntarily made without coercion or pressure. Those aspects were taken, at least in part, from the Crown Prosecution Service guidance on 1961 Act cases. Capacity involves understanding information, retaining it, using it and communicating it. If those hallmarks are not there, you may be in a situation where you should be considering coercion. I think you read the two together.
To answer your question directly, the criminal liability clauses—clause 24, and the new offences in clauses 26 and 27—are robust. As a matter for your scrutiny, they are aspects that we do not have in the law at present. There is, of course, the addition of clause 36, under which you cannot be a witness or a proxy to the procedure that is enshrined in the Bill if you are too close to the terminally ill person. That is another hallmark of the Bill that will hedge against coercion.
Q
Sir Max Hill: My inclination is that clause 26, which is part of the full body of the Bill, is the right place for this. As with the interpretation clause, clause 40, and as with the way we interpret statute as a matter of course, there are aspects of other statutory offences or Acts of Parliament that help us when we are seeking to determine what coercion is. The creation of the offence of coercion and control, now very commonly used in domestic abuse investigations and prosecutions, has brought us into this territory. It is not beyond the wit of anybody who seeks to use and interpret this Bill to also look for other parts of statute that deal with coercion.
I make the same point about capacity. What is in the Bill is very slender, one might say, because clause 3 simply invites the reader to look across to the Mental Capacity Act 2005. But that Act is very clear on what mental capacity is and how it is defined. I think what I am saying is that it is a drafting point, and I am not a parliamentary draftsman, but I do not have a problem with the definitions of dishonesty, coercion and pressure being in clause 26, where they are. It is not the only place one would look, though; there are other sources.
Q
Sir Max Hill: “Dishonesty” is a term of art in common use, but it is also a term of statute. Anyone investigating or, still more, prosecuting would understand what dishonesty means. I accept that there is a wider point—not so much for interpretation but for understanding—that this Committee may want to consider, of how much of that existing definition needs to be imported into the Bill. As with mental capacity, I would suggest that, beyond perhaps the odd footnote, it is not necessary for you as a Committee to define again what dishonesty means, because we have it elsewhere.
Alex Ruck Keene: On pressure, I think the Committee would be really assisted by having a look at the learning of the High Court judges exercising their jurisdiction under the inherent jurisdiction in relation to people who are said to be vulnerable. They have developed an awful lot of tools, where they are trying to look at people in complicated situations—potentially, but not necessarily, with impairments—who are caught up in what one person brilliantly described as being caught in a spider’s web. Those are the sorts of sets of tools used when judges are trying to work out what is going on, and whether it is the side of the line we consider to be acceptable or the side of the line we consider unacceptable—because “pressure” is doing a lot of work there.
Q
Sir Nicholas Mostyn: One per cent would be 6,000 deaths a year. If each took two hours to process in the High Court—you have to read it and hear the evidence; one of them has to be oral and you have to write a judgment—that is 12,000 hours. Each High Court judge does 1,000 hours in court—outside court, they do lots—so you are talking about nearly three quarters of the entire family division doing nothing but this. It is impossible, in my opinion, for this to be done by the High Court. It should be done in the Spanish way by a panel that is set up. In Spain, the chairperson of the regulator sets up a panel for each case—a doctor and a lawyer. They have to agree and they check that everything has been done lawfully. They do not make any value judgment about whether it is in the person’s best interest. They check that it has all been lawfully.
Interestingly, in 2023, 10% extra denials were done by the panel. I do not know whether that was because they were concerned about voluntariness or whether they were concerned about suffering—because the criterion is suffering there—but an extra 10% was done by the panel, so the panel was not just rubber stamping. They denied an extra 10%. I believe that an ad hoc system like that, with a doctor and a lawyer doing a check, would be the best way of doing it. The High Court—trust me, I’ve just come from there—has not got the capacity to deal with 6,000 cases of this nature.
Q
Sir Nicholas Mostyn: Can I just answer before he does?
Yes—it’s just that otherwise I will be cut off. I was trying to get two questions in.
Order. I said earlier that this is not a dialogue. Address your comments to the Chair, and I will decide who speaks and when. I do not wish to be rude, but everybody’s got to have their fair share.
Sir Nicholas Mostyn: I do not know if you have seen Sir Stephen Sedley’s memo, which came today. He has suggested that the Official Solicitor should be the checker of these facts, which seems a sensible idea. The Official Solicitor would be able to recruit more staff to do this. It would not be nearly as expensive as High Court judges, and it would be an efficient way of dealing with the problem. The advantage of the Spanish system is that you have a qualified doctor as well as a lawyer doing the checking. Remember—a High Court judge is not going to be a qualified doctor. That is a significant advantage in my opinion.
Q
Sir Max Hill: I am not sure about that. I would always default to the code for Crown prosecutors and the two tests that the prosecution must go through, regardless of the crime that is being investigated. The evidential stage test sets out what it is necessary to be able to prove—some people say to a reasonable level—to afford a reasonable prospect of conviction. One can well imagine that, in Dignitas cases, that hurdle or test is often satisfied. It was often satisfied in the cases that I considered, and could often be satisfied in the future, but the evidential stage test being satisfied does not always mean that a prosecution results. That is because prosecutors must then go to the public interest stage and consider the non exhaustive list of factors that are set out in the public interest stage test together with other policy, which, in this area of law, has developed since the legal case of Purdy in 2009.
In common with many other forms of crime, there are some legal policy considerations that a prosecutor is entitled to consider. They start at the very obvious—for example, what is the age of the suspect? Here, one is not thinking about the deceased who has gone to Dignitas. What is the age of the suspect? What are their characteristics? Have they ever committed a criminal offence before? What is their proximity to the case? What motivation did they have, emotional or otherwise, to lend assistance that technically means they have committed the offence?
I am going through that because, as I said, a proportion of the cases I considered were Dignitas cases, and it was often at the public interest stage that I determined that a public prosecution was not necessary. That is because, after full investigation, it transpired that the surviving relative had acted wholly out of compassion and, may I say, love for the deceased and was not seeking any gain for themselves—far from there being any dishonesty before or after the fact. That would still remain the case. It does not follow that, were this Bill to pass and were people then to take elderly relatives to Dignitas, they would necessarily face prosecution, but the premise of your question is “Could they?” and the answer to that is yes.
Q
Sir Nicholas Mostyn: I do not agree.
Q
Sir Nicholas Mostyn: I think it is unlikely. I am sorry for interrupting you. I always used to say, “Don’t interrupt”, so I am sorry about that.
I fear that I will be one of the people, referred to by the lady who asked the first question, who has to go to Dignitas—frankly, I could afford to do that—because the Bill is not ever going to provide an assisted death for me. I will not be graphic about what the advanced stages of Parkinson’s are like, but the medical Members among you will be able to describe what is likely—not definitely; I do not want to say definitely—to await me. I am choosing my words carefully. It is either going to be a poor death here or to go somewhere like Dignitas. If my children took me as far as Calais, and then helped me after Calais—assistance only applies to within the jurisdiction—and drove me on to Zurich, I would be extremely surprised if any prosecution ensued.
Q
Alex Ruck Keene: I think there are two different questions. First, is any idea of capacity sufficient at all? I think that is an existential question that I am just going to park. Turning to the Mental Capacity Act itself, it is important to understand that there are three different bits of that Act in play. We have a set of principles: the presumption of capacity; the presumption that you have to provide all practicable support before you find someone to lack capacity; and the idea that you cannot, just because a decision seems unwise, say that someone lacks capacity. Then we have a functional aspect—in other words, can you understand, can you retain, can you use and weigh the relevant information, and can you communicate that decision? We also have what some people call the diagnostic element—in other words, is there an impairment or disturbance in the functioning of the mind or brain?
These are the three separate things, all of which we make work—more or less—in everyday practice. I say “more or less”, because yesterday I was on the advisory group for a project funded by the National Institute for Health and Care Research, which was funded in 2022 to try and increase the quality of mental capacity assessments in healthcare settings. We need to be under no illusions about how well we are doing it at the moment, but we make it work, more or less.
The Mental Capacity Act works more or less in the healthcare context, because every time we reach the view that someone cannot make a decision, we have an alternative—we can think about best interests. What we are asking the idea of mental capacity to do here is different, because there is no suggestion that, if you cannot support someone to make a decision, you will ever make a best interest decision in their name to assist death. It is also not obvious that the idea of a presumption of capacity should apply. If I doubt that you have capacity to make the decision to take your own life, or end your life, but I cannot prove it, is it logical or are we required to proceed on the basis that you do? Also, it is not immediately obvious that it is right that the diagnostic test applies in this context. In other words, I think you cannot understand the information, but I cannot prove the reason that you cannot understand it is that you have an impairment or disturbance. That is where my concern came in when I was explaining it in my written evidence.
I want to be absolutely and totally crystal clear: as far as I am concerned, at this stage, this is policy development. I am so glad that evidence is being taken and the public is thinking about this, but a Bill of this nature needs to be drafted by the Office of the Parliamentary Counsel. I am really trying to get across the policy line, which to me is about what doctors need to be interrogating—or anyone else, as I would love it if other people were involved—is, can the person understand the information? Can they retain it? Can they use and weigh it? Can they communicate their decision? If they cannot, we do not need to start mucking around with, “Why not?” It is just that they cannot, and that is the central idea of capacity. It is the functional idea, but it is tooled for use in the Bill rather than, as it stands at the moment, just being cross referred out to the Mental Capacity Act, raising a whole series of additional complexities.
My only other observation is that I spend an awful lot of my life trying to improve Mental Capacity Act practice more broadly. I would be massively concerned were a knock on effect of the Bill’s seeking to deal with a very specific group of people to be that it starts inadvertently—it would be inadvertent—interfering with how we think about healthcare decision making more broadly in the context of those people with impaired decision making capacity. It is an insulation point, a making sure you have the right tools for the job point, and a not having a knock on effect on thinking about things more broadly point. Sorry for the long answer.
I will move on to Sojan Joseph, but perhaps you can pick this up. We have eight people wanting to ask questions and half an hour, tops.
Q
Alex Ruck Keene: I think for many reasons it can. On the pure capacity side, this is, at one level, an existential question. This is not a healthcare decision but an existential decision. The more people we have who are able to bring their different perspectives—the social work perspective on the person’s social circumstances or the medical perspective on their medical condition—the better, so that we have as many eyes on the person and insights into the person as possible.
It is about trying to make sure that the decision goes back to whether we are really satisfied that the criteria set out at the beginning of the Bill are met. I personally think we should have MDTs, for instance, as you would have in a Mental Health Act detention, so that we have more than one pair of eyes on it from more than one discipline.
Q
Sir Nicholas Mostyn: I was sort of taken by surprise when she asked the me the question in the pub, and I would not have phrased it like that in court 50.
Q
Sir Nicholas Mostyn: Parkinson’s is such a complex condition. The medically qualified amongst you will know this—there are so many symptoms, and with the rate of development and the direction of travel, it is an enormously complex condition to know. That is why it is commonly accepted that you do not die from Parkinson’s, you die with Parkinson’s, and it is almost impossible to give a mortality rate as to when that is likely to happen—almost impossible.
When I was doing my research, I was slightly surprised to see that last year 6,000 death certificates had Parkinson’s written on them. They do say that the experts in Parkinson’s are the people with it, but the people you talk to are quite clear that it is impossible to predict and it is a really complex thing. That is why this arbitrary—I use the word technically—six month period is a problem. If a doctor opines conscientiously and honestly, unless the Parkinson’s patient has already developed pneumonia, sepsis or something of that nature, or complications from falls—the common reasons for death—you will never get that six month ticket. That is the thing; that is the problem.
Q
Yes, those with such conditions. Are they left out of this debate?
Sir Nicholas Mostyn: They are.
Q
Sir Nicholas Mostyn: It has been suggested that I want to expand the definition of terminal illness. I do not want to expand it. I want to redefine it so that it is more appropriately focused, in my opinion, on what this Bill should be about, which is the relief of suffering. That is what I believe the Bill should be about. You should get the permission to have an assisted death if you are suffering intolerably within five months of death or seven months of death—there should not be this arbitrary line.
Moreover, it should not be open to people who are not suffering, but who happen to have a six month life expectancy. There are probably quite a few of them, for one reason or another, whose life expectancy is short, but their pain is well managed. I do not believe that assisted dying should necessarily be available for them. I do believe very strongly—this is not an expansion, but in my view, a more appropriate focused redefinition of terminal illness—that it should be, as in Spain and in Holland, focused on suffering.
Q
My second question, which is completely different—just to mix it up—is on a really interesting point in your written statement about how we need to give consideration to the national suicide prevention strategy. I found that really interesting, because the Bill potentially turns on its head the way we view suicide, and obviously we have been sending a certain message out there, particularly to our young people. Could you elaborate on the point you were making in your written evidence to the Committee?
Alex Ruck Keene: Gosh—yes. There is absolutely no way that you can stop people trying to challenge whatever Act is passed; there is no way you can stop people seeking to challenge that under the ECHR. We then get into this enormous argument about whether it is inevitably discriminatory. Courts to date have been very clear: “We are not going to get into this; it is for Parliament to decide whether to make assisted dying legal.” Once it is made legal for some people, but not for others, there is a difference in treatment. Whether it is discriminatory, and therefore contrary to articles 8 and 14 of the EHCR, depends on whether that difference is justified.
I am trying to be very careful in my language, because I try to do that. The Bill Committee and Parliament need to be very clear how, if you are going to limit this to a cohort of people—I feel acutely conscious that I am sitting next to somebody who would be excluded—it could be explained to somebody that they are not eligible and that there is a difference in treatment but it is perfectly justified. If you cannot do that, it will be discrimination.
The courts have been very clear that you do not have to have a system, but if you are going to have one—for example for social security benefits—then you need to have one that is non discriminatory. That is the answer I can give to that. The one thing I can say is that you cannot stop lawyers trying to challenge. That is what they will do.
Sir Nicholas Mostyn: All laws discriminate; 69 mph is not an offence but 71 mph is. All laws discriminate. The question is whether it is justifiable.
Sir Max Hill: It is also a question of providing legal certainty, which is why the definitions in the Bill are so important. Provided that it is articulated clearly and within what the European Court so often calls the margin of appreciation, which it gives to sovereign states, then although I agree with Alex that a challenge may be possible, I cannot see a successful challenge to the Bill if it is drawn with the sorts of provisions we have here. Indeed, we have not seen local nation state examples of this sort being struck down by the European Court elsewhere in Europe, so I think it is very unlikely that we would see such a strike down here.
Alex Ruck Keene: I really hate to get into it with such eminent lawyers, but there has not been a case in Strasbourg seeking to say that a limited class of case is discriminatory, so we just do not know.
Sir Nicholas Mostyn: I agree with that. I have changed my mind twice about this subject.
Alex Ruck Keene: Do you mind if I quickly touch on something else?
Not just at the moment. We will move to Daniel Francis.
Q
Alex Ruck Keene: I should make it absolutely clear that all I am trying to do is make sure that whatever law is passed is a good law and has as few inadvertent consequences as possible. My concern here arises out of the fact that understandably the proponents of the Bill want to make it very, very clear that this is about people carrying out a final act, and no doctor is allowed to do something that involves going beyond that. At the same time we have a situation where doctors—I am using the word “doctor” slightly loosely, but for present purposes that is what we are talking about—have to be present and have to remain with the person. We know that there will be some people for whom there are complications.
My concern is to make sure that there has been sufficient consideration given to what exactly a doctor is meant to do at that point, because it seems to me that it ends up putting the person who is undergoing those complications in a horrible position. It is also—I am perfectly happy to use this phrase—putting the doctor in a position of extraordinary moral distress. Are they at that point supposed to try and rely on the doctrine of double effect and say, “All I am trying to do is treat the complication, not bring about your death,” but the Bill is saying, “No, you are not allowed to do that”? I understand entirely why the intention is to say that the doctor must always be hands off, as it were, but you need to super clear that you are going to put some people in some very, very difficult positions, and Parliament needs to be clear eyed about that.
Q
Sir Max Hill: I would not look at it on grounds of discrimination. What I would do is put that clause alongside what are generally referred to as the slippery slope arguments in other jurisdictions. In other jurisdictions—Canada might be one and some of the US states might be another—the provision of life ending medication is expressed in a form of treatment by a doctor. This is not that. We are clear when reading clause 18 that it is not a permission to administer; in fact, it is a prohibition on administration. It is making available in certain tightly defined circumstances and then standing by—not necessarily in the same room, as stated in subsection (10)—while the self administered medication takes effect.
Having said that, I am absolutely clear that there is only so far a Bill or Act of Parliament can go as primary legislation. There is then further distance that must be covered by the provision of practical and professional rules, under the auspices of the national health service here, to indicate precisely the circumstances in which this will physically happen. I do not see that as discriminatory; we are dealing with a tight category of defined individuals to whom this applies and it does not apply to anybody outside that, as we have just discussed. But it is not prone to the slippery slope arguments of something that is generally to be made available in the course of treatment. In fact, the Bill has been couched in a very different way.
Q
Sir Nicholas Mostyn: I did. What particular aspect do you want me to address? The range is quite wide. In relation to the administration of the substance, it is interesting that in Spain, which is now in its second full year of doing this, take up has been extremely low. There have been only 700 requests, with a quarter denied, and a quarter of the people died prematurely. Three hundred were granted, but of those 300, in 95% of cases the substance was administered by the doctor and auto administered in only 5%. I am trying to work out why that is, culturally, in Spain. Maybe people go when they are extremely infirm, and that is the reason for it. I am not able to see the moral distinction between having the substance administered and auto administration. On your question, there are devices that enable somebody who is locked in to end their lives by a blink of the eyelash, aren’t there?
Sir Max Hill: Yes.
Q
Sir Max Hill: I would say two things. First, it bears weight that, looking at all the provisions in the Bill, the additional level of scrutiny currently being called judicial scrutiny or approval is absent in all the comparative examples around the world. That already makes this a tighter pre legislative model than we see in other countries that have gone down this route. That is worth remembering.
Secondly, while I am not a family lawyer—I was, but a very long time ago—I think that the family division of the High Court would be very well placed to perform the sort of exercise enshrined in current drafting, which is not a rubber stamping exercise, but a substantive consideration of heavily objective medical opinion arrived at by not one, but two doctors, one of whom is not the treating doctor.
I listen to and accept the question of pressure on the justice system generally. That is something the Committee will be concerned about because, if the Bill passes, we want something workable. I heed what Sir James Munby said. The sitting judiciary, for good constitutional reasons, is highly unlikely to say anything. But there is therefore merit in looking at clause 12, under the heading, “Court approval”, and performing quite a simple exercise, which for me would be going through subsections (1) to (6) inclusive and, where it says “High Court”, replace that with something else. Personally, I have an aversion to the word “tribunal”, which indicates a right and wrong or some kind of fault based system—that is not what we are talking about here. But a panel, as Nick said, is the way to go— Sir Nicholas Mostyn: A panel appointed by the Official Solicitor.
Sir Max Hill: Whether appointed by the Official Solicitor or not. Dare I say it—because I am sitting next to a very distinguished one—I do wonder about the recently retired members of the judiciary and the role that they could play under a replacement panel system.
Sir Nicholas Mostyn: That is what I had in mind—the Official Solicitor looking at the retired judges.
Sir Max Hill: Yes, so there is legal professional capacity among the retired judges—not that they would sit alone on a panel. It would bring with it the extra benefit of having suitably qualified medical professionals, like the Spanish model. So yes, I think that could be done. That is not the same thing as saying that the High Court approval model is fatally flawed and could not be introduced, but I do think there is a viable alternative, which is worth looking at.
Alex Ruck Keene: I have only one observation, and I said this in my written evidence but I also want to say it out loud. You have to think very carefully about what purpose any form of this oversight is actually serving societally, if the oversight panel, whether that be a judge or a panel, cannot decline to approve an application if it considers that the reason the individual is seeking assistance in dying is because of service provision failures by the statutory bodies responsible for meeting their health and social care needs. That is a question of principle, and I want to make sure that that is squarely before you.
Q
Alex Ruck Keene: We have capacity, but we also have to make sure that it is settled, informed and voluntary, and that we do not have things like pressure or influence going on. It is important to make it clear that we are not just saying that this is about all the weight going on capacity. For instance, if you have social workers involved—if you have, say, palliative care social workers involved, assuming it is a palliative care situation—they are going to be far better informed about what options might be out there than a doctor, potentially, depending on the doctor. Social workers more generally might well have more expertise in picking up signs of coercion or influence than a doctor, but I do not necessarily want to get into, “Some disciplines are good at X” and “Some disciplines are good at Y”—I have come across brilliant examples and bad examples in both zones.
It is partly about multidisciplinariness and also about the fact that you have more than one person trying to talk it through. When I train, I always try to tell people that 85% of capacity assessments are not all that difficult —they are just made difficult because you do not have time or you are not listening—but 15% are more difficult. I think a lot of these will be in the 15% zone, and in that zone, the more people you can have thinking about it, so long as they have an agreed framework within which to think, the more reliable, transparent and accountable the outcome is going to be.
Q
Sir Nicholas Mostyn: The former.
Q
Sir Nicholas Mostyn: It will have the statements in schedules 1 to 4, signed by both doctors twice. This is where it gets slightly tricky. Is the panel expected to be a ferret and say, “This does not quite chime for me”? The Committee will have to consider how investigative the panel will be, or whether it will purely sit back, be passive and work on the material it has. Of course, under clause 12, it has to hear orally. That might get the alarm bells going, but I believe that the panel should be entitled to call for further evidence if it has concerns. As I say, I have been trying to find out why 10% of cases were rejected by the panel in Spain. There must have been some kind of procurement of further evidence by the panel in order to do that.
Q
Sir Nicholas Mostyn: Article 10 of the Spanish law gives an appeal on a point of law to their high court, so I would have the same, with an appeal on a point of law to the High Court, but only on a point of law.
Alex Ruck Keene: Either way—it would have to be either way. It could not just be against a decision not to approve, logically, because the current model is very odd in saying that you can only appeal one way to the High Court.
Sir Nicholas Mostyn: Yes. Spain gives either side the right to appeal, so I agree with that, but it is confined to a point of law.
Sir Max Hill: I would only add that I wonder whether that is the only route through, namely leaving open a judicial review appellate process, or whether, for example, as we imagine with a number of commissioner led processes already in this jurisdiction, the panel—or frankly, I suspect, panels, which might sit regionally, chaired perhaps by the retired judiciary—would have an appellate route to a national body, which you could call a national commission, instead of a judicial review route to the Court.
There are a large number of commissioners, some sitting under the Home Office and some sitting under the Ministry of Justice—in a sense, I was a commissioner when I was the independent reviewer of terrorism legislation—with closely defined powers. There are many others who sit in an enhanced regulatory position—highly qualified individuals. You could describe them as national commissioners, if that is an appropriate term, and they would have superintendence over regional panels, and the power to appoint retired judiciary, perhaps with the assistance of the Official Solicitor, to sit on those regional panels, and then to have an internal appellate mechanism.
Sir Nicholas Mostyn: You have to have an appeals process of some type, because otherwise there will be judicial review. If there is no appeal, there is judicial review—so you have to have an appeal of some type or there will be judicial review.
Sir Max Hill: Yes, I agree.
Thank you.
We have some Members who want to ask more questions; we have about six minutes or so. Jake Richards, you did have a possible question earlier on.
Q
Sir Nicholas Mostyn: Relations who say, for example, “My father has been pressured by his new wife to do this”. If a father has given permission and the child has asked to intervene, there would be some process where the child would be allowed to become a party to the proceedings, because that will have to be specified in rules, and that person would then be the appellant.
Q
Sir Nicholas Mostyn: Well, it does.
It is an autonomous decision, so— Sir Nicholas Mostyn: No, but it says, procedurally, they can determine their own procedure.
Yes, sorry, I meant that, in terms of—
Order. I am giving you an opportunity to ask a question, so ask the question, we will get the answer back and then we can move on. I do not want this dialogue, I am afraid.
Forgive me, Mr Dowd. I meant that, in terms of the assisted dying process in the Bill, there is no automated mechanism for family members, or indeed any third parties, apart from the doctors, to have notice of this intention. Is there a concern, regarding this appeal point, that perhaps interested parties would not know?
Sir Max Hill: I would suggest that the key to this is in clause 12(5), and that is why I have recommended just striking out the words “High Court” and putting in the word “panel”, and then reading the whole of clause 12 as amended, with those situations in which there are steps that “must” be taken—and there are many—and those in which there are steps that “may” be taken.
In clause 12(5), following that logic, we would imagine that a panel, just as the High Court, “may hear from and question, in person, the person who made the application”
but “must hear from…the coordinating doctor”.
The appellate mechanism, which I agree there needs to be, will be looking sharply at the operation of that subsection. In other words, when the panel made its decision to refuse, on what basis did it make that decision and from whom had it heard? We can well imagine situations in which a co ordinating doctor, having taken his or her own steps to ascertain the views of the nearest and dearest, would satisfy the panel as to what the views of the family are. The reverse of that is that there is no indication here that, having gone all the way through the panel, the family would have been made aware or considered at all. I think that that will be a rare scenario, but I am not a medical professional. I think you can cover that, perhaps with some changes here or there on what you impose on the panel as a mandatory duty and what you leave by way of discretion, subject to the rules of procedure that the panel would then adopt.
Q
Alex Ruck Keene: This is, for the moment, predicated on the fact that we are still in the High Court, as opposed to slightly making up policy on the fly about a panel. Assuming it is the High Court, it seems to me the Court has to be discharging a properly inquisitorial jurisdiction, which means it has to be armed with the tools to do that, which includes arming it with the tools to call for its own evidence. It also seems to me that the High Court would have to be armed with its own ability to not just receive evidence from one side and have someone testing it. That then brings you to the only player in town who could possibly do that, which would be the Official Solicitor as advocate to the Court.
I do not want to emphasise too much the question of resources, because if Parliament thinks this is sufficiently important, the resources will be voted through. But it is vitally important to note that the Official Solicitor is completely overloaded, and we would be asking the Official Solicitor to act as advocate to the Court in every single one of these cases. You could not have it be optional; you cannot say that it is some and not others. If it is going to be inquisitorial, the High Court has to have the ability to say, “This is one sided; someone needs to tease it out,” so the Official Solicitor would have to be funded to be advocate to the Court and, if necessary, instruct lawyers in every single case.
Sir Max Hill: The model that I was espousing would not necessarily involve the Official Solicitor at all. It would make no draw on the administration of the Court or any officer of the Court, still less full time judges. It would allow the appointment of recently retired judges, as we have in a number of scenarios—surveillance commissioners, for example—and a fresh administration. With that, as with the High Court model at the moment, there is the primary set of provisions, which Parliament must impose, and it is important that that is sufficient for what Alex called an inquisitorial function. Those are in part mandatory—those things that the panel must be satisfied about, which are set out in clause 12(3). Then there are those that are discretionary, which are set out in clause 12(5).
What sits between the two is very important. That is currently expressed as “Rules of Court”, but it would be the rules of the panel, or the commission that appoints the panels. In a court scenario, we are all familiar with criminal procedure rules and civil procedure rules; that is the secondary stage that is reached once the primary legislation has been fixed. That, too, would apply to the commission or panel process, but I do not necessarily think that it would involve using existing, paid judicial resources at all.
Unless there are any more pressing questions—
indicated assent.
We have one and a half minutes, so it will be a 10-second question and a 20-second answer; unless you can do that, I am going to call it to a close.
indicated dissent.
Q
Sir Nicholas Mostyn: I would frame the law to define terminal illness in the way that it is defined here in clause 2(1)(a), but where the “person’s death in consequence” is referred to, I would delete clause 2(1)(b) and substitute “suffering intolerably”.
Thank you. That brings us to the end of the time allotted for the Committee to ask questions. I thank our witnesses on behalf of the Committee; thank you for your forbearance.
On a point of order, Mr Dowd. I had my hand up at the beginning. I was really keen to ask a question in this session because it is pertinent to an amendment that I have tabled. Could you advise how best I can have the opportunity to ask my question?
I am more than happy to speak to you afterwards. We have had lots of questions today and I tried to get people in as much as possible, but there has to be an element of self discipline from the people asking the questions and interrupting. I am happy to facilitate if I possibly can, but I am afraid that there is also a responsibility on Members to look to other Members’ needs.
Examination of Witnesses Dr Ryan Spielvogel and Dr Jessica Kaan gave evidence.
We will now hear oral evidence from Dr Ryan Spielvogel, who is senior medical director for aid in dying services at Sutter Health, California, and Dr Jessica Kaan, who is medical director for End of Life Washington. Both witnesses will appear via Zoom. I call on Members to ask questions, but in view of the last point of order, I must be absolutely clear that I will interrupt if questions to the witnesses are too long. We do not have much time and people want to get their questions in—there has to be an element of self discipline in that regard.
Q
Dr Spielvogel: Thank you all for having me today. I am Ryan Spielvogel and I am senior medical director for assisted dying services for Sutter Health in California. I have been an assisted dying physician for the past eight and a half years, since the law went into effect here, so I have seen many terminally ill people going through the process.
You asked specifically about coercion and capacity. Determining mental capacity is something that we use physicians to do every day. There are codified steps and processes for us to be able to assess a person’s capacity. Capacity for anything, for any procedure or medical intervention, is presumed—that the patient has capacity—until they are deemed to not have capacity. We do that through asking questions, determining their understanding of their disease process, asking them to repeat what their understanding of their options is, and making a decision and then telling us their judgment as to why they came to that decision.
That is something that we do every day. It is oftentimes informal. For instance, if I am prescribing someone blood pressure medication, I might not go through the entire process of assessing capacity, but in longer or higher stakes conversations like end of life discussions, I usually do ask somebody to repeat back to me what they understand of their disease process, their options, what their decisions are and why they are making those decisions. That is basically exactly what I do in these conversations.
In terms of coercion, I understand the concern. It is a very valid concern that people have. I have seen this in many jurisdictions in the US, where different states are considering legalising assisted dying, but I will tell you that in practice it just does not happen. I have seen assisted dying laws go into practice across numerous states and have helped many, many people through this process, and I have never seen a case where I even suspected coercion. People are just not that good as actors.
So we get the family out of the room. We dig deep into their concerns, their justifications and the reasoning behind their choices. It is often crystal clear, when you are speaking to someone who is suffering from a terminal illness. They are very focused on their symptoms, very focused on their quality of life, very focused on their suffering. I do not ever get the sense from them that their family, their doctors or anybody is coercing them into the decision. In fact, if anything, I have seen it many times the other way around. I tend to see it where the patient is really ready to let go, but the family is really not ready to let go, and the family puts up varying degrees of roadblock to the patient accessing assisted dying. I have seen many cases of people being coerced out of it; I have never seen someone being coerced into it.
Q
Dr Kaan: I echo exactly what Dr Spielvogel has said. As part of our medical training, we are trained to assess capacity in both small and big ways, depending on the size of the decision at hand, as he said. Throughout our medical training, we are trained to do that and to assess with a patient progressively over time, as we are seeing them in subsequent visits as well. This is really no different from that, although obviously the stakes are a bit higher than a blood pressure medication discussion.
We look at whether, for instance, the patient is able to voice a reason for making their decision. Do they have a logic behind it? Do they have a set of values that they can express? Is their decision consistent over time? We are looking at a longitudinal assessment, rather than just one fixed moment in time. Over the course of our assessments, it really does become clear in almost all cases that somebody either does or does not have the capacity to make this decision or any decision. This is really not outside the realm of what physicians are trained to do in any other case of medical decisions, especially large ones.
In the case of coercion, I agree that virtually all the time it is the opposite way: family members and loved ones are well intentionedly trying to coerce or convince someone not to make this choice or not to proceed with this option, which they may have available, rather than pushing them to do it. I think the way to properly assess that is to ask open ended questions: as Dr Spielvogel has said, to have them in the room alone, at least for a portion of the assessment, so you can have a one on one conversation; to ask the questions in various ways, so you are seeing the consistency of answers over time; and to look for non verbal cues that may indicate that something else is going on. I have also never come across a case where I felt that a patient was being coerced into this decision by a family member, but rather the opposite.
Q
Dr Spielvogel: The original version was called the End of Life Option Act. It legalised assisted dying in California when it went into effect in 2016. It was then amended in 2021, I believe; the effect of the main amendment was to shorten the waiting period. There was a 14-day mandatory waiting period between two verbal requests that a patient would give directly to their physician. What we found when we were studying it was that approximately 30% of people died during the waiting period.
There were many conversations with patients. The thought process behind the waiting period is that somebody is making a persistent, well thought out and non capricious decision when they are asking for this, but there is a false premise there—[Interruption.]
Sitting suspended for a Division in the House.
On resuming—
We were in the middle of your reply, Dr Spielvogel. Could you pick up where you left off?
Dr Spielvogel: I will make it brief. I was saying that it is an erroneous assumption that people start thinking about assisted dying the first day that they give their first verbal request. In reality, people have usually been thinking about it for weeks before that visit. Because of that, we did not see anyone’s decisions really ever change between the first verbal request and the second, 14 days later. That and the fact that 30% of people were dying during the waiting period led us to shorten the waiting period to 48 hours. That is the main change that we have had in our law since it was implemented.
May I put the same question to Dr Kaan?
Dr Kaan: You will know that throughout the United States there are a variety of aid in dying laws, all of them slightly different across jurisdictions. I practise in both the state of Oregon and the state of Washington, so I have to keep track of two slightly different laws.
In the state of Washington, where I am the medical director for End of Life Washington, we updated our law in 2023, mostly because we were trying to increase access to it for people who lived in rural communities or for people in underserved communities. Any healthcare system in the world right now has experienced a shortage of physicians, so the requirement for two physicians to do the certification was a barrier for people in those communities that did not have access to two physicians. One of the things we did to increase access in 2023 was to make it so that one of the two providers could be a non physician: a physician assistant or a nurse practitioner with advanced training. One of the providers still needs to be a qualified physician, but that has increased access for those in rural communities and underserved communities. We are very proud of the fact that we have done that. Additionally, we shortened our waiting period for similar reasons, from 15 days down to seven days.
In Oregon, they shortened their waiting period. Well, they still have a 15-day waiting period, which has been stable since the start in 1997, but they also now have a provision whereby, if a patient is expected to die within those 15 days—if they are at the very end of their life and are not expected to be able to survive those 15 days—they can bypass the waiting period. I really like that provision, because there are patients who come very late in their process to this decision. It may not seem like much to us, who are healthy and relatively well, but 15 days for a dying person who is suffering and really wants this option is an incredibly long time.
Q
Dr Spielvogel: People often feel that at the end of life, just in general. I think that conscientious people will often think about their family and how their situation is affecting their family and loved ones. That is something that many people go through, so that is something that comes up relatively frequently. It is usually embedded within a laundry list of reasons that people are looking for assisted dying. When people bring it up with me, it is more of a commentary on what they do not like about their dying processes—that they are also feeling like a burden on their family. That is a red flag for me, though: when I ask someone, “Why are you reaching for this?”, and they say, “Well, I am a burden to my family,” it is a red flag for me as a physician.
This goes back to the argument about capacity and coercion, because we are trained professionals who listen for these things. This is not a rubber stamp evaluation. When we ask people why they are looking for this, we really want to assess their judgment and see what their reasoning is. If they are saying, “I’m suffering intolerably. I’ve tried all the things that palliative care and my regular physician are offered me, but I’m still suffering irrevocably. Also, there is this other piece: I see what this is doing to my family,” that is totally valid. That is something that any of my dying patients might say, whether or not they are seeking an assisted death.
If that is the only reason, that is going to lead me to ask a lot of probing questions. It would be a red flag for me, but it is incredibly rare that something like that would be the only reason. Dying is a very complex process, and people’s thought processes during their own dying are equally complex. There are a lot of things that people think about during that time.
Dr Kaan: I echo Dr Spielvogel. It is common that among the lists of things that people mention as reasons, they may mention not wanting to be a burden on their families or not wanting to put their families through an onerous and prolonged dying process. Obviously, if that is the only thing that they are mentioning, it will definitely get them further discussion and exploration into what is going on and what other resources we can point them to, such as connecting them with social workers and available community resources for helping with caregiving.
However, I hear most commonly that people’s desire to save their families from a prolonged dying process comes from lived experience, where they themselves went through the process with a loved one such as a mother or father: they were caregivers, sometimes for years, and felt that it was a burden on them, although they were happy to do so and it was loving. They have that lived experience and they are looking to save their family from what their experience was. I think it is common that people feel some element of that when they are in a situation where they require heavy caregiving.
I think it also goes back to autonomy. People who are in their right mind and have the capacity to make this decision should have the autonomy to have their reasons and their value systems respected, whether or not we share them or see it in the exact same way.
Q
Dr Kaan: The thing I have been reading about that is concerning to me is the court approval that you seem to have written into your law. I heard your discussion this morning about how that might be done and whether it is a committee or the High Court and so on. I think that that is really going to limit access to this, and that makes the process a much lengthier one.
Again, these are people at the end of their life. People are not looking, by and large, to cut off a huge amount of their life; they are looking to shorten their death, not shorten their life. By making people go through a court appeal in addition to two qualified physicians, as well as the waiting period, I think that you are going to limit access for people who desperately want this option. It seems like that might be baked into your law, but I would say that that is a concerning feature to me. I think that you are going to limit access that way.
Dr Spielvogel: Something that it turned out was not in our law, but everyone thought that it was for a few years, and it really limited our practice, was that many people were under the impression that the physician could not bring up assisted dying with the patients, and that the patients had to bring it up themselves. That turned out not to be in our law, but that idea really hampered our ability to take care of patients, so I would strongly recommend that there not be anything like that in your Bill. People cannot make informed decisions for themselves if they do not know what their options are. While this is top of mind for all of you and for the doctors—we all know that this exists—even if this Bill becomes law, the general population is still not going to realise that it is an option.
I eat, sleep and breathe this. I am a primary care physician, and when I am going through the options with patients who are newly diagnosed with a serious life threatening illness, I say, “Okay, here’s what disease directed treatment would look like. We can continue with your chemo. Here are some side effects and complications that you might have, and here are the benefits of that. Here’s what palliative care or hospice care would look like.” Then I say, “I don’t know if you know this, but in our state we have this other option for people nearing the end of their lives when they have intolerable suffering. You can ask me to fill a lethal prescription for you to help end your suffering sooner.”
The number of times that people look at me and say, “You can do that? That’s an option here?” is astounding. I would say that nine out of 10 of patients I have conversations with have no idea that that is even legal. If they do not know it is an option, they are never going to ask for it. For physicians to do their jobs properly and deliver care to people, and for people to actually have a choice, physicians need to be able to discuss it with their patients.
Dr Kaan: I will just piggyback on that. I cannot count the number of times I have given a presentation or a talk to communities, and people—usually family members of someone who have died, not using this law—have come up to me afterwards and said, “Thank you for what you said. My loved one was interested in having this information, or wanted to talk to their doctor about it, but their doctor never brought it up, so we weren’t sure if we should be bringing it up.” It is a huge burden to put on patients and their loved ones if they have to bring it up themselves. I would highly caution against any sort of language that requires that, because it is just not fair to them. They are already going through so much and, as Dr Spielvogel said, you cannot have an informed decision making discussion with a patient if they do not have all the options available for discussion.
Q
Dr Kaan: That is a really important question, because this is a really important topic in the United States. Our laws are very clear that participation is voluntary, so there is no such mandatory training across medical training in general. It is always voluntary. If a physician or provider wishes to have training, they can seek it out. What is available and the standard of care differ from state to state. Certainly, in the state of Washington, where I am the medical director of the organisation that is most largely involved with this, the bulk of my job is doing training, mentoring and shadowing. There is no exam at the end of that process, but there is certainly shadowing and a feedback process.
I am also heavily involved with the Academy of Aid in Dying Medicine, which has been very active in creating professional training. We have a Journal of Aid in Dying Medicine, which is a peer reviewed journal that puts out articles that are relevant to the topic. The Academy of Aid in Dying Medicine is now undertaking certification pathways, so each level of provider—social workers, chaplains, physicians and anyone else who might be involved in the aid in dying process—will be able to take these certifications. A more uniform education system will be available. We are just at the beginning of creating those, but it is very exciting, and we are very happy to have those out. A lot of resources are out there in the world already, in general, to train providers in how to do this well, and it would be really smart to have something in your Bill that outlines what the training should be, whether you will make it mandatory or voluntary and perhaps some sort of certification pathway.
Dr Spielvogel, I do not know whether you have anything new to add to that. If not, that is fine.
Dr Spielvogel: Without repeating anything that Dr Kaan said, I was just going to say that in addition to my assisted dying hat, I am also the programme director for the family medicine residency programme, so my main job is actually training young physicians who are becoming what you would call GPs.
We have instituted curricula as part of our residency programme here to train interested physicians in learning how to do assisted dying. We go through a whole process for that, including lectures, them shadowing me and me shadowing them, listening in on their conversations, giving them pointers and walking them through the steps of the process. They then do this with multiple patients through the course of their residency, so when they graduate, they feel confident in being able to offer this care. As with most medical training, this should be included in that part of the training process. All the other things, such as pathways in continuing medical education, are very important for physicians out there in practice who want to start doing this, but really getting this into medical training at its roots is vital for normalising the practice.
Speaking of which, something else I have heard a lot is that this might be distressing to physicians, or that physicians would not want to offer this care. I would like to say that 80% of our residents on our programme opt to receive this training. When we did a study on this of graduates from our programme who were continuing to offer assisted dying, 70% of the surveyed residents said that their assisted dying work was more rewarding to them than the rest of their primary care work—70% said that it was more rewarding.
I want to come back to the notion that physicians would feel burdened or that this would be some sort of psychological negative to physicians practising it, because it is actually quite rewarding work. It has led me to be a better physician to all my patients because it has helped me with having these difficult end of life conversations with them. That was a bit of a twofer, sorry—I added that on there.
Q
Dr Spielvogel: A lot. I have actually been quite surprised. Everybody is different. This is the whole point: different people have different goals, objectives and values. I have mentioned it to people who say, “No, I would never do that,” and I never bring it up to them again.
Sorry, but how many do you think?
Order. Do not interrupt the witness, please. Let him finish. You can then come back in with a question.
I apologise.
Dr Spielvogel: No problem. To answer your question more directly, I have had several people over the past couple of years who had no idea that it was an option and said, “That’s what I want to do.” They then went through the process with me.
Q
Dr Spielvogel: Yes. I think it could be made into a misdemeanour, a felony or whatever the equivalent is over there—sorry, I do not have the terminology. You could make it illegal to interfere with a patient’s right to make this choice. We stopped short of that in our most recent addendum to our law here, but I think that was a lost opportunity.
Q
Dr Kaan: You characterised it correctly in that I think that for people who have capacity, and who are making the decision to have this as an option, a part of their reasoning is that they want to save their family from an onerous caregiving experience. I think that is their right and it is part of their value system.
Of course, if that is the only reason, we are going to be exploring that. As Dr Spielvogel has said, that is a red flag. We are going to be exploring that, and exploring whether acceptable alternatives exist and what are the resources that the person may not be aware of. That is always part of the discussion. These discussions are always broad and multifactorial. But I think it is appropriate and okay for somebody to say, “I do not want my family to experience what I myself had to experience when I was caregiving for my elderly parents with dementia.” I have heard that many, many times. I do think people who have capacity should have their autonomy respected, in terms of the values that are driving them to make this decision.
We always want to work towards improving the social support for caregiving that exists in our society. There is certainly a lack of it here in the US, and probably there in the UK as well. Hand in hand with allowing people to make an informed decision about the option of having an assisted death, you should also be a strong advocate for social support and caregiving services at the end of life, because those really are important and needed.
Q
Dr Spielvogel: That is a good question. I do not know the specific status of the Bill, but I would assume that it has itself undergone an assisted death at this point. That Bill is not really being supported by any of our advocacy groups or, by and large, the physicians who perform assisted dying, because it is, as you mentioned, very broad and not aligned with how we feel standard practice is going and where we would want it to go. That Bill did not receive support from many of us.
Q
Dr Spielvogel: Can you clarify what you mean about kidney disease and the six month prognosis, and the interplay with insurance there?
Q
Dr Spielvogel: That is not factually accurate. When people go on dialysis, they automatically get Medicare, which is our version of the NHS, more or less. That is a national health insurance for people who are 65 and older or who have certain kinds of diseases. When you have end stage kidney disease and you need dialysis, you automatically get Medicare and you get dialysis for the rest of your life, however long that is. People are often on dialysis for years. It is not that you are on it for six months and then you are off.
Q
Dr Spielvogel: We were just talking about kidney disease.
Q
Dr Spielvogel: If you have a six month prognosis to live, regardless of the condition, that would fall under this. That would make you eligible. That has nothing to do with insurance coverage for your condition. Insurance coverage is completely separate. It is not tied to this. All that prognosis does is to allow the individual to seek this care.
Q
Dr Spielvogel: No. Insurance does not run out. There is maybe a misunderstanding of how medical insurance works in the US. Medical insurance does not run out. I think we are talking about two different things.
Q
Dr Spielvogel: No, I actually do not think that you are right. When we are talking about lifesaving interventions such as chemotherapy or dialysis, that is not correct. They are bound by law to cover all things that are medically necessary. They do not say, “You have gotten six months of chemo. We are not paying for any more.” That is not how it works.
Q
We heard from experts earlier about the paucity and lack of provision of care across the country. Certain people can get access to very good care, but too many people struggle to, particularly people of certain ethnic backgrounds, people on low income, and so on. Please correct me if I have misinterpreted your views, but from what you have said so far, it sounds as if you think that exercising the right to assisted dying because there is a paucity of appropriate care in your locality, or because you cannot afford it, is a perfectly legitimate exercise of autonomy, based on the society around you. Would that be a fair assumption of your views?
Dr Kaan: I think that is not an entirely fair representation of what I am saying. Yes, we do need respect for people’s autonomy and the reasons they may come to this choice, but I also think that from what I have heard this morning, it sounds like there is a conception that people choose assisted dying and then they do it. What I see, by and large, is that people want to have this as an option. It is an option among the other options of hospice palliative care or palliative treatments. The availability of this as an option often brings people tremendous relief from their suffering—just from the anxiety over how they might die, or what suffering might be in store.
I had a case of a woman with ALS, or amyotrophic lateral sclerosis. She was very afraid of how she might die with that condition, and she felt like she might suffocate to death. She was so focused on having the option of aid in dying because she was terrified of what might be in store for her. We were able to incorporate her into a hospice that offered comprehensive end of life care, including the option of aid in dying. We got her through the process, we had the medications available and she told me how much relief she felt from having it as an option, but ultimately she decided not to use it. She decided that she was getting really good care from her palliative care and hospice teams, and that her symptoms were well controlled. Although she was extremely grateful that she knew the medications were available should she decide to use them, she did not end up needing to use them or wanting to use them.
That is the reality of what is happening in a lot of cases where this is an option among other options. The availability of this option is, in and of itself, a palliative care treatment for many people. On whether or not wanting to avoid being “a burden” to a family member or to a caregiving team is a valid reason to pursue this, yes, I think that is a valid reason among many for people who have a value system that highly orders that.
Dr Spielvogel: I just wanted to add something, if I may. I have heard this argument—or rather, this concern—a few different times, and it strikes me as what is called a false dilemma logical fallacy: that there is either/or, when in reality there are many alternatives that people can choose from. Saying “If we don’t have all of these types of care, we shouldn’t offer this option” is like a hospital that does not have sufficient amounts of IV pain medications saying to a labouring woman, “Well, we don’t have enough IV pain medications, so we are not going to offer you a labour epidural, because that is a false choice.” That does not actually make sense.
Look at it from a patient’s perspective. Think about a patient who is dying from terminal cancer, is in lots and lots of pain and does not have any good options for their pain control. Imagine saying to that person, “We don’t have all of this care or this option over here available to you, so we are not going to allow you to have an assisted death”, even if they are telling you, “This is what I want. Why won’t you give this to me?”. It does not make sense to remove this as an option just because all of the options might not be available to everyone all of the time. It is a bit cruel when you think about it from a patient’s perspective.
We have two minutes left before the evidence session finishes. Dr Simon Opher, please ask a very quick question and perhaps we could have a short response. I do not want to interrupt our witnesses at the end.
Q
Dr Spielvogel: I literally had not formed any kind of opinion on this. When I was in medical school, it was not talked about. We did not talk about it; we did not discuss it; it just literally was not a thing, and then when it became law in California, I still had not really thought of it until my medical institution asked me whether I wanted to participate. I said, “Sure, I will give it a try,” and then with my first patient, I saw how amazingly transformative it was for him and his family. I had seen lots of death before then; I saw how tragic and traumatic it often was and how this was a dramatically different experience, and I became a convert.
Since then, I have seen many other physicians undergo the same journey with their patients. They have been very ambivalent to it until they have a patient who is asking for it. They go through it with that patient who they have known for a long time, and then they come out on the other end realising just how amazing this option is to the people who want it. Again, I am emphasising that this is a choice. For people who do not want this, they do not need to have it. For doctors who do not want to do it, they do not have to do it. But for the patients who want this, it is an incredibly powerful piece of agency.
Dr Kaan: The jurisdictions I work in have quite a bit more experience. In Oregon, of course, it has been legal since 1997, and it has been legal in Washington state since 2008. Both of those laws were actually started by voter referendum, so the general populace at large wanted this, and that is how these laws got started in both of those states. The general population has, by and large,, been supportive, and is growing more and more supportive of this as an option each year as it becomes normalised and clear that this is a practice which is careful, safe and has appropriate safeguards in place.
The medical community has also come along with that. In Washington state, we have now 15 years of practice with assisted dying. When this law was first passed, there was hesitancy in the medical community: this was an unknown, in many regards. We were the second state in the entire United States to pass this law and so the medical community was a bit hesitant. I will say that, in those last 15 years, we have seen a tremendous growth in the support of physicians and the medical community at large in wanting to make sure that this is an option for people and that they have access. Just in my own experience in Washington state—
Order. I am sorry; I hope this does not sound rude, Dr Kaan —regrettably, there are procedures in Parliament that require me to do this—but we have come to the end of the allotted time for the Committee to ask questions. I thank the witnesses Dr Spielvogel and Dr Kaan for your contributions and time. This was very valuable.
Thank you to our witnesses and for all the contributions, and for your forbearance on this very sensitive subject.
On a point of order, Mr Dowd. I wonder, given the fact that we have had so many really helpful conversations and questions but not enough time for everybody to ask everything they wanted, whether it would be appropriate for Members who want to write to witnesses to ask for follow up information or further questions could do so through the Committee, rather than us all deluging the witnesses with our own messages, some of which will duplicate each other. I appreciate that there is a capacity question for the Clerks, but it might be appropriate to ask the Speaker for a bit more resource to enable that to happen. I think that the hon. Member for Spen Valley broadly supports the idea; I do not know if others do, as well.
Let us be clear. Witnesses can submit written evidence until the Committee reports to the House. It is open to Members to individually write to witnesses and invite them to give written evidence, if they so wish. My advice to the hon. Member is that if he wishes to look at this in a more formal way or through a more formal mechanism, he is to speak to the Committee Clerks, because it is beyond my remit.
We now come to motions (a) to (d) amending the sittings resolution tabled by the Member in charge. I have selected the amendment tabled to motion (a) and will group all four motions and the amendment for debate. I will first call Kim Leadbeater to move motion (a), then Naz Shah to move the amendment. The scope of the debate is all four motions and the amendment.
I beg to move amendment (a), in the list of witnesses set out in the table in the sittings resolution agreed by the Committee on 21 January 2025, after Mencap (Thursday 30 January, until no later than 5.00 pm), leave out “Representative of Senedd Cymru” and insert— “Professor Emyr Lewis (Emeritus Professor, Department of Law and Criminology, University of Aberystwyth), Royal College of General Practitioners, Royal College of Psychiatrists.”
With this it will be convenient to discuss motions (b) to (d).
These amendments allow additional witnesses to be called to give oral evidence, including representatives from Disability Rights UK, the Royal College of General Practitioners, the Royal College of Psychiatrists, and an expert in Welsh devolution and constitutional matters.
As the sessions today have shown, hearing from expert witnesses is an extremely important part of this process, so I hope I have the support of the Committee in making these additions. On the motion to call additional witnesses tabled by my hon. Friend the Member for Bradford West, I respect the suggestion but I am confident that we have an eminently qualified witness to cover issues of coercion and domestic abuse in Professor Jane Monckton Smith, who was suggested by my hon. Friend.
We have also heard today—and will hear from many witnesses over the next few days—from medical doctors, social workers, nurses, palliative care experts and geriatricians. That is around 50 witnesses in total. While I fully appreciate that a wide range of additional charities and organisations has valuable contributions to make, I would encourage them to submit written evidence so that the Committee has the benefit of their thoughts.
Regarding the start of the line by line scrutiny of the Bill, given the huge volume of evidence—both oral and written—that we have received and are still receiving, I have consulted with colleagues across the Committee and there is a consensus that having next week to absorb and evaluate the evidence, and to prepare any amendments in light of it, is extremely important. Consequently, we would begin line by line scrutiny on Tuesday 11 February, as per the amendment.
I hope that these amendments demonstrate the robust approach that the Committee and I are taking to our work, and I encourage colleagues to support them.
I beg to move an amendment to motion (a), at end insert— “Richard Robinson, CEO of Hourglass, Cherry Henry Leach of STADA, Standing Together Against Domestic Abuse ”.
I completely agree with my hon. Friend the Member for Spen Valley and I am grateful to her for adding Professor Jane Monckton Smith to the witness list. I also absolutely agree that the evidence we receive is really valuable.
This is an amendment tabled yesterday by the Mother of the House, my right hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) yesterday, to which I have added my name.
The reason for the amendment is that Hourglass focuses on domestic abuse of older people and it has particularly noted that the majority of such victims are female. Hourglass estimates that one in six elderly people are victims of coercion in the UK. This raises serious concerns that such people could be pushed into ending their lives if the Bill is enacted. Hourglass has not published a public opinion on the Bill.
Standing Together Against Domestic Abuse has said that “We must echo concerns raised by the VAWG sector”— the violence against women and girls sector— “and disability activists about the bill’s current safeguards. There is insufficient clarity on what constitutes coercion and limited reflection on carer capacity to support someone terminally ill. Without robust measures, there is a real risk that assisted dying could be exploited as a tool for coercion or even femicide.
Statistics show that over 88% of unlawful ‘mercy killings’ are perpetrated by men towards women, often involving violent means. These troubling realities demand urgent consideration in shaping this legislation.
We also highlight the health sector’s role in identifying domestic abuse. With 80% of victim survivors having their first or only point of contact in healthcare, it is critical that health professionals are equipped to identify and respond to abuse.
We call on the Government to ensure the proposed bill includes stringent safeguards and that healthcare systems are equipped to recognise and prevent the potential misuse of assisted dying. Femicide is already a crisis in the UK, and no law should inadvertently contribute to its escalation.”
All my adult life, I have had experience of dealing with domestic abuse and coercion, and I draw on that experience to speak to these amendments. Although Professor Jane Monckton Smith is an expert, she is an academic. These two organisations work with people who have been victims of abuse.
In addition, we had an official meeting with the Clerk to discuss the proposals for Committee sittings. It was said at that meeting that we would only have witnesses who would give evidence, particularly in person, that would contribute to the deliverability and the workability of the Bill. Since then, we have had families added to the list of witnesses. That adds weight to the argument that we should have witnesses who are providing a service to victims directly.
I, too, support my hon. Friend the Member for Spen Valley and in particular I want to highlight the helpful addition of Kamran Mallick of Disability Rights UK. That augments an already comprehensive list of expert disabled people, which includes: Professor Tom Shakespeare, an internationally renowned disability rights academic; Dr Miro Griffiths, a Disability Studies scholar at the University of Leeds; and Chelsea Roff, the founder of Eat Breathe Thrive. On the panel, we will also have a representative of the Equality and Human Rights Commission, who will be able to give a good overview on the intersection between protected characteristics. Finally, there will be Jon Sparkes, the representative of Mencap.
I am really pleased that my hon. Friend has worked so hard to ensure that the voices of disabled people are integrated across a number of the panels that we will see over the next two days, and the addition in her amendment is really helpful. I commend her for it.
I, too, support the amendment proposed by the hon. Member for Spen Valley, and in particular the addition of Jane Monckton Smith. I have read her book; it is definitely worth a read and is pretty alarming. I will address why I do not think the Committee should support the amendment to the amendment tabled to add other witnesses.
Jane Monckton Smith has done a huge amount of research in the area, and as well as being an academic who specialises in coercion and femicide—and the impact that coercion has on femicide—she is a former police officer, so has significant frontline experience. As part of her research she will have spoken with and interacted with many of the groups that the hon. Member for Bradford West is proposing to include—although maybe not specifically. I would prefer it if we stuck with the list that the hon. Member for Spen Valley has put forward, and not add the additional witnesses proposed.
I agree with my hon. Friend the Member for Spen Valley. Having agreed to extend the time on Thursday to hear devolution issues and from the Royal College of General Practitioners and the Royal College of Psychiatrists, by adding two further witnesses, the amendment to the amendment would reduce the time available on those options. In an ideal world we would like to hear from all sorts of people. The option of written evidence is available. We have got other evidence, and I want to ensure that Thursday’s session is focused on the proposals that my hon. Friend has made.
There is nothing in my amendment that suggests Professor Monckton Smith is not capable in her expertise. I am asking for other expertise to be brought to the table. Yes, there is the argument that people can submit written evidence—but so could every witness we have heard from today, and that we will hear from tomorrow and the day after. If that is the yardstick, is this just a tokenistic exercise? I would argue that for women in particular, who are the victims of domestic abuse—
I note that Laura Hoyano, who is giving evidence on Thursday, is a domestic abuse barrister. She has also been involved in inquiries on child sexual abuse, and has a great range of experience in that area. She will bring that to the table as a practising barrister working closely on such cases.
I welcome my hon. Friend’s intervention and I recognise Laura Hoyano’s expertise. I would respectfully push back that, as a victim of domestic violence—as a person who has experienced it and campaigned on it for all my adult life—there is a difference between an academic who has studied it and people who have worked with victims, in particular elderly women. The expert is a barrister with experience of young people and children and domestic abuse, and Professor Monckton Smith is also an academic—yes, she has been a police officer—but I would value a witness who has worked with victims of domestic abuse. That is all I have to say on it.
Question put, That the amendment be made.
Question negatived. Main Question put and agreed to. Resolved, That in the list of witnesses set out in the table in the sittings resolution agreed by the Committee on 21 January 2025, after “Professor Aneez Esmail (University of Manchester)” insert “Disability Rights UK”.—(Kim Leadbeater.) Resolved, That in the list of witnesses set out in the table in the sittings resolution agreed by the Committee on 21 January 2025, after “Dr Lewis Graham (University of Cambridge),” leave out “John Kirkpatrick” and insert “Baroness Falkner”.—(Kim Leadbeater.) Resolved, That in paragraph (2) of the sittings resolution agreed by the Committee on 21 January 2025, after “Wednesdays” insert “starting on 11 February 2025”.—(Kim Leadbeater.) Ordered, That further consideration be now adjourned. —(Kit Malthouse.) 5.30 pm Adjourned till Wednesday 29 January at twenty five minutes past Nine o’clock. Written evidence reported to the House TIAB 01 Ben Scott TIAB 02 Michael Vidal TIAB 03 Compassion in Care TIAB 03(a) Compassion in Care (further evidence)
TIAB 04 Dr George Gillett, an NHS doctor and psychiatrist TIAB 05 Dr Stephen Hutchison MD TIAB 06 Dr Andrew Boorne TIAB 07 Jess Carrington, Registered Social Worker and Best Interests Assessor TIAB 08 Greg Lawton MPharm MRPharmS FFRPS MBCS LLM, Barrister and Pharmacist TIAB 09 Australian Care Alliance TIAB 10 Dr Peter Knight TIAB 11 Dr Isky Gordon FRCR, FRCP, Emeritus Professor Paediatric Imaging, UCL, London TIAB 12 Dr Peter O’Halloran, RN, PhD, Registered Nurse, Senior Lecturer, Queen’s University Belfast, Researcher in chronic illness, palliative and end of life care TIAB 13 Rose TIAB 14 Dr Rachel Fisher TIAB 15 Nigel Andrew Gordon Jones, a retired Consultant General Surgeon TIAB 16 St Gemma’s Hospice TIAB 17 Sir Nicholas Mostyn TIAB 18 Leah Locke TIAB 19 Alison Taylor TIAB 20 Dr Katharine Crossland TIAB 21 John Forrester TIAB 22 Don Stickland TIAB 23 Christina Blandford Beards TIAB 24 Society for the Protection of Unborn Children (SPUC)
TIAB 25 Catholic Bishops’ Conference of England and Wales TIAB 26 British Association of Social Workers TIAB 27 Plunkett Centre for Ethics: A centre of Australian Catholic University located at St Vincent’s Hospital Sydney TIAB 28 Dame Sarah Mullally, Bishop of London, Lead Bishop on Health and Social Care for the Church of England and former Chief Nursing Officer for England on behalf of the Bishops of the Church of England and the Archbishops’ Council TIAB 29 Cicely Saunders International TIAB 30 Lejeune Clinic for Children with Down Syndrome TIAB 31 Voice for Justice UK TIAB 32 Get on Downs - a Down Syndrome Support Group TIAB 33 British Medical Association (BMA)
TIAB 34 Portsmouth Down Syndrome Association TIAB 35 Better Way campaign TIAB 36 Hospice UK TIAB 37 Association of Catholic Nurses for England and Wales TIAB 38 East Midlands Palliative Medicine Consultants and Specialty Doctors TIAB 39 Marie Curie Palliative Care Research Department, University College London (UCL)
TIAB 40 Humanists UK TIAB 41 Nuffield Council on Bioethics’ (NCOB)
TIAB 42 Marie Curie TIAB 43 LOROS, the Leicestershire and Rutland Hospice TIAB 44 Professor Emeritus Sam H Ahmedzai TIAB 45 Professor Nancy Preston, Professor of the International Observatory on End of Life Care, Lancaster University; and Professor Suzanne Ost, Law School, Lancaster University TIAB 46 Professor Alex Ruck Keene KC (Hon)
TIAB 47 Anureg Deb and Dr Lewis Graham TIAB 48 Australian Centre for Health Law Research, Queensland University of Technology, Australia TIAB 49 The Bios Centre TIAB 50 The Orders of St John Care Trust TIAB 51 Living and Dying Well TIAB 52 Professor Katherine Sleeman, King’s College London TIAB 53 British Islamic Medical Association (BIMA)
TIAB 54 Joint written evidence submitted by Chelsea Roff (Eat Breathe Thrive, UK), Dr Angela Guarda (Johns Hopkins University School of Medicine, US), Dr Philip Mehler (University of Colorado School of Medicine, US), Dr Patricia Westmoreland (University of Colorado, US), Dr Scott Crow (University of Minnesota, US), Dr Catherine Cook Cottone (University at Buffalo, SUNY, US), Dr Anita Federici (York University, Canada), and Dr Agnes Ayton (Oxford Health NHS Foundation Trust, UK)
TIAB 55 Professor Allan House TIAB 56 National Care Forum (NCF)
TIAB 57 AtaLoss TIAB 58 Compton Care TIAB 59 Dr Odette Spruijt, Medical Director, Launceston Specialist Palliative Care Service TIAB 60 Rachel Pegrum, Independent Social Worker TIAB 61 Abdul Rahman Badran TIAB 62 Alan Thomas, Professor of Old Age Psychiatry, Director of Brains for Dementia Research, Translational and Clinical Research Institute, Faculty of Medical Sciences, Newcastle University TIAB 63 Dr Julian Neal TIAB 64 Dr Raymond Towey TIAB 65 Multiple System Atrophy Trust TIAB 66 Dr Adrian Tookman TIAB 67 Royal College of Psychiatrists TIAB 68 UK Medical Freedom Alliance TIAB 69 Association of Anaesthetists TIAB 70 Catholic Union of Great Britain TIAB 71 My Death, My Decision TIAB 72 Health Advisory and Recovery Team (HART)
TIAB 73 Kyam Maher MLC, the Attorney General of South Australia, in his capacity as a member of the Legislative Council of South Australia TIAB 74 Dr Calum MacKellar, Director of Research, Scottish Council on Human Bioethics TIAB 75 Christian Medical Fellowship TIAB 76 Christian Medical and Dental Association of Canada TIAB 77 Christian Legal Centre TIAB 78 Written evidence submitted on behalf of a group of anorexia nervosa sufferers and carers TIAB 79 Dr Angelika Reichstein, Associate Professor in Law, University of East Anglia TIAB 80 Dr David Randall TIAB 81 Cruse Bereavement Support TIAB 82 Compassion in Dying TIAB 83 General Medical Council (GMC)
TIAB 84 Pathfinders Neuromuscular Alliance TIAB 85 Royal Pharmaceutical Society TIAB 86 Motor Neurone Disease Association TIAB 87 Dr Simon Eyre TIAB 88 Macdonald Amaran TIAB 89 Patrick Pullicino TIAB 90 Luis Espericueta, Researcher and lecturer in bioethics at the University of Granada, Spain TIAB 91 Healthcare Professionals for Assisted Dying TIAB 92 PSP Association (PSPA)
TIAB 93 Association for Palliative Medicine of Great Britain and Ireland (APM)
TIAB 94 Academy of Medical Royal College's TIAB 95 Care Not Killing TIAB 96 Dr Alexandra Mullock, Senior Lecturer in Law TIAB 97 Rt Hon. Sir Stephen Sedley TIAB 98 Carole O’Reilly TIAB 99 Dr Hannah Denno TIAB 100 Prof B Anthony Bell MD, Neurosurgeon, University of London TIAB 101 Matthew Hoyle, Barrister TIAB 102 Royal College of Nursing
The Committee consisted of the following Members:
Chairs: Mr Clive Betts, Sir Christopher Chope, Sir Edward Leigh, † Graham Stringer
† Atkinson, Catherine (Derby North) (Lab)
† Baines, David (St Helens North) (Lab)
† Bishop, Matt (Forest of Dean) (Lab)
Chowns, Ellie (North Herefordshire) (Green)
† Collinge, Lizzi (Morecambe and Lunesdale) (Lab)
† Foody, Emma (Cramlington and Killingworth) (Lab/Co op)
† Foxcroft, Vicky (Lord Commissioner of His Majesty's Treasury)
† Hayes, Tom (Bournemouth East) (Lab)
† Hinds, Damian (East Hampshire) (Con)
† McKinnell, Catherine (Minister for School Standards)
† Martin, Amanda (Portsmouth North) (Lab)
† Morgan, Stephen (Parliamentary Under Secretary of State for Education)
† O'Brien, Neil (Harborough, Oadby and Wigston) (Con)
† Paffey, Darren (Southampton Itchen) (Lab)
† Sollom, Ian (St Neots and Mid Cambridgeshire) (LD)
† Spencer, Patrick (Central Suffolk and North Ipswich) (Con)
† Wilson, Munira (Twickenham) (LD)
Simon Armitage, Rob Cope, Aaron Kulakiewicz, Committee Clerks
† attended the Committee
Public Bill Committee
Tuesday 28 January 2025
(Morning)
[Graham Stringer in the Chair]
Children’s Wellbeing and Schools Bill
Clause 7
Provision of advice and other support
I beg to move amendment 23, in clause 7, page 12, line 13, at end insert — “(3A) Where staying close support is provided, it must be provided with due regard to the wishes of the relevant person and a record must be kept of that person’s wishes.”
This amendment would require local authorities to take account of the wishes of the relevant young person when providing staying close support, and keep a record of those wishes.
With this it will be convenient to discuss the following: Amendment 40, in clause 7, page 12, line 22, at end insert— “(vi) financial support; (vii) financial literacy”
Amendment 41, in clause 7, page 12, line 28, at end insert— “(c) the provision of supported lodgings, where the young person and local authority deem appropriate.”
Clause stand part.
It is a pleasure to serve under your chairmanship, Mr Stringer. As we return to our work on the Bill with clause 7, I want to say that it is still a bit disappointing that we have been through Second Reading, and here we are on the third day of Committee, and we still do not have the impact assessment for the Bill, which could potentially answer some of the questions that we will be raising today. I know the Ministers want to do the right thing in trying to get it out of the relevant committee and published, and I hope they can succeed in doing that pretty soon.
On clause 7, no reasonable person would argue that a young person leaving care does not require some support to live independently. Young people who have not been in care often require years of support to live independently, and they are less likely to be doing so away from home and will be in less difficult circumstances. Again, the Opposition support the Government’s objectives in this clause to provide staying close support, but we have some questions about how it is to work in practice.
First, the Bill gives discretion to the local authority on whether this support is in the best interests of a young person’s welfare. Surely the assumption should be that the support is offered, and it should be the exception to withhold it. One advantage in having the onus turned round would be that the local authority would have to record and explain decisions not to offer that kind of support. What sort of criteria are the local authorities supposed to use to make those choices, and will that be consistent across the country?
Secondly, there is also a question about the process for identifying the person who is to help the young person. The Department’s policy summary quite rightly talks about identifying a “trusted person”, which is obviously very important to this kind of young person. By definition, some young people in care have pretty good reasons not to trust adults around them, so how are local authorities to go about identifying such a “trusted person”? Thirdly, and this is a small point, will there be digital options to support young people? These days, that is clearly the most frequent method that young people use to get information, particularly sensitive information. It gives young people a choice of how they find their information, and there is potentially an opportunity for some good practice here in setting up a good way of communicating with their trusted person.
That leads me to a wider point. As we have gone through this Bill, and we will continue to make this point, there is a risk that local authorities, when confronted with these new duties, will obey the letter of the law, but will they really fulfil the spirit and good intent of Ministers in passing the Bill? Can the Minister be clear that this is not supposed to be just another signposting service? As young people leave care, they need personal advocates who can help them articulate their needs with other agencies, not a phone number or email address to contact. They do not really need more leaflets; they need a human being who can be trustworthy and provide practical help and advice. Signposting can quickly turn into a doom loop dead end and no help. How does the Minister also envisage the involvement of local charities, some of whom will have had quite long term links with the young person in care, and how will that be funded?
I will come on to this point on other amendment, but I ask here what the Minister makes of the call from the Our Wellbeing, Our Voice coalition for a national wellbeing measurement of care leavers. That would obviously support some of those points.
Does the Government plan to accept the recommendation of the Family Rights Group to offer lifelong links to all care leavers to help them have better relationships with those that they care about? Again, is there an opportunity here? Many constituency MPs will know people who have been in care and then become carers. There is this cycle—I know several people like this, and I will talk about one of them later on today. If we are getting into the business of continuing relationships after leaving care, which is a good thing, I wonder whether that can become something bigger—a lifelong connection, for those who want it, obviously, as a way of getting much needed carers to stay in the system.
There is a risk that these measures are all very local authority focused rather than focused on the needs of the young person. Amendment 23 would ensure that the voice of the child is heard and that we have the information that we need to allow for continuous improvement. It is very light touch. Keeping a record of the person’s wishes would help to protect against the loss of knowledge when personnel change. If things are written down, it is easier for a new person to come in and pick up and understand a bit about what that young person has said they want. In the longer term, it also provides a resource for learning and performance improvement. I talked in the previous session about kaizen and continuous improvement. The amendment is designed to support that, to improve continuity and to make sure that the voice of the young people for whom this very sensible form of care is to be provided is heard.
It is a pleasure to serve under your chairmanship, Mr Stringer. I rise to support clause 8 stand part. [Interruption.] Sorry, my mistake.
It is a pleasure to serve under your chairmanship, Mr Stringer. The Liberal Democrats welcome the new requirements on local authorities in the clause to assess whether certain care leavers aged under 25 require the provision of staying close support. The charity Become, which supports care experienced children, has found that care experienced young people are nine times more likely to experience homelessness than other young people and that homelessness rates for care leavers have increased by 54% in the last five years. This is a really important clause.
Amendment 40 deals with the definition of staying close support. It uses the existing definition of the services, which should be set out in the local offer from local authorities. Become’s care advice line has found that care leavers are often unaware of the financial support available from the local authority, such as council tax discounts, higher education bursaries and other benefits. That can lead them to face unnecessary financial hardship. That is the reason for the financial support part of the amendment.
More generally, financial literacy can have a huge negative impact on care leavers, who are more likely to live independently from an earlier age than their peers—they are not necessarily living with parents or guardians. We would really like to see local authorities lay out that financial literacy support to help them understand what is available to them.
Amendment 41 would add information about supported lodgings to the list of available support services. Supported lodgings are a family based provision within a broader category of supported accommodation. A young person aged 16 to 23 lives in a room within their supporting lodgings, which are the home of a host, who is tasked with supporting the young person as they go towards adulthood and independence, giving them practical help and teaching them important life skills such as financial literacy, budgeting and cooking. Requiring local authorities to signpost care leavers to any of the supported lodging provisions in their area could make a real difference to those young people and their lives, so I would really appreciate support for the amendment.
I will speak to amendments 23, 40 and 41 and to clause 7.
Amendment 23 was tabled by the hon. Members for Harborough, Oadby and Wigston and for Central Suffolk and North Ipswich, and I thank them for it. The amendment draws attention to an important principle that must run through the whole approach that local authorities take to listening and responding to the wishes and feelings of their care leavers. When a local authority is assessing what staying close support should be provided to a young person, it should have regard to their wishes, which is why we intend to publish statutory guidance that will draw on established good practice that we want all local authorities to consider. It will cover how that will work, with interconnecting duties, especially the duty to prepare a pathway plan and keep it under a review. In developing and maintaining the plan and support arrangements, there is a requirement for the care leaver’s wishes to be considered.
In response to the specific questions raised by the hon. Member for Harborough, Oadby and Wigston, as I said, pathway planning is already a statutory requirement to eligible care leavers, so the statutory guidance will set out how and when care leavers should be assessed based on their own needs and using the current duties to support care leavers with reference to a trusted individual. Those individuals will often already be known to the young person, such as a former children’s home staff member, and that will clearly be set out in the statutory guidance. We will base that on the best practice that we see already in train.
On the lifelong links, we are currently funding 50 family finding, befriending and mentoring programmes, which are being delivered by 45 local authorities. The programmes will help children in care and care leavers to identify and connect with important people in their lives, improving their sense of identity and community and creating and sustaining consistent, stable and loving relationships. I recognise the points that the hon. Gentleman made. The Department for Education has commissioned an independent evaluation of the family finding, befriending and mentoring programme, which will inform decisions about the future of the programme and how it will work.
On amendment 40, each care leaver will have their own levels of need and support. Local authorities have a duty to assess the needs of certain care leavers and prepare, create and maintain a pathway for and with them. Statutory guidance already makes it clear that the pathway planning process must address a young person’s financial needs and independent living skills. Where eligible, they will be able to have access to financial support and benefits as well as support to manage those benefits and allowances themselves. That will be strengthened by the support made available through clause 7, including advice, information and representation, to find and keep suitable accommodation, given that budgeting and financial management issues can be a significant barrier to maintaining tenancies for many care leavers. That will include advice and guidance to local authorities to aid in the set up and delivery, building on best practice of how current grant funded local authorities are already offering support to access financial services and financial literacy skills for their care leavers.
To respond to amendment 41, we know that some care leavers may not feel ready to live independently straight away; that is where supported lodgings can offer an important suitable alternative. They are an excellent way for individuals with appropriate training to offer a room to a young person leaving care and a way for that young person to get the practical and emotional support to help them to develop the skills they need for independent living. We will continue to encourage the use of supported lodgings for care leavers where it is in the best interests of the young person.
However, we do not feel that amendment 41 is needed. Clause 7(4)(a) specifies that staying close support includes help for eligible care leavers “to find and keep suitable accommodation”.
That will include support to find and keep supported lodgings where the young person and the local authority consider it appropriate. We will make that and other suitable options absolutely clear in statutory guidance, building on the best practice from the current staying close programme.
It is good to hear that supported lodgings will be referred to in statutory guidance. I heard from the charity Home for Good, which is involved in setting up those networks of local authorities that provide supported lodgings, that in some local authorities money for supported lodgings cannot be found, because the local authority thinks that fostering money cannot be used for supported lodging and that it cannot use staying close support. Real clarity that staying close support funding can be used for supported lodgings is important to make this option work.
I appreciate the hon. Lady’s interest in this matter. We will produce the statutory guidance to make all this absolutely clear.
Before I come to clause 7 stand part, I want to respond to an additional question from the hon. Member for Harborough, Oadby and Wigston that I did not answer earlier. He asked about digital options and, as someone standing here using an iPad, I recognise the importance of that, particularly for young people. The local authorities already work with a range of digital options to connect with their care leavers, and we would certainly expect that to continue, and expect good practice to continue being developed and to be set out in the statutory guidance.
Turning to clause stand part, clause 7 requires each local authority to consider whether the welfare of former relevant children up to the age of 25 requires staying close support. Where this support is identified as being required, the authority must provide staying close support of whatever kind the authority considers appropriate, having regard to the extent to which that person’s welfare requires it.
Staying close support is to be provided for the purpose of helping the young person to find and keep suitable accommodation and to access services relating to health and wellbeing, relationships, education and training, employment and participating in society. This support can take the form of the provision of advice, information and representation, and aims to help to build the confidence and skills that care leavers need to be able to live independently.
The new duties placed on local authorities by this clause will not operate in isolation. They will be part of the existing legislative framework, which sets out the duties that every local authority already owes to its former children in care aged 18 to 24. This clause enhances and expands the arrangements for those children by supporting them to find long term stable accommodation and access to essential wraparound services. The new statutory guidance will set out what the new requirements mean for local authorities and will draw on established good practice—for example, the role of a trusted person to offer practical and emotional support to care leavers.
On that basis, I hope I can rely on the Committee’s support for clause 7.
I would like to push amendment 23 to a vote.
Question put, That the amendment be made.
4|0|5|11|The Committee divided:|Question accordingly negatived.||0|0
Clause 7 ordered to stand part of the Bill.
Clause 8
Local offer for care leavers
Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss new clause 40—National offer for care leavers— ‘In the Children and Social Work Act 2017, after section 2 insert— “2A National offer for care leavers (1) The Secretary of State for Education must publish information about services which care leavers in all areas of England should be able to access to assist them in adulthood and independent living or in preparing for adulthood and independent living.
(2) For the purposes of subsection (1), services which may assist care leavers in adulthood and independent living or in preparing for adulthood and independent living include services relating to— (a) health and well being; (b) relationships; (c) education and training; (d) employment; (e) accommodation; (f) participation in society.
(3) Information published by the Secretary of State under this section is to be known as the ‘National Offer for Care Leavers’.
(4) The Secretary of State must update the National Offer for Care Leavers from time to time.
(5) Before publishing or updating the National Offer for Care Leavers the Secretary of State must consult with relevant persons about which services may assist care leavers in adulthood and independent living or in preparing for adulthood and independent living.
(6) In this section— ‘care leavers’ means— (a) eligible children within the meaning given by paragraph 19B of Schedule 2 to the Children Act 1989; (b) relevant children within the meaning given by section 23A(2) of that Act; (c) persons aged under 25 who are former relevant children within the meaning given by section 23C(1) of that Act; (d) persons qualifying for advice and assistance within the meaning given by section 24 of that Act; ‘relevant persons’ means— (a) such care leavers as appear to the Secretary of State to be representative of care leavers in England; and (b) other Ministers of State who have a role in arranging services that may assist care leavers in or preparing for independent living.”’
This new clause would introduce a new requirement on the Secretary of State for Education to publish a national offer detailing what support care leavers are entitled to claim by expanding the provisions in the Children and Social Work Act 2017 which require local authorities to produce a “Local offer”.
I will speak to clause 8. Expert reviews have shown that many care leavers face barriers to securing and maintaining affordable housing. Too many young people end up in crisis and experiencing homelessness shortly after leaving care. Although housing and children’s services departments are encouraged in current guidance to work together to achieve the common aim of planning and providing appropriate accommodation and support for care leavers, that is not happening consistently in practice.
To enable better joined up planning and support for care leavers, the clause will require local authorities to publish their plans, setting out how they will ensure a planned and supportive transition between care and independent living for all care leavers. Our aim is for local authorities to co ordinate and plan the sufficiency of care leaver accommodation, to plan for the right to accommodation for each individual, and to make early, clear planning decisions that are right for each care leaver’s needs.
The clause specifies that the information that the local authority is required to publish includes information about its arrangements for enabling it to anticipate the future needs of care leavers; for co operating with local housing authorities in assisting former relevant children under the age of 25 to find and keep suitable accommodation; for providing assistance to former relevant children under the age of 25 who are at risk of being homeless, or who are released from detention, to find and keep suitable accommodation; and for assisting former relevant children aged under 25 to access the services they need.
The question about securing and keeping accommodation is incredibly important for care leavers; it is closely linked to what the hon. Member for St Neots and Mid Cambridgeshire was saying about financial capacity. What are the Minister’s thoughts on what the default position should be for care leavers in receipt of universal credit? Should there be automatic rent payments from universal credit, or should it be for the individual to manage? Obviously that can change in individual cases, but what should be the default and what discussions has she had with the Department for Work and Pensions?
As the right hon. Gentleman will know, we work on a cross Government basis. We have regular conversations with colleagues in various Departments to ensure that the offer we provide to care leavers will give them the best chance to live independently and that the approach of other Departments to these matters complements and co operates with what this legislation is intended to achieve.
The right hon. Gentleman raises a specific and quite technical question that relates to the work of the Department for Work and Pensions. As I will come on to, we are working hard to re establish the ministerial working group to support these young people. I am certain that this matter can be carefully considered as part of that work, so I will take it away and feed it on to colleagues. Given the importance of the clause and the changes it will bring to how local authorities work with children leaving care or young people under the age of 25 who have been in care, I urge the Committee to support it.
I turn to new clause 40, tabled by the hon. Member for North Herefordshire, who I believe is not present today.
I am told that she is unwell.
Do I still respond to the clause?
It is within the scope of this debate, so the Minister may respond if she wishes to.
I am happy to respond to new clause 40, which would require the Secretary of State to publish a national offer for care leavers, mirroring the requirement on local authorities to publish their local offer. There are already examples of additional support provided for care leavers from central Government that complement the support provided by local authorities. Care leavers may, for example, be entitled to a £3,000 bursary if they start an apprenticeship and may be entitled to the higher one bedroom rate of housing support from universal credit.
We have re established the care leaver ministerial board, now co chaired by the Secretary of State for Education and the Deputy Prime Minister. It comprises Ministers from 11 other Departments to consider what further help could be provided to improve outcomes for this vulnerable group of young people.
I wonder whether that reconstituted group will pay particular attention to the role of enlightened employers. Bearing in mind the immense breadth of unique life experiences that many people with care experience bring to a business—it will benefit the young person as well as the business—will employers take an extra chance on a care leaver and give them that opportunity? Being in work and having a regular wage opens up so much else in life.
The right hon. Gentleman raises an important point and advocates powerfully for this vulnerable group of young people. There will indeed be representation on the ministerial group from various Government Departments, including the Minister for business—[Interruption.]
Order.
There will be a Minister from the Department for Science, Innovation and Technology. That area will form part of the discussions, I am sure, as the purpose of the group is to give the best chance to care leavers—this very vulnerable group of young people—and ensure that we as a Government are working collaboratively to make that effective.
We recognise how important it is that care leavers have clear information about the help and support they are entitled to, both from their local authority and central Government Department. We are therefore reviewing our published information to ensure that it is accessible and clear and that care leavers can quickly and easily understand and access all the support they are entitled to. Once that review has concluded, we will consider how best to publish this information. Therefore, I ask for the new clause to be withdrawn and urge the Committee to support clause 8.
This is a good and sensible clause, and the Opposition support its inclusion in the Bill. I would note that although all these clauses are good, they come with an administrative cost.
We have already discussed the importance of ensuring that the measures are properly funded, but I want to press the Minister for a few more insights on clause 8. There is a list of details about the local offer—that it must be published, must anticipate the needs of care leavers—and it refers to how they will co operate with housing authorities and provide accommodation for those under 25. This is all good stuff.
The discussion that we have just had prefigured the question that I wanted to ask, which is about co operation with national bodies. The clause is quite focused on co operation between local bodies and drawing up a clear offer. That is a good thing—although, obviously, some of those housing associations are quite national bodies these days.
In the “Keeping children safe, helping families thrive” policy paper published a while back, the Government set out an intention to extend corporate parenting responsibilities to Government Departments and other public bodies, with a list of corporate parents named in legislation following agreement from other Government Departments. When we were in government, we also said that we intended to legislate to extend corporate parenting responsibilities more broadly, so I wondered about that connection up to the national level. We have already had one excellent and very canny policy idea from my right hon. Friend the Member for East Hampshire about setting the default for care leavers when it comes to how their housing payments are made. The Minister raised a good point about bursaries and making sure that care leavers are clear about what is available to them on that front. However, there is a whole host of other opportunities to write in to some of these—
Will my hon. Friend also comment on the particular situation of those young people from care who go on to university? Of course, come the holidays the vast majority of people in higher education go home, but the situation is very different for those who have been in care. Some enlightened universities—including the University of Winchester, in my own county—do very good work in this regard, but will he expand a little on how those young people in higher education can be supported with the offer?
That excellent point is another example of exactly what we are talking about. In one sense, I regret not having an amendment that would insert a specific paragraph about the local offer from national organisations. On the other hand, it is pretty clear that the Minister is very interested in this question and is pursuing it. Anyway, there may even be scope to write that into the Bill as it goes through the Lords.
The DFE’s explanatory notes for the Bill say that, although the housing and children’s services departments are encouraged in guidance—in part 7 of the Children Act 1989, I think—to work together to achieve the common aim of planning and providing appropriate accommodation and support for care leavers, that is not happening consistently in practice; the Minister alluded to that.
My question to the Minister is: what do we know from current practice about where that does not happen and why not? It seems obvious, and something that every well intentioned social worker—every person who works with care leavers—would want to do. What does the good model of effective provision of that support look like? Are there local authorities that are the best cases of that?
Other than providing the administrative and legislative hook for better gripping of this issue, I do not know whether the Minister has a specific plan to do anything else to try to achieve it more consistently—given that, of all the different things that one wants to join up for the care leaver, the provision of a safe place to live and a stable housing arrangements is probably No.1. Is anything more being done? Does the Minister have thoughts about how that can be done best and where it is done best? Where it has not been done as well as we would hope, why is that?
I appreciate your patience, Mr Stringer—this is not the first time I have stumbled over Committee procedure and no doubt it will not be the last. I welcome the Minister’s comments and the inclusion of clause 8, which I strongly support. I want to address the sentiment of new clause 40 as well.
The extension of the requirements around accommodation, extending the Children and Social Work Act 2017, requires councils to publish that local offer. That is crucial. Many of us have served in local government; it is at that local level that these crucial services, which can often make or break opportunities for care leavers, are delivered. The clause also takes steps towards making good on the Prime Minister’s commitment to guarantee care leavers a place to live.
We would all recognise, from the context of our own constituencies, that the barriers faced by care experienced young people are numerous. The likelihood that good outcomes in life will be harder for them to achieve is simply a fact. It is absolutely right to bolster the local offer, as clause 8 seeks to do. The new provisions will further strengthen what many local authorities, including my own in Southampton, have begun to do over a number of years. As the right hon. Member for East Hampshire suggested, there are measures of good practice under local councils that we now ought to be bringing into this standardisation of the offer.
In terms of a national offer, the new clause certainly has its merits and it is something good to aim for. I had the opportunity to speak to the Under Secretary of State for Education, my hon. Friend the Member for Lewisham East (Janet Daby), who is responsible for children and families and whose remit this issue comes under. She has agreed to meet me to explore it further, but as my hon. Friend the Minister for School Standards has already said, there is a cross ministerial group. I really welcome the work that it is doing to take these measures forward, because building on the existing measures, which strengthen that national focus, is crucial. It says to young people with care experience that they matter.
I have worked very closely with young people in care over the years, and I know that too many of them feel let down by the systems there to protect them. This is about showing that the Government get what it is like for them, are focused on acting for their good and doing so from the very top. Having that national focus goes a long way towards making those people’s journey to adulthood stronger and as smooth as possible and towards ensuring that they are fully supported to thrive.
Again, I welcome the Minister’s comments and further assurances about the work taking place. I would say, from personal experience, that we should be doing everything, both within this Bill and beyond it, to try to move the dial for care experienced young people even more, so that we can reduce the gaps in educational attainment, employment, training, the quality of housing they have and their general success as they move from care into adulthood. I would really welcome further discussions, beyond the Bill, on how we can build on the excellent measures in clause 8.
As someone who grew up in care myself, I want every action of the Bill to break down the barriers that care experienced young people face. That is one thing that I personally committed to when I was elected to this place, hence I fully support the clause, the wider action that the Government are taking and the further assurances that we have heard this morning: that these measures are the start, not the limit, of the Government’s ambitions.
It is a pleasure to serve under your chairship, Mr Stringer, and it is an honour to follow my hon. Friend the Member for Southampton Itchen, who is a powerful champion for care experienced people in speaking from his own personal experience—and the fact that he is my office room- mate helps.
I want care leavers to reach their potential and to be active members of society in Bournemouth and Britain. I want them to have the same opportunities in life as other young adults. As young people in care approach adulthood, they need to be supported to think about and plan their future—to think about things such as where they will live and what support they may need to find accommodation, employment and take part in their communities.
But as my hon. Friend just explained, so many care experienced people are held back. Some of the statistics are truly startling and appalling. The National Audit Office report entitled “Care leavers’ transition to adulthood” identified poorer life outcomes for care leavers as a “longstanding problem” with a likely high public cost, including in mental health, employment, education, policing and justice services. The Department for Education’s 2016 policy paper entitled “Keep On Caring” said that care leavers generally experience worse outcomes than their peers across a number of areas.
Here are the statistics. It is estimated that 26% of the homeless population have care experience; 24% of the prison population in England have spent time in care; 41% of 19 to 21-year old care leavers are not in education, employment or training, compared with 12% of all other young people in the same age group; and adults who had spent time in care between 1971 and 2001 were 70% more likely to die prematurely than those who had not. It is no wonder that the independent review of children’s social care described the disadvantage faced by the care experienced community as “the civil rights issue of our time.”
In reading those statistics, and in reading that report again, I am struck by just how much of a privilege and an honour it is to be in this Committee contributing to the work of the Bill so early in this Parliament. That is why I particularly welcome clause 8, which is a care leaver led change that responds directly to the voices of care experienced people and care leavers.
While we are talking about clause 8, I want to dwell briefly, as my hon. Friend the Member for Southampton Itchen did, on the good practice that exists in local government, particularly in my patch of Bournemouth, where Bournemouth, Christchurch and Poole council has done a couple of things to respond to, work alongside, and listen to care leavers and care experienced people. That includes the 333 care leavers hub in Bournemouth, which is a safe space for care leavers to visit and relax, and which focuses on wellbeing and learning by helping to teach people practical skills from cooking to budgeting. Care experienced young people also take part in the recruitment of social workers, sitting on interview panels to make sure that potential social workers have the necessary skills to support care experienced people.
There is good practice in our country, but that good practice is not consistent across the country. I therefore welcome the efforts in this clause—indeed, in much of the Bill—to make sure that we have that consistency. Requiring the publication of information will mean that care leavers know what services they can access, and, critically, that professionals feel supported to advise on and signpost offers. When professionals have huge demands on their time, and face significant struggles in delivering support, having that additional support available to them will be critical.
I therefore commend this clause, because it is a care leaver centred approach, a pragmatic approach, and, frankly, a much needed approach.
I thank my hon. Friend the Member for Southampton Itchen for his powerful and personal testimony, and for his clear commitment to these issues. I also thank my hon. Friend the Member for Bournemouth East for his clear and important contribution.
My hon. Friends have set out the reasons why we are providing that continuity of support when care leavers reach the age of 18, through the Staying Put programme, and why we are now legislating to add Staying Close to the duties of local authorities. It is to provide that care to leavers; to help them to find suitable accommodation and access services, including those relating to health and wellbeing support; and to help them develop and build their confidence and their skills as they get used to living independently. It is also why we are investing in family finding, mentoring and befriending programmes to help care leavers to develop those strong social networks, which they can then turn to when they need advice and support.
As hon. Members have rightly said, it is really important that care leavers are supported to get into education, employment or training—the right hon. Member for East Hampshire clearly said that as well. That is why a care leaver who starts an apprenticeship may be entitled to a £3,000 bursary, why local authorities must provide a £2,000 bursary for care leavers who go to university, and why care leavers may be entitled to a 16-to-19 bursary if they stay in further education.[Official Report, 25 February 2025; Vol. 762, c. 12WC.] (Correction) On the question raised by the right hon. Member for East Hampshire, more than 550 businesses have signed the care leaver covenant, offering care leavers a job and other opportunities, and we continue to deliver the civil service care leavers internship scheme, which has resulted in more than 1,000 care leavers being offered paid jobs across Government. We have a real commitment to improving education outcomes for children in care, which will help to support them into adulthood and reduce the likelihood of them not being in education, employment or training. We will continue to support that.
The hon. Member for Harborough, Oadby and Wigston asked how the measure in this clause interacts with national offers. The Government set out guidance for local authorities on the duties and entitlements for care leavers, and we are working to develop the detail of those proposals to make sure that local authorities work together with the Government to improve support for care leavers. With specific reference to higher education, we already have a number of duties to support eligible care leavers in higher education. It will certainly be part of the expectation of the local offer that those options are open to care leavers. It is an important aspect to support.
In response to my hon. Friend the Member for Southampton Itchen, we absolutely agree about bringing the good practice of local authorities into the local offer. We work closely with a number of good local authorities, and there is a lot of really good practice around. The Government intend to bring those authorities into our work so that we have updated guidance to ensure that best practice is spread as far, wide and consistently as possible. With that, I urge the Committee to support clause stand part.
Question put and agreed to. Clause 8 accordingly ordered to stand part of the Bill.
Clause 9 Accommodation of looked after children: regional co operation arrangements Question proposed, That the clause stand part of the Bill.
It is a pleasure to serve under your chairmanship, Mr Stringer. I look forward to working through the measures in this landmark Bill with all Members, as has been the spirit so far.
The children’s social care market is not working effectively. The Competition and Markets Authority and the independent review of children’s social care recommended a regional approach to planning and commissioning children’s care places. My Department will support local authorities to increase the number of regional care co operatives over time. As Members will have noted, the clause refers to those as “regional co operation arrangements”. As a last resort, the legislation will give the Secretary of State the power to direct local authorities to establish regional co operation arrangements.
Where a direction is in place, regions will be required to analyse future accommodation needs for children, publish sufficiency strategies, commission care places for children, recruit and support foster parents, and develop or facilitate the development of new provision to accommodate children. We expect regional care co operatives to gain economies of scale and to harness the collective buying power of individual local authorities. I hope that the Committee will agree that this clause should stand part of the Bill.
Regional co operation is something that the previous Government were extremely enthusiastic about and worked to build up, so the Minister will not be surprised to hear that we support the clause. The previous Government’s “Stable Homes, Built on Love” policy paper said that the Government would work with local authorities to test the use of regional care co operatives—regional groupings of authorities to plan, commission and deliver care places—in two areas. Those two pathfinders would trial an approach within the legal framework, with a view to rolling it out nationally following evaluation as soon as parliamentary time allowed. Were we in office, I suspect that we would be very much considering the same clause. This Government have announced that those two pathfinders are going ahead, in Greater Manchester and the south east, from this summer.
When we consulted about the idea—it is a good idea —there was a lot of support, but there were also a lot of concerns and questions about the size of the groups, the risk that they would be too removed from the child, and the loss of relationships with small providers in particular. As the Minister said, this is a recommendation from previous work, including from the independent review of children’s social care, which we commissioned. Obviously, we hope that such groups will be useful in providing local authorities with greater purchasing power and more options when they are securing accommodation for children in care, but we think it is important to be clear about the objectives to avoid any unintended consequences. I have come to think that, often, it is when we all agree that we are doing a good thing that we should ask ourselves the difficult questions to ensure that we are not making a mistake.
The key issue in the “children’s home market”—I put that in scare quotes, because I hesitate to use the phrase in the current context—is a lack of supply, which leads to children being placed far away from their roots and support networks in accommodation that does not always match their care plan. We then see children going missing and having repeated placement moves. I wonder whether the Minister will put on record in Committee the aims for the regional care co operatives, other than purchasing power, and how they will address the other issues.
Will the Minister respond to some specific issues raised in our consultation? One issue is that it is harder for smaller providers and specialist charities, which are obviously part of the offer for children in care at the moment, to engage with regional care co operatives. What does he think about that risk and what does he plan to do about it?
Does the Minister share the concern raised by Barnardo’s that the measure could inadvertently lead to greater fragmentation in the system by separating decisions about the commissioning of placements from decisions about the commissioning of family support? That is a thoughtful question. What is he doing to avoid that being a problem? We are all positive about regional care co operatives, but I wonder whether there were any lessons from the build up to the two pilots that we were proposing, whether he has seized on any issues and whether he is planning to address them, even as we do what we all agree is a good thing.
It is a pleasure to serve under your chairmanship, Mr Stringer. I will ask the Minister a couple of questions about clause 9 that I hope he will address when he responds. We support its intent, but I want to understand what safeguards or guidance will be put in place to ensure that children in care in areas where these regional co operatives are active do not inadvertently end up far away from their families.
We already know that about a fifth of children in care are placed over 20 miles away from their families and almost half are living outside their local authority area. In some cases, it is important that a child is moved reasonably far away for safeguarding reasons, but often that is not the case. I know from having spoken to care experienced young people and to the Become Charity, which has done quite a lot of research into the impact of children being moved far away from home, that that can affect their mental health, that they can feel isolated and lonely having moved away from family and friends, and that it can cause stigma in the school or college environment. I want to understand how the Minister intends to ensure that young people are not moved further away than they need to be when these regional co operatives are in place.
Again, as hon. Members have said, we support this approach and it is the approach that we were taking. It is also true that when everybody agrees on something, it is usually the point of most danger for making bad law. It is important to have these Committee proceedings and proper scrutiny.
I was personally never keen on the name of regional co operatives, although I do not think the word “co operative” actually appears in the Bill. We can, of course, have co operation without having a co operative. This legislation is actually about regional co operation arrangements.
There are three different types of potential co operation arrangement: first, for strategic accommodation functions to be carried out jointly between two different local authorities; secondly, for one to carry out the duties on behalf of all; and thirdly, for a corporate body, effectively a separate organisation, to be created to do that. I imagine that Government Members will have different views depending on which of those three forms the arrangements take. Will the Minister say which of those he expects to be most common? As well as the pilots, there have no doubt already been formal and informal conversations with local authority leaders in children’s services in many different areas.
I am keen to know how this arrangement is different from some arrangements that may already take place. For example, the tri borough children’s services arrangement in London—I will try and get this right—between Westminster, Kensington and Chelsea, and Hammersmith and Fulham. Presumably, some of those functions are administered in common there, so how will this be different?
I probably should have asked the Minister about scale. In the two pilots, we have Greater Manchester, which is just under 3 million people, and the south east, which is roughly 3 million people. I do not know what the Government’s expectations about scale are and whether they would continue to support something like the tri borough arrangement, which is obviously much smaller.
My hon. Friend, as ever, makes a very apt point. Where we end up on that continuum of scale depends on what we are going after most. Of course, we want all those things. For purchasing power, a bigger scale is better, but for close and easy working relationships, a smaller scale is sometimes better. When we are talking about children, and the placement of vulnerable children, that may well push us towards the smaller end of the scale.
Perhaps it is possible to perform different functions at different levels, with some functions still being performed by the individual local authority. Even then, as my hon. Friend often rightly says, there is an enormous difference in scale between London local authorities, which are actually quite small even though they are in our largest city, and Birmingham, which is one enormous authority. It might be argued that doing some things at a sub local authority level makes sense in a very large local authority area, but as I say, it might be possible to do some things as the single local authority, some things at a larger level, and some things—presumably principally in terms of purchasing leverage—on a wider scale again.
If regional co operation arrangements are not materially different in practice from something that already exists in co operation between local authorities, even if that is on a smaller scale than what is envisaged, is legislation actually necessary? If it is not, we probably should not legislate. I would like to understand a bit more about the legislative basis that is currently missing.
Finally, the Bill sets out that the Secretary of State may add to the definition of the strategic accommodation functions that we have listed in proposed new section 22J(3) of Children Act 1989. What type of additional functions does the Minister have in mind?
I rise to speak in favour of regional co operation arrangements, primarily because of what we have seen in two important reviews or evaluations. The recent independent review of children’s social care that I referred to highlighted a system at breaking point, as we also heard from the Minister. The insight from that report was that how we find, match, build, and run foster homes and residential care for children in care radically needs to change. When the Competition and Markets Authority looked at this area, it also identified major problems, such as profiteering, weak oversight and poor planning by councils—the verdict on the system is damning.
The independent review recommended that a co operative model should sit at the centre of bringing about change. The values of our movement could provide the loving homes that children in care need. I particularly support this clause because this feels like a very Labour Government Bill—one that has at its heart the co operative model that is obviously such a big part of our labour movement.
My hope is that regional care co operatives could gain economies of scale and harness the collective buying power of independent local authorities to improve services for looked after children. There are obvious benefits to using a co operative model to solve those problems—the values of self help, self responsibility, democracy, equality, equity and solidarity apply directly to how these regional care co operatives would be run. In a social care market that has been described as broken by the Minister and by those reports, it is critical to bring the co operative model more into what we provide.
I thank hon. Members for their thoughtful comments, suggestions and questions. On the point that the hon. Member for Harborough, Oadby and Wigston made about learning from the pathfinders, the Department has consulted widely with the sector on the proposals for regional care co operatives. Learning from the pathfinders has shaped the proposed legislation and the definition of the strategic accommodation functions. We will develop expertise in areas such as data analysis and forecasting, as well as targeted marketing, training and support for foster carers. Working collectively with improved specialist capabilities should allow for greater innovation so that local areas are better able to deliver services for children in care.
I turn to the points made by the hon. Member for Richmond—
Twickenham. We are in Richmond borough.
My apologies. I did know that, but I was trying to be impressive by remembering the hon. Lady’s constituency and I got it badly wrong.
On the hon. Lady’s point about where placements should be, local authorities will continue to have the same statutory duties to find the most appropriate place for looked after children, including that they should live near home, so far as is reasonably applicable. Regional care co operatives will assist local authorities with these duties. Placement shortage is a key driver of children being placed in homes far from where they live; regional care co operatives should improve that by increasing local and regional sufficiency, making more places available locally for children who need them.
Will the Minister confirm that—as I think is the case—the Government would use their powers under the clause to impose regional co operation agreements only as a last resort, and that we would not push this on everybody who does not want it?
The shadow Minister is absolutely correct. We want to work collaboratively with local authorities in rolling this out. We will not force local authorities to do so. I thank him for enabling me to make that clear.
Question put.
Forgive me, Mr Stringer; I know that the Minister has finished, but may I speak again, with leave?
I have put the Question. I am sorry, but you have missed the opportunity.
Question agreed to. Clause 9 accordingly ordered to stand part of the Bill. Clause 10 Use of accommodation for deprivation of liberty
I beg to move amendment 24, in clause 10, page 16, line 39, at end insert — “(8A) After subsection (9) insert — ‘(10) Where a child is kept in secure accommodation under this section, the relevant local authority has a duty to provide therapeutic treatment for the child.’”
This amendment would place a duty on local authorities to provide treatment for children in secure accommodation.
With this it will be convenient to discuss clause stand part.
We have come to a particularly serious clause—not that the other clauses are not serious, but the use of deprivation of liberty orders for children is always deeply troubling, as is the rise in the number of children who are subject to them. I share the wish of the Children’s Commissioner to see an end to this practice and an end to the use of unregistered provision.
We have seen an increase in the number of young children—including two aged seven last year and 200 under 13—given deprivation of liberty orders. There is nothing in the Bill to differentiate by the child’s age or stage. What consideration has the Minister given to that point? There is something about the use of the orders on very young children that is particularly striking.
When a young child goes into secure accommodation, the Secretary of State has to sign it off, but no sign off is required from the Secretary of State on deprivation of liberty orders. Why not? The Government are keen on consistency elsewhere in the Bill. Will they bring the same consistency to this clause?
More broadly, do we not need greater clarity on the mechanism for restricting children’s liberty outside a secure institution? I am sure that Members of the other place will be very interested in that question. As the Children’s Commissioner has written, some of the children concerned have physical and learning disabilities, and many are at risk of criminal or sexual exploitation or both. Will the Minister act on the Children’s Commissioner’s recommendation and introduce a proper legal framework and guidance? We believe that much more clarity is needed in the Bill on therapeutic care for those who are under a deprivation of liberty order. Historically, there has been a lot of focus on containment. This amendment is, I suppose, our legislative prod to take the opportunity to think about what therapeutic help a child needs and how to deliver it.
I want to put to the Minister some very important points that Jacky Tiotto of CAFCASS made to us last Tuesday. She welcomed a lot of the provisions but said that at present the Bill is
“a missed opportunity to deal with the arrangements around deprivation…some better, stronger regulations could be made for those children—who, let us face it, are actually being secured, or deprived of their liberty.”
She raised several specific points that I will put to the Minister. She said:
“Our data shows that 20% of those children are aged 13 or under. Currently, if a local authority applies for a place in a secure unit for a child aged 13 or under, the Secretary of State for Education has to approve that application. I think an assumption is made in the Bill that that strength would remain in the amendment. We need to make it clear that, for all applications for 13-and unders into places where they will be deprived, the Secretary of State should still approve. That has been unnecessary because the courts have been using their jurisdiction to deprive children. This clause will remove that, and make the accommodation usable legally, but we need to ensure that for young children it comes back”—
by “it”, I think she meant Secretary of State sign off. Will Ministers amend that provision? They do not necessarily need to answer one way or another today, but I will be grateful if they write to me on the point. At some point in the Bill’s passage through Parliament, I hope that they will reply to the specific point about Secretary of State sign off.
The head of CAFCASS also said that
“for those young children, the review of their deprivation should be stipulated in terms of how regularly that deprivation is reviewed. For a 10-year old deprived of their liberty, a week is a long time.”
That is a good point. She continued:
“The children who we work with tell us that they do not know what they have to do to not be deprived of their liberty, and very young children will be confused. So the frequency of review, I think, becomes more regular if you are younger.”
That is a specific and on point suggestion from someone who really knows their stuff. Might Ministers take up that suggestion from CAFCASS and start to specify frequency of review? Might they take up her point about making reviews more frequent and clearer for young and very confused children?
Jacky Tiotto made another specific point—so specific that it is worth my reading it out. She said that
“the Department for Education should definitely consider what has happened to the child before the deprivation application is made. From our data, only 7% of those children were the subject of child protection plans, and it is hard to imagine going from not being protected by a statutory child protection plan to being in a court where they might deprive you. The relationship between child protection and deprivation needs strengthening.”––[Official Report, Children’s Wellbeing and Schools Public Bill Committee, 21 January 2025; c. 32-33, Q72.]
To that end, she suggested:
“As soon as that child becomes the subject of a concern, such that you might be making an application to deprive, you hold a child protection conference and you have a plan in place to protect that child beyond the deprivation”––[Official Report, Children’s Wellbeing and Schools Public Bill Committee, 21 January 2025; c. 33, Q73.]
Is that something that Ministers would be happy to specify? What do they think of that argument?
The Bill leaves a lot to be specified in regulations. In the Department for Education’s explanatory notes to the Bill, we are told:
“Any specific requirements for the new accommodation will be included in regulations that will be informed by learnings from the pilots specifically testing the sort of accommodation and the cohorts of children that local authorities are looking to place in this alternative accommodation using these new powers.”
May I ask the Minister what learning and experience have been gained from those pilots? What has been shared with the Department so far? When does he expect the Department to be in a position to develop more detailed requirements for the regulations? Are we likely to see them this year, assuming Royal Assent, or are they a bit further away?
Last but not least, there is a connection between the issues raised by clause 10 and those that we will come on to when we debate clauses 11 to 13. In written evidence to the Committee, the Children’s Commissioner noted that
“in the Children’s Commissioner’s report ‘Illegal Children’s Homes’, the office found that of 775 children living in unregistered placements on 1 September 2024, almost a third (31%) were subject to a court ordered DoL. The placement of these highly vulnerable children in wholly illegal settings is deeply concerning.”
I wonder whether the Minister will address that point, either by amending clause 10 or by amending later clauses.
Let me recap for the Minister’s benefit. There is the suggestion that the requirement for the Secretary of State to give approval for children aged 13 or under be made clear; there is the suggestion from CAFCASS that we specify in the Bill that review be more frequent for younger children; there is the question about automatically having a child protection plan in place for when the child leaves the deprivation; and then, from the Children’s Commissioner, there is a call for action on the large proportion of children on deprivation of liberty orders who are currently being placed into illegal settings. Effectively, those are the four questions that the expert community is putting to us.
Clause 10 will amend the Children Act 1989 such that local authorities can authorise deprivation of liberty of children other than only in a secure children’s home, and will change the term “restricting liberty” to “depriving of liberty”.
In the secure children’s home sector, a distinction is often made between what are called justice beds and welfare beds. There are also children detained under the Mental Health Act 1983 on secure mental health wards and in psychiatric intensive care units, or on non secure wards. I am assuming that we are talking today only about what are known as welfare beds—I say “beds”, but normally the entire facility is either one or the other.
To speak on justice beds briefly, there has been a big fall in this country since 2010 in the number of children who are locked up in the criminal justice system: the numbers are down from about 2,000 in 2010 to only around 500 now. That has partly been because of a fall in crime, and in the particular types of crime for which young people used to be locked up, but it is also because of the good work of youth offending teams. Most of those children are older and would typically be in a young offenders institution when aged 15 to 17, or indeed, 18 to 21. The very small group of children who are in the secure children’s home sector are a very difficult and troubled cohort of youngsters with complex pasts. I take a moment to pay tribute to the staff; it is an extraordinary career decision to go into that line of work, and they do it with amazing dedication.
The welfare bed part of the secure children’s home sector is where somebody has had their liberty restricted not because of something they have done, but because of something they might do—because of the danger or threat they pose either to themselves or others. It is an enormous decision to take to deprive anybody of liberty on those grounds, but particularly a child. As with those children who are in the criminal justice part of the secure children’s home sector, these are typically extremely troubled children.
On the change in clause 10 to allow local authorities to house those children somewhere other than a secure children’s home, the obvious question to the Minister is “Why that, rather than ensuring that a secure children’s home is properly catering to the needs of that cohort of children?” I am not saying that it is the wrong decision, by the way, but I am interested to know, and it is good to have it on record, why it is a better decision to say, “Let’s take some or all of these children and house them in a different type of facility.” What have the Minister and the Secretary of State in mind for the alternative accommodation that would be set out in regulations? For the benefit of the Committee, and again for the record, it might also be helpful to define what is different. The Minister might clarify the definition of a secure children’s home and explain what it is that we need to deviate from.
My other question is about the change in phraseology. We are talking about moving from the restricting of liberty to the depriving of liberty. I understand from the explanatory notes that this tries to reflect the reality, but it is a legitimate question whether it is a strictly necessary change to make and what the reasoning is. Even when we do deprive people of liberty, we do not deprive them of all their liberty. There are degrees of restriction. We have this as a feature in the criminal justice system, and though this is a different cohort of children, some of the same principles may apply. We may be able to get a lot of the benefit we are looking for from restricting someone’s liberty rather than entirely depriving them of it. I wonder if the Minister might say a word about that distinction and about whether the Government have received representations on the change in wording.
My understanding is that this change follows a trend of children being deprived of their liberty outside the statutory route by being housed in unsuitable accommodation not registered with Ofsted, often far from home and family. That has been partly addressed in the questions from the hon. Member for Harborough, Oadby and Wigston.
The success of this provision will depend on the regulations. What actually makes a setting capable of being used for the deprivation of liberty? Will there be a requirement with respect to education in that setting? Will they need to be registered with Ofsted? It is not entirely clear. When will regulations relating to this provision be brought forward? Is it the intention that they will mirror the scheme for the secure accommodation?
The law around the deprivation of liberty is incredibly complex. Without proper legal advice and representation, it is very hard for families to understand what is going on and what options they have. It is not clear yet what legal aid will be available to families or the child themselves when an application is made under the new route. Can the Minister clarify what will be available with respect to legal aid, or put a timetable on when we will get that clarification?
Amendment 24 seeks to place a legal duty on local authorities to provide therapeutic treatment for children placed in secure accommodation—that is, a secure children’s home. The Government’s view is that the amendment is not necessary as there are a number of existing legal duties on local authorities to ensure that wherever children are placed, including in secure accommodation, their needs are met, including the needs for therapeutic treatment. This is part of the duty on local authorities, under primary legislation, to safeguard and promote the welfare of any child that they look after.
Any placement decision for a looked after child must be informed by the care plan, which a local authority is required to prepare for all looked after children. The local authority must understand fully the services offered and how the provider intends to care for the child, which should be based on robust evidence that supports the appropriateness and effectiveness of any therapeutic approach or model of care that the provider intends to use. This will apply equally to a placement in a secure children’s home as it will to other residential placements, including relevant accommodation outlined in the clause.
The care plan must be shared with the secure children’s home’s registered manager and be kept under regular review. The care plan must contain arrangements made by the local authority to meet the child’s needs, including in relation to health, which must be included in the health plan—that forms part of the care plan—and in relation to the child’s emotional and behavioural development.
The Government recognise that as part of ensuring that children have access to the most appropriate therapeutic support in secure accommodation, children should be provided with appropriate healthcare services. As such, in addition to the duty on local authorities to take reasonable steps to ensure that the child is provided with access to appropriate healthcare services, NHS England has statutory responsibility for the direct commissioning of health services or facilities for children in secure accommodation.
In addition, NHS England retains a duty around any health provision that is specified in a child’s education, health and care plan. The duty means that any health services specified must be provided, where possible, within the bounds of what is already commissioned. For the reasons that I have outlined, I ask the shadow Minister to withdraw the amendment.
I turn to clause 10, which, through amendments to section 25 of the Children Act 1989, allows for children to be deprived of liberty in provision other than a secure children’s home under a statutory framework, with the associated benefits that this brings, including access to regular review points and easier access to legal aid. This provision will create a statutory basis for a court authorised deprivation of liberty in accommodation best suited to meeting the needs of some of the most vulnerable children, where care and treatment are provided, and where restrictions that amount to deprivation of liberty in connection with the provision of that care and treatment, if required to keep children safe, can also be imposed.
As Members will know, due to a lack of sufficient suitable placement options available to local authorities, many children are currently being placed in unregistered provision or in open children’s homes, where they are deprived of their liberty under authorisation of the High Court under its inherent jurisdiction, rather than under a statutory framework. Inherent jurisdiction is intended only as a step of last resort, typically to keep a child safe when no other legal route or statutory mechanism is available. Its routine use is therefore problematic and reflective of a lack of provision designed to meet all the needs of a small but growing cohort of children looked after by local authorities.
This change to legislation is being made in conjunction with a range of practical steps that we are taking as a Government to support the growth of new types of community based provision needed for this vulnerable cohort of children. A Department for Education and NHS England led programme of work is supporting local authorities and health partners with investment and resources to improve their assessment of need, improve commissioning practices, and develop a whole pathway as well as individual placements that better suit these children’s needs.
Clause 10 will allow for children to be placed in such new types of placements that provide suitable care and treatment and that are also capable of imposing varying restrictions on children’s liberty linked to their fluctuating needs. That could include the ability to place greater restriction on a child’s liberty that amounts to deprivation, where necessary, in connection with the care and treatment being provided at that accommodation, while also being able to reduce the restrictions, where appropriate, without the child needing to be moved out of the accommodation, which is currently the case for children who are placed in secure children’s homes. Children can therefore maintain community links, practitioners can develop long term and appropriate pathways and children will benefit from access to a skilled, multidisciplinary workforce that can provide for them for the long term.
We anticipate that this measure will reduce the use of deprivation of liberty orders applied for under the High Court’s inherent jurisdiction and ensure that children benefit from the protections afforded by a statutory scheme, with a framework of clear safeguards and mandatory review points, to ensure that no child is deprived of their liberty longer than necessary. Additionally, this change will signal to local authorities, other key sector partners and providers of children’s residential provision Parliament’s endorsement of and commitment to these placement options, supporting them to grow and reducing dependency on poor quality, expensive, unregistered placements. This will ensure that some of the most vulnerable children are kept safe and given the support to get on well in life, improving their lived experience by ensuring that there is appropriate support, including community links, health access and so on, to assist them to develop to their full potential.
I am grateful to the Minister for his informative speech, but can I press him to respond to the specific points made by CAFCASS and the Children’s Commissioner? The Minister is alluding to some of them as he goes along. The first is about requiring explicit Secretary of State approval beforehand. The second is about specifying the frequency of review, particularly for younger children. The third is about having an automatic requirement for children’s protection plans as the child comes out. The fourth, which the Minister has alluded to, is about them being put into illegal settings, and whether something legislative should be done at this point to stop that from happening at all.
I am coming to the end of my speech and hope to answer the points that the Opposition spokesperson made. I will certainly take away the issues that he raised.
I thank all Members for their contributions and questions on this very important matter. On consistency, the views of the Children’s Commissioner and age, I know that this point was raised in the other place only yesterday by a former Minister, and I am grateful for that. It is worth saying here, too, that the child rights impact assessment is informing our work on the Bill. I give the shadow Minister the assurance today that I will take on board these comments.
Is the child rights impact assessment for the Bill published so that we can see it?
There is no legal obligation for England to publish that assessment, but we are certainly using it to inform our work on the Bill.
I think Ministers have said in previous sittings that it will be published during the process of scrutiny, along with the impact assessment. Is that still the case?
I am referring to the conducted children’s rights impact assessment, where children are directly impacted by the policies and/or particular groups of children and young people are more likely to be affected by others. As I mentioned, there is no requirement to publish these documents in England. However, the documents are currently under review and we will advise on our next steps shortly. More broadly, with regards to the impact assessments, these will be published in due course.
I thought I had heard Ministers say previously that they were planning to publish this for our benefit—that we would get both the impact assessment and the children’s rights assessment. Perhaps it is me who is sowing confusion and the Minister may still intend to publish this document. I cannot see any reason why the Government would not publish it, so can I get an assurance that that is going to be published?
To state this clearly, the impact assessment has not yet been published but is obviously informing our work. Obviously, various different assessments are undertaken and I will certainly get back to the hon. Member on those points.
The Minister has said a number of times that, by law, the child rights impact assessment does not have to be published. In the interests of transparency and for all of us to do the right thing by children, does he not agree that even if he does not have to publish it, he really ought to do so?
To be clear, we will be publishing the regulatory impact assessments. We will certainly be using the evidence from the children’s rights impact assessments to inform our work.
I turn to the points raised by the Opposition spokesperson on placements of children under the age of 13. Depriving a child of their liberty must always be a last resort, but it is sometimes necessary to keep that child and others safe. These children are some of the most vulnerable in our society. We must do all that we can to keep them safe and help them get on well in life. When a child under the age of 13 is deprived of their liberty and placed in a secure children’s home, the local authority must obtain approval from the Secretary of State before applying to the court. That requirement is set out in regulations that reflect the added seriousness of depriving children so young of their liberty.
The Opposition spokesperson and the right hon. Member for East Hampshire (Damian Hinds) also made a number of broader points about child protection plans and deprivation of liberty. Local authorities’ care planning duties are clear that when there are looked after children, they must have a long term plan for a child’s upbringing, including arrangements to support their health, education, emotional and behavioural development, and their self care skills.
The statutory guidance “Working together to safeguard children 2023” is clear about the actions that local authorities and their partners should take, under section 47 of the Children’s Act 1989, if a child is suffering or likely to suffer significant harm, as well as the support that should be provided under section 17. If there is a concern about a child’s suffering, or if a child is likely to suffer significant harm, the local authority has a duty to make an inquiry under that Act. “Working together to safeguard children” sets out the actions that the local authority and their partners must take when there are child protection concerns. That includes putting in place child protection plans when concerns are submitted. I hope that the Committee agrees that the clause should stand part.
I hope that we can clear up the confusion about whether we will see the children’s rights assessment. I cannot see any good reason why we would not be able to see that perfectly routine assessment. None of these things is the end of the world, but not having the impact assessment of the thing that we are quite deep into line by line scrutiny of seems to further compound this problem. Obviously, no one can defend that; it is not good practice.
I slightly pre empted what the Minister said—he had scribbled some last remarks—but I was glad that he came to some of the points raised by CAFCASS and the Children’s Commissioner. I raised them partly because I know that their lordships will be extremely interested in these specific questions. There probably is scope for improvement of this clause to do some of those other good things, because this is such a serious issue for those very young children.
We will not vote against clause stand part, but I will press our amendment to a vote. I heard what the Minister said, but I just make the point that there is scope for improvement in the clause, and I suspect that their lordships will provide it.
Question put, That the amendment be made.
5|0|5|11|The Committee divided:|Question accordingly negatived.||0|0
Clause 10 ordered to stand part of the Bill.
Clause 11
Powers of CIECSS in relation to parent undertakings
Question proposed, That the clause stand part of the Bill.
With this it will be convenient to discuss clause 12 stand part.
Clauses 11 and 12 will strengthen Ofsted’s regulatory powers to allow it to act at pace and scale when that is in the best interests of children. Specifically, clause 11 strengthens Ofsted’s powers to hold provider groups—parent undertakings, in legislation—to account for the quality of the settings that they own and control. This ensures that Ofsted can take the quickest and most effective action to safeguard vulnerable children, without adding duplication within the existing regime. It will allow Ofsted to look across provider group settings as a whole and take action at provider group level, rather than being limited to doing so setting by setting as it is now. It will also ensure that a provider group is accountable for the quality of the settings that it owns.
Where Ofsted reasonably suspects that requirements are not being met in two or more settings owned by the same provider group, it will be able to require senior people in the provider group to ensure improvements in multiple settings. The requirement applies both to settings operated by a single provider and to multiple providers owned by the same group. Ofsted will be able to request that the provider group develops and implements an implementation and improvement plan to ensure that quality improves. The plan will need to address the issues identified by Ofsted and be approved by Ofsted if it is satisfied that the plan will be effective in addressing the issues.
The clause gives the Secretary of State the power to make regulations to provide that non compliance by the provider group means that the providers that it owns are not fit and proper persons to carry on a setting. That will prevent a person from being registered in relation to new settings if their owner has failed to comply with the relevant requirements under these provisions. That should act as a deterrent and ensure compliance with the requirements.
Clause 12 gives Ofsted the power to issue monetary penalties to providers that have committed breaches of requirements, set out in or under the Care Standards Act 2000, that could also be prosecuted as criminal offences, including operating a children’s home without registering with Ofsted. Ofsted will also be able to issue a provider group with a fine for non compliance with the requirements set out in clause 11. The fine will be at Ofsted’s discretion and is unlimited in legislation. That will act as a significant deterrent, so that provider groups comply with these requirements. Clause 12 ensures that Ofsted has an alternative to prosecution where that is currently the only enforcement option against those seeking to run a children’s home without registration. Ofsted will not be able to impose a monetary penalty on a person for the same conduct where criminal proceedings have been brought against them in relation to that conduct.
To act as a deterrent and to ensure transparency for the public, the clause gives the Secretary of State the power, by regulations, to require Ofsted to publish details about the monetary penalties that it has issued. Ofsted must also notify local authorities when a monetary penalty has been issued, as it is currently required to in relation to other enforcement actions that it takes. Finally, the clause provides that the issue of a monetary penalty could be used as grounds for cancellation of registration.
We are entering a whole new section of the Bill. I will make a number of points now that we could come back to when we debate future clauses, but I hope we will not have to. I hope that we can have discussions about the principle and philosophy now and we might be able to move faster later, but we can come back to them if necessary.
As we turn to the clauses dealing with children’s homes, I want to start by checking that the Minister has the same basic understanding of the situation, and the same philosophical take on what we are trying to do, as I do. First and most importantly, there is a question about the underlying structural problems that have driven high costs for local authorities in the provision of residential care for children and young people, and there is a second question about the best approach to tackling that, both legislatively and non legislatively.
On the first, does the Minister agree with me, at least in principle, that the main issue driving the high costs is a shortage of foster care, which is driving local authorities to send children into expensive children’s homes at best, or into unregistered provision at worst? Research by Ofsted in 2022 suggested that residential care was part of the care plan for just over half of the children whose cases it reviewed. To put that the other way round, almost half of children who ended up in residential care should ideally not have been there. Crucially, the research shows that the original plan was for over one third of children to go into foster care.
Although the Bill makes changes to the provision of information about kinship care, which is good, there is nothing that will produce the step change that we need to increase the number of foster carers, which is the thing that would really take down the demand and the high costs. That point is common to the discussions that we will have about cost capping social workers, cost capping individual care homes and reviewing whole entities. I do not think that those measures are bad; I just do not think that they are ultimately the underlying solution. That is a point that the Committee will hear me make several times today.
In his independent report commissioned by the previous Government, the Member for Whitehaven and Workington (Josh MacAlister) highlighted that in the year ending March 2021, “160,635 families came forward to express an interest in becoming a foster carer, and yet just 2,165 were approved”.
That is just 1.3% making it through. It might be that some of those were just initial approaches and not all of those people were deadly serious, but that is still a very small share. He continued: “Local authorities perform a wide range of roles and appear to be struggling to provide specialist and skilled marketing, recruitment, training and support for such an important group of carers. In 2020/21 recruitment and retention among independent fostering agency services led to a net increase in capacity of 525 additional households and 765 additional foster care places. In contrast, there has been a decrease in capacity of 35 households and 325 places in local authorities over the same period”.
By definition it is quicker, and in quite a lot of cases better, to provide foster care than to build a new children’s home. I want to press the Minister on what he thinks is the explanation for that 99% gap between those expressing an interest in fostering and final approvals. What is he doing to close that gap? He will be aware that there is a perception that it is almost impossible to become approved as a foster carer. We looked at this in my family some years ago. We started in on it through my work as a constituency MP; I have met many constituents who are foster carers. They are incredible people and I pay tribute to them. A woman I know well has fostered 70 children as well as adopting. I honestly think these people are amazing.
The Government really need to use the Bill—this rare legislative slot, as one of the Ministers said—to increase the number of foster and kinship carers. Publishing information is good, but it will not change much unless it is accompanied by a radical attitude to approvals by local authority social work teams. When the alternative—which we are getting to in this clause—is children being sent miles from home, placements breaking down, children going missing and high costs to local authorities, there is obviously a burning platform for change.
If I were the Minister—he is free to take this suggestion or not—I would commission a month long desktop review to look at the pipeline and all the decisions to reject applications to be foster carers that got fairly far down the track, and understand what can be learned from them. That could shape amendments either here or in the other place and be a huge benefit to him. I can think of a senior official in a Government Department—someone the Government trust to run a major public service—who has two kids, provides a loving home and wanted to foster but was turned down. There are many such cases. Everyone knows the phrase “too many books in the house”, but I strongly encourage Ministers to dig into the underlying question of why we lose so many opportunities to get the foster carers that would take off the pressure that we are trying to take off with these clauses.
A key recommendation of the independent review of children’s social care led by the hon. Member for Whitehaven and Workington was to introduce mixed models combining residential and foster care, particularly for older children, who are the fastest growing part of this cohort. That was part of our brief for the initial pathfinder sites for the regional care co operatives, which I mentioned in the debate on a previous clause. What assessment has the Minister made of that approach? What impact does he think its adoption might have? Is there any interesting early data from the pilots in Greater Manchester and the south east?
Speaking of mixed models, I encourage the Minister to look at the incredible work of the Royal National Children’s SpringBoard Foundation, which, as he knows, does amazing work looking after care experienced and edge of care children in a network of state and independent schools. It has been working with the DFE since 2020—something I am very proud that we brought in—and has provided incredible, transformative opportunities for disadvantaged young people. I encourage the Minister to build on that and go further.
On the specifics of clause 11, after the terrible abuse of children supposedly in the care of the Hesley Group, it is absolutely right that the Government are trying to identify systemic safeguarding problems in organisations that manage multiple children’s homes, independent fostering agencies and residential special schools. Our only concern, which is quite serious, is that we should allow for rapid action, not something that drags on and becomes a time and resource consuming process.
I heard what the Minister said in introducing the clause about providing an alternative to prosecution, but I do not want to lose sight of the importance of prosecution. My noble Friend Baroness Barran told me that when she was a Minister in the Department for Education, she was already able to request inspections of every home in a group where one was judged to be failing, and did so on at least one occasion. Ultimately, we need experienced people to go into a home quickly and see what is actually happening. I think this is within the spirit of what the Minister said, but I hope he would agree that there is often no better alternative to actual inspection and actual prosecutions.
To use an example from a very similar area, the Department can also request an “improvement plan”, which is the main vehicle proposed in these clauses, in the case of independent schools, but that does not always work well in practice. The reasons for that are instructive for the kinds of issues that I hope Ministers will think about here. What ends up happening is that plans are sent in varying degrees of adequacy, and time—in some cases literally years—can be wasted with a lot of letter writing back and forth. I urge the Minister to think about the action he wants in those kinds of cases. Imagine being in the middle of a drawn out improvement plan process in another case like the Hesley Group case—and that is before the inevitable appeals, which the clauses provide for, kick in.
We have not tabled an amendment to do this—I wonder, though, about the other place—but we think that the Minister needs to confine the improvement plan idea to more minor administrative cases or lower level concerns. That is where it might be more appropriate. We worry that we might get similar processes to those that we have seen in independent schools, where we have a resource intensive, rather bureaucratic and slow process that goes on for a long time with a lot of back and forth and appeals. Ultimately, we sometimes just need to get to the point. That is our broad concern.
Will the Minister address the following specific points on clause 11? First, what is the definition of “reasonably suspects” in proposed new section 23A(2)(b) and (3)(b)? The policy summary mentions Ofsted reasonably suspecting,
“based on intelligence they receive or via inspection, that required standards are not being met in two or more settings owned by the same provider group”.
What sort of intelligence would meet the bar for intervention? On the point about “two or more settings”, I do not necessarily think that we would want to rule out the use of an improvement plan in minor cases, even involving just one setting.
Secondly, there does not seem to be a hierarchy when it comes to failure to meet the required standards. The clause lists lots of different things, and they could be minor or quite major transgressions of the standards. In the case of a major transgression, an improvement plan feels quite bureaucratic. On the point of prosecution versus an improvement plan, could we be clearer about what sort of problem leads to what sort of action?
Thirdly, proposed new section 23A(4) does not appear to set a timescale by which Ofsted must submit an improvement plan notice. As the Minister will gather from my remarks, our concern here is about pace and timeliness. We are concerned about cases where there are potentially quite serious concerns, yet there is a delay in sending the notice. In fact, I am more concerned that Ofsted should do an emergency inspection when serious concerns are expressed, and I worry about the improvement plan process resulting, totally inadvertently, in fewer of those inspections taking place because the cases go into the process set out in the clause instead.
Fourthly, will the Minister consider the role of regulation 44 visitors? They are another important set of independent eyes on the children in these homes. He will be aware of suggestions in the past that they are not always as independent as they should be in the cases of certain private groups. Is that not an important thing to consider here? We must ensure that the existing system works before we add new layers of process on top of it. There is no reference to those visitors in the policy summary, and they play a vital role in safeguarding the children in these homes.
Fifthly, I do not know what consideration was given to requiring the registration of parent groups. The policy summary rejects the routine inspection of provider groups, but we need some level of accountability that has real teeth in urgent situations. Why does the DFE think that full inspection of provider groups is unnecessary? The reason given is that most provision is rated good or outstanding, but about a fifth of providers are not rated as either.
We worry that clause 11 might not achieve what the Government want. It risks making us feel safer and giving us a process, but becoming a bureaucratic sink. We do not want workers to get sucked into a bureaucratic process rather than acting quickly to keep vulnerable children safer.
I look forward to the Minister’s reply. I know that we want the same outcomes on this issue. I understand why an alternative to prosecution is being proposed, but we need to be careful that, although we think we are doing a good thing, we do not inadvertently replicate some of the issues we have seen where that kind of process has been used in other fields, such as independent schools, and that we do not take away pace.
Clause 12 is obviously linked to clause 11, as we are debating them together. We heard from the Children’s Commissioner in her powerful evidence last week that there is a pressing need to address the plight of children in unregistered placements, which her report estimates is costing local authorities almost £440 million a year. The numbers were really quite incredible. Assuming that the number of children placed in those homes on 1 September 2024 was typical for a full year—she quoted 775 children and young people—that equates to more than half a million pounds per child, per year, in these settings.
Clause 12 provides for Ofsted to issue unlimited fines where it is
“satisfied beyond reasonable doubt that an act or omission of the person constitutes an offence under this Part”
of the Care Standards Act 2000. The policy notes state:
“At present, Ofsted can prosecute those who do not register but operate or manage those services. However, this is a resource intensive process and can take a long time. This legislation will give Ofsted further enforcement powers to tackle unregistered settings, as an alternative to prosecution.”
In one sense, that is totally understandable, but let us just step through what we are doing here. The Bill effectively suspends the criminal justice system for operators who break this part of the law, and replaces it with a system of fines from the regulator. I totally understand why—I understand the Minister’s arguments—but that is quite a big step to take when it relates to the protection of highly vulnerable children.
The question for the Minister is, how do we avoid the loss of everything else that comes with a successful prosecution, and how do we ensure that local authorities learn the lessons and are accountable? If local authorities are repeatedly using illegal, unregistered children’s homes, there is obviously a wider issue. How do we create a process that leads to change in the purchaser—the local authority—too? Indeed, that point has been made not just by me, but by the Children’s Commissioner. On page 8 of the report she submitted in written evidence, under the heading “Missing from the Bill”, she says:
“However, it is also crucial that local authorities and, where they exist, regional care co operatives are accountable for the use of illegal homes in their area.”
Will the Minister amend the clause to bring about that element of symmetry? Obviously, we want to make it easier to hold those running unregistered homes to account, but we also want to bring about change in the authorities that are commissioning and using them.
I also wonder how much the Department thinks might be raised from these fines. Does it have any expectation about that? The clause covers monetary penalties for registered providers who do not comply with an improvement plan notice. The Minister will have gathered, given that we are a bit sceptical about the improvement plan approach for more serious cases, that we worry that those fines will not change enough either. In proposed new section 30ZC(1) of the 2000 Act, the Bill talks about penalties where
“the CIECSS is satisfied on the balance of probabilities that the person has failed to comply with…an improvement plan notice”.
Both parts of that equation seem like things that are likely to end up in litigation.
I have a couple of specific questions about clause 12. What level of fines does the Minister expect Ofsted to use these powers to levy? The Bill leaves them potentially unlimited, so I want to get some sense of what he thinks they will look like in practice. On a small note about incentives, a wise man said, “If you show me the incentives, I’ll show you the behaviour.” At present, the DFE says that the fines moneys will go into the consolidated fund and help pay for public services generally, but incentives are quite important. I wonder whether Ministers might find they get a more powerful crackdown on these activities if they change the incentives by ringfencing fines for supporting looked after children.
Last but not least, I have a question about proposed new section 30ZC(3). Is it the intention that fines may never be imposed where the person has any previous conviction for running an unregistered home, or does the subsection apply only on a case by case basis, so they cannot be fined for the same individual instance? The Minister used the expression “same conduct”, and I was not clear whether that means, “I can’t give you a regulatory fine if, in this individual instance, you’re being prosecuted,” or if it means, “If you or your group have ever been prosecuted before, then you cannot get a regulatory fine.” Could the Minister clear up that ambiguous phrase?
I will end where I started. I am totally sympathetic to Ministers’ intent here, but we worry that if we are not careful, there will be a lot of process and bureaucracy, which must not be allowed to get in the way of prosecuting those who are doing the wrong things, and must not be allowed to get in the way of keeping children safe.
I thank the shadow Minister for his contributions and questions. He made a number of practical points and asked a number of specific questions.
Order.
The Chair adjourned the Committee without Question put (Standing Order No. 88).
Adjourned till this day at Two o’clock.