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House of Commons

Friday 24 January 2014

The House met at half-past Nine o’clock


[Mr Speaker in the Chair]

Mr Philip Hollobone (Kettering) (Con): I beg to move, That the House sit in private.

Question put forthwith (Standing Order No. 163).

The House divided:

Ayes 0, Noes 35.

Division No. 192]





Tellers for the Ayes:

Mr Philip Hollobone


Mr David Nuttall


Alexander, Heidi

Berger, Luciana

Bottomley, Sir Peter

Burden, Richard

Crausby, Mr David

Creasy, Stella

Davies, Philip

Docherty, Thomas

Duncan, rh Mr Alan

Ellison, Jane

Field, Mark

Fitzpatrick, Jim

Freer, Mike

Goodwill, Mr Robert

Green, rh Damian

Gyimah, Mr Sam

Hamilton, Mr David

Hurd, Mr Nick

Javid, Sajid

Lewis, Brandon

McCarthy, Kerry

McClymont, Gregg

McVey, Esther

Milton, Anne

Murray, Sheryll

Phillips, Stephen

Rees-Mogg, Jacob

Rogerson, Dan

Sawford, Andy

Soubry, Anna

Spellar, rh Mr John

Stewart, Rory

Swire, rh Mr Hugo

Thurso, John

Timpson, Mr Edward

Tellers for the Noes:

Mr David Evennett


Mark Lancaster

Question accordingly negatived.

24 Jan 2014 : Column 558

Leasehold Reform (Amendment) Bill

Bill, as amended in the Public Bill Committee, considered.

Third Reading

9.44 am

Mr David Nuttall (Bury North) (Con): I beg to move, That the Bill be now read the Third time.

I am moving Third Reading, Mr Speaker, with the consent of my hon. Friend the Member for Kettering (Mr Hollobone), who is the Member in charge of the Bill.

The Bill will make a small change, but one that will be very important for those affected, to the law on the process by which tenants can take advantage of the right to participate in collective enfranchisement and extend the leases of their flats. I am conscious that the Bill was not debated in the Chamber on Second Reading and that this morning provides the only opportunity to explain its purpose and the reasoning behind it. For the benefit of the House, I will set out the current position and the change the Bill seeks to make.

The Bill is, I fear, a rather complex and technical measure, but I will endeavour to explain it as simply as possible. We are fortunate that the issue in question has been the subject of litigation, although I am sure that the participants in the litigation did not think that it was at all fortunate that they were so involved. It does mean, however, that we can use a real-life case to illustrate the problem that the Bill seeks to solve.

First, let me place on record my thanks to my hon. Friend the Member for Kettering, who presented the Bill as I was not able to attend the House on the date set for the presentation of Bills. He has calmly and without complaint fielded the many inquiries that have arisen as a result of the Bill’s title. I must apologise to the many people outside the House who have corresponded with me about leasehold reform and who had rather more ambitious aims for this Bill, and I regret that they might be somewhat disappointed by its lack of content.

Sir Peter Bottomley (Worthing West) (Con): I am grateful to my hon. Friend and our hon. Friend the Member for Kettering (Mr Hollobone) for bringing the Bill this far. May I sympathise with him and say that rather than putting the load of necessary leasehold reform and so on on to this Bill, which would not get through the House if it were expanded, we ought to try to ensure that we in this House, the Government and the property chamber bring together the problems, abuses and difficulties that leaseholders face and see whether we can find simple ways of making their lives easier and better?

Mr Nuttall: I am grateful to my hon. Friend for that intervention and I know that he has a specific and long-standing interest in leasehold reform. He is right to draw the House’s attention to the fact that this area of law is complex by any measure. Many outside the House also feel that it would benefit from simplification, whether by the Law Commission or by the Government of the day pulling together the different pieces of legislation that govern the leasehold tenure provisions. There is plenty of scope for improvement, and I think he would agree with me on that.

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As I said, I fear that those outside the House who have an interest in this area of law had rather ambitious hopes for the Bill when they saw its title appear on the Order Paper. However, as my hon. Friend will know, it is not really appropriate for a private Member’s Bill to try to deal with all the matters that he may have in mind and would like to see resolved in future; it would run into all sorts of problems in the House if it did.

Hon. Members will appreciate that private Members’ Bills are fairly narrow; they have to be, if they are to make progress. It is not usual for them to make whole-scale changes to a particular area of law. I should add at this point that unusually for a private Member’s Bill that has reached this stage—Third Reading, the final stage in its legislative process through the House—this is a genuine private Member’s Bill. I say that not in any way to belittle private Members’ Bills that contain legislative proposals suggested by the Government of the day, because invariably—indeed, as we have seen in every Session of this Parliament—those Bills contain sensible measures, which are welcomed by those affected. However, this legislation demonstrates that it is entirely possible for a Bill to make progress through the House even though it was not originally conceived within Government.

I have referred to the Bill as a genuine private Member’s Bill. However, I must pay tribute to the work of the Association of Leasehold Enfranchisement Practitioners, which brings together both solicitors and valuers who act on behalf of landlords and tenants in respect of collective enfranchisement and lease extension matters. It seeks to promote best practice and has been campaigning for improvements to the legislation dealing with leasehold tenure, which, as I said, is a particularly complicated area of law. In particular, I wish to place on the record my thanks to Mr John Midgley, the property enfranchisement partner at Seddons solicitors and a member of the advisory committee of ALEP, for his sage advice and assistance.

There are traditionally two types of tenure of land in this country: freehold and leasehold. An owner of the freehold interest in land may either retain the right to occupy that land themselves or choose to allow someone else to occupy the land for a fixed period. The terms and conditions that govern the relationship between the freeholder and the holder of the lesser interest in the land—the leaseholder—are set out in a document that we all know as a lease.

Initially, owners of long leases of dwelling houses were given the right to buy the freehold interest in the land on which the dwelling house was built by virtue of the Leasehold Reform Act 1967. However, that Act applied only to houses; people who lived in flats were excluded. Some 26 years later, long leaseholders living in blocks of flats gained what was called a collective right to buy the freehold of the blocks they lived in under the terms of the Leasehold Reform, Housing and Urban Development Act 1993. That Act also provided for a leaseholder to acquire a new lease to extend the period of years for which they held the property.

To commence the process by which the right of collective enfranchisement can begin it is necessary for a tenant to serve on their landlord a notice pursuant to section 13 of the 1993 Act. A similar notice is required under section 42 of the Act to trigger the statutory

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procedure to enable a leaseholder to acquire a new lease. Currently, where a leaseholder wishes to give notice under either section 13 or section 42 of the 1993 Act, section 99(5)(a) provides that any notice served pursuant to either section 13 or section 42 must be—and this is the crucial part of the Act that we are hoping to remedy—

“signed by each of the tenants, or (as the case may be) by the tenant, by whom it is given”.

As I will explain, that statutory provision has been interpreted by the courts to mean that the notice must be signed personally by the tenant. Normally, solicitors can, and frequently do, sign legal documents for and on behalf of their clients. It is also normally possible for any person who chooses to do so to execute a power of attorney to appoint someone else to act on their behalf and sign legal documents on behalf of the donor of the power.

Unusually, in my experience, this is one area of law where even a person holding a valid power of attorney would be prohibited from signing the notice on behalf of the donor. As the House can doubtless immediately imagine, that could have potentially devastating consequences for the affected person. Incidentally, the same problem would arise where someone was appointed by the Court of Protection to manage the affairs of someone else who, by reason of mental incapacity, was unable to manage their own affairs. That would happen if an individual became mentally incapable of managing their own affairs but had not previously entered into an enduring power of attorney, or what is now called a lasting power of attorney; the difference between the two terms is of little relevance.

Before I proceed further, it may assist the House if I refer to St. Ermin’s Property Company Ltd. v. Tingay, the leading case on this issue. It concerned the validity of a notice given under section 42 of the 1993 Act. I will refer to the facts of the case, as set out in the judgment of Lord Justice Lloyd, sitting in the chancery division of the High Court of Justice, on appeal from the decision of His Honour Judge Morgan, sitting at Staines county court.

In this case, the tenant of a first floor flat situated at 10 Hill Court on Wimbledon Hill Road in London SW19 held her property under a lease dated 14 May 1976, which granted her and her husband a lease of 60 years less a few days. She maintained that the flat was occupied by her as her only or principal home for almost the whole of the 10-year period up to the date on which the notice was given, which was 11 October 2000. The tenant was elderly. By the time the High Court judgment was given on 19 July 2002, she was less than a month short of her 90th birthday.

In March 2000, the tenant moved out of the flat into accommodation in which her needs could be better attended to. In anticipation of her deteriorating health, this elderly lady had done what we would think of as the right thing to do: executed an enduring power of attorney that gave general authority to her son and daughter to act—jointly and separately—on her behalf.

The elderly lady’s lease was one to which the provisions of the 1993 Act applied, thus allowing her to claim the grant of a new lease. Accordingly a notice was given under the terms of section 42 and, pursuant to the

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power of attorney, it was signed by her son. The landlord served a counter-notice that made four points, one of which was that the notice did not appear to be in the correct form. The landlord then commenced legal proceedings to seek a declaration that the tenant had no right to acquire a new lease and that the notice was invalid or defective.

At the county court hearing, the judge followed a 1998 decision of His Honour Judge Cowell in the West London county court and held that the notice was not valid. However, the judge gave permission to appeal because the point was not covered by any authority higher than the county court.

I shall quote directly from the High Court judgment of Mr Justice Lloyd, as he set out the problem succinctly. He said:

“It is a short point, but a somewhat puzzling one…As a general proposition things that can be done by an individual may be done either personally or by a duly authorised agent. That is true under the common law generally, and under statute. There are, however, exceptions. In some cases the provision which allows for, or requires, the thing to be done also prescribes that it must be done personally and not by an agent. In other cases, the nature of the thing is such that it requires personal skill or discretion, and cannot be delegated.”

Counsel for the tenant argued that to construe section 99(5)(a) would produce unintended anomalies, but the judge held:

“However, whatever anomalies this provision may produce, or however much of a trap it may be for tenants and their advisers, I agree with His Honour Judge Cowell that the distinction drawn in the construction (in the sense of putting together, as opposed to reading) of sub-s (5), between the method of signature of notices under s 13 or s 42 on the one hand, and other notices on the other hand, is so clear and so plainly deliberate that I cannot give s 99(5)(a) the meaning that it would have in isolation, and I must interpret it as requiring personal signature by the tenant, and not permitting signature on her behalf by anyone else, whether an ordinary agent or an attorney.”

Sir Peter Bottomley: Will my hon. Friend give way?

Mr Nuttall: I shall, although I am in the middle of a quotation.

Sir Peter Bottomley: I apologise; I did not have foresight.

May I, through my hon. Friend, put it to the Minister that the Government need to consult senior judges to determine whether, following this Bill becoming an Act, an overall provision is required so that any other unintended consequences arising from the use of the word “personally” can be sorted out without relying on good-natured Members to promote Bills that make minor amendments to major Acts that affect good people?

Mr Nuttall: I am grateful to my hon. Friend for his submission to the Government as it might well be that such a problem exists in other aspects of our body of legislation. I agree that passing a catch-all provision would make corrective legislation such as this private Member’s Bill unnecessary.

The High Court judgment continued:

“A signature by an attorney is still a signature on behalf of the tenant rather than one by the tenant, in the terms of s 99(5), and would therefore be valid for the purposes of s 99(5)(b), but not valid for the purposes of s 99(5)(a).”

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The judge went on to say:

“I would only add that another respect in which a distinction was drawn in the legislation between a personal act and an act by an agent is to be found in the provision that I have mentioned, s 42(3)(e), under which the tenant’s notice may state the name of a person appointed by the tenant to act for him in connection with his claim.

One might think it curious that the notice has to be given by the tenant, personally, in a situation in which the tenant has already decided that dealings in connection with the claim are to be with some other person, whether an attorney, a solicitor, valuer or whoever it may be, but the distinction is clear and it is, of course, even clearer in the context of s 99(5) itself. I mention s 42(3)(e) because it shows that in the wider context of the legislation there is other provision, which draws the same distinction.

For those reasons, which are much the same as Judge Cowell in Viscount Chelsea v. Hirshorn…I hold that a notice under s 42 can only be signed by the tenant, personally. A signature by an attorney is invalid, and I therefore dismiss this appeal.”

I think that that case clearly and vividly demonstrates not only why the Bill is such an important measure, but why it is important that legislation passed by the House is carefully scrutinised and that every effort is made to consider all possible unintended consequences of new laws.

I submit to the House that there are five simple reasons why it is right that the Bill should be passed. First, the problem does not apply to leaseholders seeking to exercise their rights under the Leasehold Reform Act 1967. Someone living in a house does not have a problem; it is only leaseholders of flats who are affected by the provision in the 1993 Act. Secondly, in respect of flats, the requirement for personal execution does not apply to landlords, so why on earth should tenants be disadvantaged in such a way when landlords are not?

Thirdly, the Bill does not apply to other notices required to be served under the 1993 Act. It is purely the initial trigger notices that have been found to need a personal signature. Fourthly, the Bill will remove the disadvantage faced by tenants who, perhaps because of mental incapacity or physical disability, are unable to sign. Fifthly, the Bill removes the problems faced by tenants who are temporarily absent from the country, be that on business or on holiday. Bizarrely, if a tenant dies having occupied a qualifying property for two years prior to their death, it is possible for the executors or administrators of their estate to serve a valid notice on the landlord, provided that they do so within two years of the issue of a grant of representation, so someone cannot sign a notice validly if they are alive, but their executors can if they are dead.

The House will be aware that the Bill was amended in Committee. I place on record my thanks to all those who agreed to serve on the Committee. The Committee’s sitting will always live in my memory and was particularly poignant because it was the very last time that I spoke to Paul Goggins, the late Member for Wythenshawe and Sale East, who graciously agreed to serve on the Committee. I remember that, as I left the room, he spoke to me for the last time to thank me for my work on this matter.

The amendments agreed to in Committee essentially made two changes to the Bill. First, they provided that the Bill would not apply to Wales. Since the 1993 Act was enacted, housing matters have been devolved to the Welsh Assembly. Consequently, even if the Bill reaches the statute book, the requirement for tenants to sign notices personally under sections 13 and 42 of the 1993 Act will remain in Wales, unless the Assembly chooses

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to pass a similar measure. The second small change made in Committee provides for the Bill to come into force two months after the date on which it receives Royal Assent, rather than the one month stated when the Bill was first published.

Tenants who are interested in taking advantage of their rights under the 1993 Act but who may be put off by the complexity of it all will be relieved to know that help is available from a range of sources, including the Leasehold Advisory Service, which published a guide to collective enfranchisement called “Getting Started.” I apologise to that body because, if this Bill is enacted, it will have to amend that document. As page 13 of the guide, which details what is required in the initial notice, correctly states:

“The Notice must be signed by all the participating tenants; no one can sign on their behalf.”

If we are successful in getting the Bill on to the statute book, the wording will need to be revised. I suggest: “The notice must be signed by, or on behalf of, all the participating tenants.”

A private Member’s Bill will generally not make any progress unless it has at least the tacit support of the Government of the day. I am grateful to officials in the Department for Communities and Local Government for recognising the strength of the arguments in support of this small legislative change. I thank them for their help and advice on drafting, and on the technical aspects of the Bill. I also thank the Government and Her Majesty’s Opposition for supporting the Bill. I thank the staff of the Public Bill Office for helping me to navigate the legislative pathway that a Bill of this nature has to follow.

Finally, to aid the understanding of Members and the wider public, explanatory notes were prepared and published with the Bill, but following the minor changes made in Committee and in order to bring the explanatory notes in line with the usual format, it is intended that the notes will be slightly amended and reissued before the Bill is considered in the other place, if it is read a Third time this morning. The Bill is a small but important measure, and I commend it to the House.

10.15 am

Andy Sawford (Corby) (Lab/Co-op): I congratulate the hon. Member for Bury North (Mr Nuttall) on championing the Bill through its various stages. I also congratulate the hon. Member for Kettering (Mr Hollobone), my constituency neighbour, who is the Member in charge of the Bill. Although there are many matters on which we differ, instead of rehearsing our disagreements, as happens all too often in this place, we are focused on those causes on which we can agree, particularly our joint campaign to improve our local hospital. I am pleased today to find common cause with him and with the hon. Member for Bury North, who has spoken so strongly in support of the Bill and has set out why the change is needed.

As the hon. Member for Bury North said, this is a simple but important Bill that seeks to address a technical issue that can be frustrating for leaseholders trying to exercise their rights to collective enfranchisement or to a lease extension, without unduly affecting landlords in the process. The Bill aims to remove the need for

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individual tenants to sign notices personally, and he has set out a wide range of cases in which that has been a real difficulty for people, no doubt including my constituents. Although I have not been approached on this subject directly, I am sure from his examples that many people across the country have been affected.

The Bill would give solicitors, or someone else duly authorised on a tenant’s behalf, such as an attorney, the ability to sign the notices. It is more than 20 years since the Leasehold Reform, Housing and Urban Development Act 1993 was enacted, since when there has been significant amending legislation: the important Commonhold and Leasehold Reform Act 2002, which was passed by the previous Labour Government. The 2002 Act gave important new rights to tenants, but over the years it has become apparent that there are still anomalies in the law that should be addressed. One of those anomalies, as the hon. Gentleman said, relates to the signing of notices under sections 13 and 42 of the 1993 Act. Currently, the notices must be personally signed by the individual tenant, which can cause problems, for example when a tenant has a disability and has given power of attorney to a third party, or when notices need to be signed by tenants based overseas. In many other areas, it is possible for a solicitor or other authorised representative to sign on an individual’s behalf, but as the law currently stands, that is not possible for signing notices under sections 13 or 42. The Government have been encouraged in this brief debate to consider other areas of the law in which that is a problem, but it must be right that, having so clearly identified the anomaly as a problem in respect of leasehold, we take action.

If a tenant cannot sign personally, no claim for a lease extension can be made. In the case of collective enfranchisement for the acquisition of a freehold, that may be prejudicial to getting a sufficient number of people involved. We therefore welcome the Bill making the necessary changes, and we will support its passage through the House.

I very much support the view expressed by the hon. Gentleman that it is right for Back Benchers not only to scrutinise and seek to improve legislation initiated by the Executive, but to seek to introduce legislation in this House in the interests of their constituents and the country. I fully support him in hoping that not only this but other private Members’ Bills, including my Bills, which are further down today’s Order Paper, may pass through this House.

10.19 am

Mr Philip Hollobone (Kettering) (Con): The only connection I have with this Bill is that I was the hon. Member who had the privilege and honour to present it to the House. Any credit owing to it lies entirely with my hon. Friend the Member for Bury North (Mr Nuttall), who has brought to it and to this House his extensive professional experience in the law, acquired before he entered the House, and his diligence in scrutinising legislation and seeing how the law might be amended to the benefit of his constituents and the country as a whole. That has been exemplified in the way in which he has guided this Bill through the House.

When you read the Bill and explanatory notes in preparing for this morning’s debate, Mr Speaker, you will have seen how short they are. We have two pieces of

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paper—a green piece for the Bill and a white piece that explains it. The Bill is short, effective and to the point, and it does what it says on the tin. It exemplifies legislation that is drafted by Back Benchers and brought to the attention of the Executive of the day, draws on the advice and expertise that Government counsel can provide to tweak it to make it perfect, and is then steered through this House. I hope that its commendable example will be followed in relation to other Bills brought before the Chamber.

I thank my hon. Friends the Members for Wellingborough (Mr Bone), for Christchurch (Mr Chope), for Shipley (Philip Davies) and for Clacton (Mr Carswell) for jointly sponsoring the Bill and having the good sense and foresight to back it right at the start.

In his extremely interesting and informative remarks, my hon. Friend the Member for Bury North quoted at length from the legal judgment that made the case that legislation had to be defined as either personal or via an agent. This Bill has been introduced to the House via an agent—namely me, in the good name of my hon. Friend—and it will have the effect of changing the legislation for those who seek to enter into property matters. That has a nice symmetry that is entirely the responsibility of my good friend, my hon. Friend the Member for Bury North.

10.23 am

Sir Peter Bottomley (Worthing West) (Con): Some will know of the controversy there can be over Speakers. No one can be sure whether George Thomas was an avuncular member of the establishment or a firebrand maverick, but what is certain is that his name is associated with the leasehold reform of 1967. The conclusion of leases on houses in Wales had led to a terrible injustice, and he fought and gathered the forces to make reforms.

As my hon. Friend the Member for Bury North (Mr Nuttall) said, flats tend to be held under leases. It is fairly clear from the census that there are 5 million leaseholds. With, let us say, one and a half people per flat, that amounts to 7.5 million leaseholders. Half the properties in London are held under leasehold, and a growing proportion of new ones will be leasehold as well. We know about the scandals in the retirement sector. I will not go into the Office of Fair Trading report on what Peverel and Cirrus did in ripping off their leaseholders because it is not relevant to the Bill.

In making the change proposed in the Bill, we consider how two Government Departments and two extensions of Government ought to come together. What happens in the courts is mainly a matter for the Ministry of Justice. Some property issues are considered at leasehold valuation tribunals when there is a dispute between the leaseholder and the managing agent acting on behalf of a freeholder, and those bodies reach their conclusions. However, there is no method whereby Siobhan McGrath, who heads the MOJ’s property chamber, and the Department for Communities and Local Government can come together to consider what is coming up through the courts, the issues brought forward by Members of Parliament on behalf of their constituents, and what comes from the Government agency, LEASE, which is a source of information for leaseholders in trouble.

As my hon. Friend said, this Bill, which I hope will shortly become an Act, cures an unexpected court judgment over an unintended use of words which describe, though

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accurately, a false distinction between what a landlord or freeholder can do and what a leaseholder or those acting on their behalf can do. The arguments for the Bill have been put very plainly, and I will go no further in that respect. I will say, though, that matters of professional standards should be considered. I hope that those who look after the professional standards of lawyers—solicitors and barristers—and of accountants and surveyors will give guidance to their members as to whether they should use the nit-picking parts of the law as they see it while bouncing cases between the first-tier tribunal—the property chamber—and the county court, which leads to costs going up. That allows a very wealthy, well-resourced, clever, tricksy freeholder, or the managing agent working for them, to confound a leaseholder or an ordinary tenant. I would expect people in training for these revered professions to be told that if their conduct is clearly unjust—though it may be lawful—the professional standards bodies would consider a complaint against them.

My hon. Friends, with the co-operation of Opposition and Government Front Benchers, are curing one injustice, but many others need to be addressed. Over the next year and a half, we should aim to set up a way of gathering information on what can easily be done to make changes that improve the lives of ordinary people. We must ensure that those who are powerful, often greedy, and sometimes corrupt cannot make their living by ruining the lives of ordinary people, many of whom are elderly, vulnerable, poor and ill.

10.27 am

The Parliamentary Under-Secretary of State for Communities and Local Government (Brandon Lewis): I congratulate my hon. Friends the Members for Kettering (Mr Hollobone) and for Bury North (Mr Nuttall) on bringing forward this Bill. My hon. Friend the Member for Bury North has been leading on it since it was introduced by my hon. Friend the Member for Kettering in June last year. I congratulate him on the progress that it has made through this House so far and share his hope that it will continue to prosper.

People may sometimes wonder why in Parliament we go through very small details and take great pains to explain them, but that is important in enabling us to get on and get things done quickly. As my hon. Friend the Member for Bury North said, this Bill is a good example of that. It originally went through without debate, so when the courts looked at these issues they were unable to see the intent that Parliament had as regards their ability to qualify personally in any way other than that which they already had. The Bill is also a good example of why making a small difference is sometimes a very big deal for the people it affects.

In thinking about the help that this Bill can provide, particularly to vulnerable leaseholders, we should recognise that, as my hon. Friend the Member for Worthing West (Sir Peter Bottomley) pointed out, the residential leasehold market is a large, growing and important part of the housing sector. Leasehold plays a vital part in a functioning housing market, providing opportunities not only for home ownership, but for private renting. CentreForum’s recent useful report, “A new lease of life”, estimates that there are approximately 2.5 million leasehold properties across England, so a substantial number will potentially be affected by the Bill.

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Sir Peter Bottomley: The Minister rightly refers to the CentreForum report, which I think is one of the best reports produced in the past few years. Although the Minister uses its estimate, I think it would now accept that the census data mean that there are twice as many people involved. It may be possible for us to come to an agreement on what the numbers are—though not necessarily today—but we should try to use a figure that is more likely to be right.

Brandon Lewis: My hon. Friend makes a fair point. The reality is that, with every day that passes—certainly with every month that passes—the number of people accessing the market is likely to grow. That highlights the importance of the Bill. It appears, on the face of it, to be short and simple, but it is actually an example of the way in which Parliament sometimes has the ability to make a beneficial difference to people’s lives.

Leaseholds can be complex and problematic—hence the Bill. That is primarily because this is a sector in which a wide range of different interests—financial and otherwise—exist in the same property, which inevitably creates scope for conflict. Ultimately, this relates to people’s homes, an issue towards which we naturally have strong feelings of protection. I assure the House that I am aware of the range of issues that can arise, and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Keighley (Kris Hopkins), who has responsibility for housing, will be listening carefully to any concerns.

I thank members of the Committee who considered the Bill in December. In particular, I thank the hon. Member for Angus (Mr Weir) for chairing the Committee and presiding over a short but good-natured and constructive debate. Given the speed with which the Bill has progressed, it is important, as my hon. Friend the Member for Bury North has said, to put on record the intent, purpose and detail behind it so that, as my hon. Friend the Member for Worthing West has said, we do our bit to ensure that in future there are no further issues of interpretation with which a court might struggle.

It is a particular pleasure at this Friday morning sitting to welcome the cross-party support provided by the shadow Minister, the hon. Member for Corby (Andy Sawford), for which I thank him. I am pleased that, on the day of the Committee sitting, the hon. Member for City of Durham (Roberta Blackman-Woods)—who, as I understand it, stepped in at short notice—also gave cross-party support. I thank her for helping the Bill progress.

I endorse the tribute given by my hon. Friend the Member for Bury North to the late right hon. Member for Wythenshawe and Sale East, who was a member of the Bill Committee, which sat shortly before the Christmas recess. He is sorely missed by the House.

I am pleased to say that the Government fully support the Bill and will continue to do so as it goes to the other place, where I hope it will get a fair wind. As my hon. Friend has said, responsibility for it will pass into the hands of my noble Friend Baroness Williams of Trafford. I am confident that she will win wide support and sympathy for the Bill and steer it safely through the other place.

My hon. Friends the Members for Bury North and for Kettering are also to be congratulated on ensuring that the Bill can effectively achieve its worthwhile aim

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and that its extent is appropriate, thanks to some brief and well-targeted amendments that they, along with my hon. Friend the Minister for Housing, tabled in Committee.

By amending section 99(5) of the Leasehold Reform, Housing and Urban Development Act 1993, the Bill removes current restrictions on who can sign the legal notices required when leaseholders exercise certain statutory rights. The 1993 Act gave leaseholders of flats a range of very important rights. It is a valuable and effective piece of legislation, but it also includes a particular restriction, as we have heard, on signatories of notices. Removing that restriction is the focus of this Bill.

At present, the leaseholder of a flat who wants to extend their lease or take part in acquiring the freehold of their block must personally sign the legal notices required. No one else is allowed—even acting under a power of attorney—to sign on behalf of a leaseholder who is physically unable to do so. Case law confirms that the legislation that this Bill seeks to amend can be interpreted only as to require personal signature by the leaseholder, and that it does not permit signature on behalf of a leaseholder by anyone else, whether they be an ordinary agent or attorney. That includes when a leaseholder has become the subject of mental incapacity and the Court of Protection has issued a direction.

The High Court case of St Ermin’s Property Company Ltd v. Tingay in 2002 concluded that the signature of someone holding a power of attorney would not comply with the existing requirements of the 1993 Act. Put briefly, that particular appeal case concerned the validity of a notice given to the landlord by the relatives of an elderly leaseholder who had to move to accommodation where she could be better attended to. The relatives were acting under an enduring power of attorney that had been executed, giving them general authority to act on the elderly leaseholder’s behalf. The intention was to extend the lease of the flat using the statutory rights to ensure that the elderly leaseholder’s interests were protected. However, the High Court concluded that the legislation requires personal signature by the leaseholder and does not permit a signature on the leaseholder’s behalf by anyone else, whether they be an ordinary agent or an attorney.

That case is so important to the genesis of the Bill that I want to set out briefly a particular aspect of the judge’s summing up. He said:

“I find it difficult to understand quite why personal signature should be required in relation to a Section 42 notice by an individual tenant. However, the words of the Section are very clear.”

That backs up the point made by my hon. Friends the Members for Bury North and for Worthing West. The judge also said:

“One might think it curious that the notice has to be given by the tenant, personally, in a situation in which the tenant has already decided that dealings in connection with the claim are to be with some other person, whether an attorney, a solicitor, valuer or whoever it may be, but the distinction is clear and it is, of course, even clearer in the context of section 99(5) itself.”

The judge could not have set out the nature of the problem more strongly. He could find in the law—as it still stands—no scope for ambiguity and no opportunity to take a flexible approach. Hon. Members will be clear about the very serious hurdle that the current legislation presents to certain leaseholders. It is a problem that this House today has an opportunity to help remove.

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As the judge explained, we unfortunately do not know Parliament’s intention in framing section 99 as it did, because there was little or no debate about the issues. That highlights the Bill’s importance and I thank my hon. Friend the Member for Bury North for taking his time to go through exactly why it matters. The Government believe it is important to put clearly on the record why this Bill matters and the beneficial impact it could have. Should the judiciary come to look at the provision in future, I hope they will be able to see a clear outline of Parliament’s intent in framing it. As my hon. Friend the Member for Worthing West has said, it will allow the courts to consider the general intent of Parliament with regard to personal issues.

Sir Peter Bottomley: May I emphasise the point—although I do not think that judges need it to be over-emphasised—that most people give power of attorney or ask somebody else to sign for them when they are incapable of signing themselves? Broadly speaking, they tend to be the most vulnerable, such as the old, the infirm and people who have a condition that makes it impossible for them to write, even though they may have all their senses. For example, I have a constituent who has lost both his hands. How would he sign, except perhaps with a mouth brush? One way or another, the judiciary have to accept, or Parliament should enact, that unless a court believes there is a specific reason why signatures should be made personally, a signature should be allowed to be made on someone’s behalf if they are incapable or unwilling to do it themselves but wish the act to take place.

Brandon Lewis: My hon. Friend makes a good point. To reinforce his comments and because it is important to make clear the Bill’s intent in relation to giving people the ability to act sensibly and reasonably through a power of attorney and agents, I want to quote the judge again. Of the 1993 Act, he said:

“It seems to me that the words are clear and that whether there be good reasons, bad reasons or no reasons, the provision is clear. It is clearly deliberate, and the only way in which one could avoid giving the Section its literal effect is by finding that it produces some anomaly so serious that it cannot have been intended.”

He went on that counsel for the landlord

“submits that the reading, which does not permit a signature by an agent, does produce situations that cannot have been intended. The tenant in the present case is not, in fact, incapable, but what if she were?”

My hon. Friend outlined the case of someone who is vulnerable or incapable. The judge continued:

“Or what if the tenant were mentally capable but paralysed so as to be unable, physically, to impose anything by way of a signature on a document?”

All those issues need to be dealt with. The judge also said that

“whatever anomalies this provision may produce, or however much of a trap it may be for tenants and their advisers, I agree with His Honour Judge Cowell that the distinction drawn in the construction…of sub-section (5), between the method of signature of notices under section 13 or section 42 on the one hand, and other notices on the other hand, is so clear and so plainly deliberate that I cannot give section 99(5)(a) the meaning that it would have in isolation, and I must interpret it as”

—this is the important part of the quotation—

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“requiring personal signature by the tenant, and not permitting signature on her behalf by anyone else, whether an ordinary agent or an attorney.”

The Bill will rectify that problem.

Bob Stewart (Beckenham) (Con): I have been listening carefully. The Bill seems to be perfect. Everyone is in accord with it and thinks it is sensible. I just do not understand why we seem to be making a mountain out of a molehill, and why we cannot speed this up and just do it.

Brandon Lewis: I thank my hon. Friend for what I think is a helpful intervention, as well as for supporting the Bill. He is quite right. I suspect that one query received by my hon. Friend the Member for Bury North when the issue first came to his attention was that this is a 1993 Act and we are now in 2014—he introduced the Bill in 2013—so why has it taken so long to find a way of dealing with this problem? That is a reasonable question to ask, but the reality is that we now have the opportunity to correct the situation. It is quite right to deal with it, and I congratulate my hon. Friends the Members for Bury North and for Kettering on doing just that.

Mr Hollobone: I am following my hon. Friend’s excellent speech with great interest. He made a particularly powerful point about the value of scrutinising legislation. However, the benefits of the Bill will not extend to Wales, and premises in Wales will be unaffected by the changes. Can he hear the cries going up throughout Wales, in the valleys and elsewhere, “Let us have the Nuttall amendment or the Nuttall provision”? Will he do all he can, through his good offices, to provide the National Assembly for Wales with whatever assistance it needs to pass similar legislation?

Brandon Lewis: My hon. Friend makes an excellent point. I suspect people in Wales are thinking right now, in relation to their legislation, that a little bit of Nuttall in Wales would do them a whole world of good.

My hon. Friend the Member for Beckenham (Bob Stewart) queried why the change has not been made before. I appreciate that he came into the Chamber only a short time ago, but I again underline the importance of this debate as a chance for all hon. Members to put the clear intent of Parliament on the record. The requirements on signatories do not appear to have been debated during the passage of the 1993 Act, which is a good reminder of why it is sometimes important for parliamentarians to put clearly on the record why we do things, not just to assume that our intent in passing legislation is clear and obvious. It is a great testament to that point that we are doing this work this morning.

The existing restrictions perhaps aim to ensure that the individual leaseholder is fully aware of the commitment they enter into, given the significant financial liabilities that arise from serving the notices concerned. As my hon. Friend the Member for Bury North has outlined, the Bill will enable legal notices to be signed on the leaseholder’s behalf and that change will help, among others, those physically disabled, seriously ill or mentally incapacitated leaseholders who are currently unable to benefit financially and otherwise from the exercise of rights enjoyed by able-bodied leaseholders.

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The Bill is clearly focused on helping a particular group of leaseholders, many of whom are likely to be elderly and vulnerable. As such, it has received warm words of support from both sides of the House, which I am sure is appreciated by my hon. Friend. That reflects my hon. Friends’ efforts in gathering support for the Bill, and in highlighting the benefits that it will enable some currently frustrated leaseholders to enjoy.

The changes made by the Bill to the 1993 Act may affect only a relatively small number of leaseholders of flats in England, but they might be very important for those leaseholders currently unable, for one reason or another, to sign the requisite legal notices in person. As my hon. Friend the Member for Kettering has rightly pointed out, the Bill applies only to England, so I hope that the devolved Assembly will look at the provision and perhaps introduce it in Wales. As I have said, those helped by this Bill will often be elderly and more vulnerable leaseholders. The removal of current restrictions will also help those who are charged with looking after the financial affairs of a leaseholder. The example of relatives acting under a power of attorney was given by my hon. Friend the Member for Worthing West.

One sad situation that was brought to a colleague’s attention concerns an elderly leaseholder living in a leasehold retirement development who, because of severe illness, unfortunately had to go into a nursing home to be cared for. I give this example because it is important to provide some colour and life on exactly how the change will make a beneficial impact to people’s lives. The leaseholder’s relatives were looking after her financial affairs under a power of attorney, and could therefore deal with almost all matters that needed taking care of. As she became more unwell, it was necessary for her leasehold property to be sold to assist in paying the care home fees. That is where her relatives reached what can only be described as a bizarre situation: they could sell the flat using the power of attorney, but they simply could not act on her behalf to extend her lease. They therefore had the frustration and sadness of being unable to make the most of their elderly relative’s assets for her benefit simply because they were not permitted to sign the vital leasehold paperwork on her behalf. Had they been able to do so, it is very likely that the flat, with the attraction of an extended lease, would have secured a higher selling price, and maximising the value of their relative’s assets in that way would have helped meet the fees of a suitable care home for her final days.

It is important to give more examples of the people who will be helped by this Bill. For instance, limbless or severely injured Army veterans face many problems. They may wish to extend the lease on their home and to enjoy the financial benefits that such action could bring, but, owing to their disability, they might no longer be able to hold a pen and to sign vital papers. As the law now stands, for that reason alone they are frustrated from exercising their important legal right as the leaseholder. There is no way that that was the intent of Parliament when the Act was passed, and it is right to get through this Bill for that reason alone.

The Bill may help leaseholders living abroad who need to sign notices. For example, work may take the leaseholder of a flat abroad for a prolonged period. Without the ability to have someone act, with the

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appropriate authority, on their behalf in respect of the property, it may be difficult for them to exercise their statutory rights. Again, that was clearly not Parliament’s intent.

The Bill might also help an aid worker serving overseas in a remote location, where postal services are infrequent and unreliable. If they want to extend the lease on their property back home in England, they will need to receive a paper copy of a document, and they then have to sign and return it. In some parts of the world, even in today’s modern age, that can take months, involve worry and delay, and create problems about getting the work done. If the absent or incapacitated person is the sole leaseholder, even their husband or wife cannot validly sign notices on their behalf.

If an individual leaseholder who lives or works abroad is hindered in that way, it could have an unfortunate knock-on effect on other leaseholders in their block. For example—we have examples of this in this country—a group of leaseholders may want to exercise their collective right to acquire the freehold of their block, but to satisfy the qualifying criteria they may need one or more leaseholders who live or work abroad to sign the documents. Although the Bill would not make any change to leaseholders’ actual rights—we must be clear about that—it could helpfully remove a practical barrier to the efficient exercise of those rights.

Let us also consider an elderly person who is physically fit, but who for years has been accustomed to relying on their long-standing family solicitor to act for them in all legal and administrative affairs. They may decide to take part in the collective purchase of the freehold of their much-loved home, but in that case, the solicitor simply could not validly sign the documents on their behalf.

Since the 1993 Act, we have—I hope—become more aware of the challenges faced by individuals who become mentally or physically incapacitated for one reason or another. Sadly, as that Act stands, even someone acting under the direction of the Court of Protection cannot sign the requisite notices. A possible alternative could be for the leaseholder to take the major step of assigning the lease of their property to a trustee, and setting up what is known as a “bare trust”. Again, the decision on Tingay is very relevant. The counsel for the landlord states that

“it is possible to avoid difficulties of these sorts. What one could do would be to assign the lease to one or more trustees, who would hold it on a bare trust for the former tenant, who could serve a notice relying on the qualifying—”

Madam Deputy Speaker (Dawn Primarolo): Order. I have been listening carefully to the Minister and to what has been said previously, and I think he is taking rather a long time to make his point. We do not need to go through all those case studies because everybody in the House is clear, and what the Bill does has been mentioned several times. I would be grateful if he would make a little progress.

Brandon Lewis: I appreciate your point, Madam Deputy Speaker, but I was just giving a two-line quote before summing up the debate. We must bear in mind that this Bill is before the House today because previously, Parliament was not that specific or clear about its intent, and that is what Members have been debating this morning.

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Unfortunately, the creation of a bare trust is not a practical option for many people. The procedure could well be cumbersome and expensive to use, and the decisions and processes involved would place a heavy burden on a vulnerable leaseholder.

It may be helpful to the House if I—very briefly, Madam Deputy Speaker—explain the amendments made to the Bill in Committee, which are reflected in the version of the Bill before the House today. The minor and technical amendments were intended to ensure that the proposed amendment to section 99(5) of the Leasehold Reform, Housing and Urban Development Act 1993 fully achieves its aims and is appropriately drafted. In particular, a small amendment was made so that, provided it completes all its parliamentary stages and receives Royal Assent, the resultant Act will come into force two months after it is passed, as is the usual convention, rather than after only one.

It was also necessary to address the extent of the Bill. The 1993 Act applies to England and Wales, but in the 20-odd years since then much has changed, and housing is now, of course, a devolved issue in the Principality. It was therefore essential to ensure that the Bill does not affect the existing application of section 99(5) to Wales—my hon. Friend the Member for Kettering highlighted that point. In other words, the provisions in the Bill would apply only to residential leaseholders of flats in England.

The Bill will offer help and hope to some leaseholders who might otherwise face an insurmountable hurdle in seeking to exercise their rights. It will also, I hope, give greater peace of mind to the families and friends who care for them. I am pleased to give the Government’s support to the Bill. I hope it will receive Third Reading today and pass successfully through the House of Lords and receive Royal Assent.

10.54 am

Mr Nuttall: With the leave of the House, I thank all hon. Members who have spoken in support of the Bill this morning, including my hon. Friends the Members for Kettering (Mr Hollobone) and for Worthing West (Sir Peter Bottomley), and the hon. Member for Corby (Andy Sawford). I also thank the Minister for the Government’s support for the Bill. As has been said, it is a short but important measure which has the capacity to improve the lives of those who will be affected. They will be extremely grateful that the House has taken the time and trouble to pass this small measure this morning, and I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read the Third time and passed.

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Deep Sea Mining Bill

Consideration of Bill, as amended in the Public Bill Committee


Amendments of Deep Sea Mining (Temporary Provisions) Act 1981

10.55 am

Kerry McCarthy (Bristol East) (Lab): I beg to move amendment 1, page 5, line 32, insert—

‘In section 5 (Protection of the marine environment) leave out sections (1) and (2) and insert—

“(a) In determining whether to grant an exploration or exploitation licence the Secretary of State must not grant a licence unless and until it can be demonstrated that there are no indications for likely irreversible and or significant adverse effects as defined by the United Nations’ General Assembly / UN Food and Agricultural Organisation on the marine ecosystems and communities impacted by one or more of these operations. The absence of any such indications must be demonstrated through full and transparent prior environmental impact assessments and strategic impact assessments, which are required to be publicly evaluated and reviewed.

(b) In determining whether to grant an exploration or exploitation licence the Secretary of State must take into consideration the environmental definitions and designations of international bodies, including but not limited to the Convention on Biological Diversity (CBD) scientific criteria for ‘Ecologically or Biologically Significant marine Areas (EBSAs)’, the CBD guidance for the design of representative networks of Marine Protected Areas (MPAs), and the food and Agricultural Organisation (FAO) criteria for the identification of ‘Vulnerable Marine Ecosystems’ (VMEs) and any other related treaties which may come into force.”.’.

The amendment seeks to improve the environmental requirements of the licences that come through the UK state system. I thank the World Wildlife Fund UK for its help in drafting the amendment, which it stresses is not “wildly ambitious”. It does not express environmental ideals that are impossible to achieve, but it is consistent with environmental definitions in existing international treaties.

The deep seas are poorly understood ecosystems and no one knows exactly what is down there. The findings of environmental assessments are not shared, so scientists and non-governmental organisations do not know whether there are things that are new, rare, endangered, or indeed that could be used for other extractive purposes—for example, the pharmaceutical industry might well be interested in what is on the sea bed.

I was concerned that on Second Reading some Government Back-Bench Members who did not see a need to improve environmental safeguards were working on a misguided assumption that, as one said, the environmental effect of mining is not permanent

“and the habitat will return to its normal state after the mining ceases in an area.”—[Official Report, 6 September 2013; Vol. 567, c. 610.]

As we discussed in Committee, however, without better measures in place to protect deep sea ecosystems, mining could cause irreversible damage or have serious adverse effects on marine communities, specifically hydrothermal vent communities, which were only discovered in 1977,

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and seamounts, which have taken 10,000 years to develop and have low resilience to change. As home to the largest reservoir of marine genetic resources, hydrothermal vent communities are of huge interest to science and pharmaceutical companies, some of which have patents on their products. Mining could destroy those resources before they are understood or even discovered.

The amendment would reverse the burden of proof in section 5 of the 1981 Act, in line with the precautionary principle that if there are indications of likely but uncertain significant adverse environmental impacts, an activity should not be authorised to proceed. The amendment would require environmental impact assessments to be carried out before exploration or exploitation takes place, and for the process to be transparent so that it can be publicly evaluated. That would also address the serious weakness in the system that if a contractor considers the environmental risk of mining to be too high prior to the environmental impact assessment, that concession could still be offered to another contractor.

Greater transparency in the system would also help to address weaknesses in monitoring the compliance of companies with environmental regulations and the terms of licences. It is difficult, as one can imagine, to make site visits in deep sea areas to ensure that work is carried out correctly, and the current process is not properly independent of contractor influence. NGOs will not know whether an activity authorised by licence is damaging, and it would be up to the contractor to stop and self-assess.

I was pleased that in Committee, the Minister—on that occasion the Minister for Europe—confirmed that the Government want a coherent system between the International Seabed Authority’s regime and other international treaties. The amendment also seeks to align the Bill better with environmental definitions and designations of international bodies, which the Bill currently does not consider. For example, the Food and Agriculture Organisation’s committee on fisheries defines vulnerable marine ecosystems in the high seas where bottom fishing cannot take place. Those include breeding grounds for orange roughy, which are often fished for around hydrothermal vents—the same areas that could be open to deep sea mining.

Although the Bill’s promoter, the hon. Member for North East Cornwall, has said—

Sheryll Murray (South East Cornwall) (Con): I just want to make the hon. Lady aware that my constituency is South East Cornwall.

Kerry McCarthy: I am terribly sorry. South East Cornwall is written in my notes, so I do not know why I said North East Cornwall—territorial ambitions do not stop at the deep seas.

11 am

The hon. Member for South East Cornwall (Sheryll Murray) has said that the UK needs to amend the 1981 Act to impose stringent and clear environmental conditions, but the Bill will not actually strengthen, or indeed make

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any changes to, the environmental provisions set out in section 5. That is the nub of our concern. In fact, section 5, which states that the Secretary of State

“shall have regard to the need to protect (so far as reasonably practicable) marine creatures…and other organisms and their habitat”,

is even weaker than the ISA’s current environmental thresholds, which set a threshold of “serious harm” to the marine environment to disapprove a licence.

Section 5 is very outdated, with its use of words such as “regard”, “reasonably practical” and “creatures”. It allows for subjective interpretation and is not specific enough. I am surprised that the Government have not sought to update it. To quote the Minister who spoke on Second Reading, the right hon. Member for North East Bedfordshire (Alistair Burt),

“environmental protection is at the heart of the application that is made by the United Kingdom when sponsorship applications are made.”—[Official Report, 6 September 2013; Vol. 567, c. 633.]

My hon. Friend the Member for Brent North (Barry Gardiner) put forward the need for the section to be improved. The right hon. Gentleman made a commitment that the Foreign and Commonwealth Office would take a “hard look” at whether section 5 needed to be strengthened. The Minister did not elaborate further in Committee. I am not sure whether the Minister present today can respond to my amendment by giving further evidence of the findings of any investigation that the FCO carried out after Second Reading. I got the impression in that debate, as did others, that the Government might be open to improvements along those lines.

Mr David Nuttall (Bury North) (Con): It was made clear on Second Reading that companies wishing to exploit minerals on the sea bed had the opportunity of essentially shopping around the world and that they could apply for a licence wherever they wanted to. Is the hon. Lady concerned that if we have provisions in our legislation that are more onerous and demanding than those of other countries, we might be doing the sea bed a disservice, because those companies might obtain a licence elsewhere in order to avoid our legislation?

Kerry McCarthy: The hon. Gentleman makes a valid point. Indeed, my understanding is that at the moment a company does not even need a licence to explore. Ideally, we would want everyone to go through the ISA regime, and a respectable and reputable company would want to do that and follow the correct procedures, but I understand that there is nothing stopping them doing that. It is an ideological debate that we could have at great length in relation to many different areas of policy. We could look at labour terms and conditions, for example, or health and safety rules. I do not think that we should be involved in a race to the bottom—actually, perhaps that is exactly what we are talking about. We want to ensure that the UK sets an example by requiring companies to act responsibly. Our natural resources are incredibly precious, and I think that we should be taking the lead in trying to ensure that we protect the environment.

The timing of the Bill is slightly strange, as was the timing of the 1981 Act. The Act was introduced a year before the United Nations convention on the law of the sea was finalised, although it then took about eight years to come into effect. The ISA will look at its

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regulations, which will obviously apply on a wider basis, next year, so in some ways the Bill pre-empts that. Perhaps there could have been better co-ordination. It is also slightly strange that we have been talking about updating the 1981 Act since 1982, so it has taken an awfully long time to reach this point. I think we need to drive the agenda forward. I accept that we do not want to disadvantage British companies, but we want to ensure that there is a reputable and reasonable regime in place.

The Government have said that

“the environmental protections in section 5 of the 1981 legislation have proved entirely sufficient, as have the inspections”,

but only two licences have been issued so far, both for exploration. Exploitation of resources is an entirely different matter, and the very purpose of the Bill is forward thinking, to cover licences for exploitation that is at least five years away. In the case of oil and gas, which it will also open the doors to, it is still further away in the future.

If the amendment is made, I do not think that it would make the regime overly burdensome. As I have said, the proposal is moderate and consistent with other international designations. However, it would boost one of the Government’s reasons for introducing the Bill, which is to help to increase the UK’s influence in current negotiations and in determining standards, as I said to the hon. Member for Bury North (Mr Nuttall). I appreciate that the ISA regulatory framework is of greater importance because it applies to all deep sea mining, not just those activities that get sponsorship from the UK. In which case, let us apply the environmental standards that we would like to see agreed in the negotiations, rather than keep the 1981 version. They are workable standards that we hope will be applied at ISA level to enable sea bed mining to go ahead without causing irreparable damage. As I mentioned, I did not get a direct response from the Minister in Committee on the level of environmental safeguards that the Government are seeking to get common agreement on during the ISA negotiations, although I was pleased that he made it clear that the international framework can and should be improved, as can section 5.

Sheryll Murray: I thank the hon. Member for Bristol East (Kerry McCarthy), who, along with her colleagues the hon. Members for Brent North (Barry Gardiner), for Stoke-on-Trent North (Joan Walley), for Scunthorpe (Nic Dakin), for North Ayrshire and Arran (Katy Clark), for Inverclyde (Mr McKenzie) and for Edinburgh North and Leith (Mark Lazarowicz), and the hon. Member for Brighton, Pavilion (Caroline Lucas), tabled the amendment. I know that they all feel strongly about the need to protect the environment.

Coming, as I do, from what I consider to be the beautiful county in Cornwall, I of course sympathise strongly with those hon. Members. [Interruption.] The Minister indicates that I might come from the second most beautiful county, so perhaps I should have referred to the wider south-west. Furthermore, I come from a fishing background, so I know well the impact that pollution can have on fishermen and their livelihoods. I also know that in some of the areas that the Bill relates to it would be very difficult to fish for species such as orange roughy, as the hon. Member for Bristol East indicated.

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Since I have been in charge of the Bill, I have learned a lot about deep sea mining. In particular, I have become very conscious of the importance of environmental conditions, which will have to be taken into account once deep sea mining becomes a reality. Of course, we are looking only at exploration. I understand that the UK has issued one licence for exploration, and another one is going through, but exploitation, as the hon. Lady mentioned, is a long way off. I know that the Government are very aware of environmental issues and am sure that they will keep to their commitment to ensure the application of the highest environmental standards. I can assure Members on both sides of the Chamber that I, too, will be very astute to ensure that happens.

Section 5 of the 1981 Act will not be amended by the Bill, except for technical changes to include references to Scottish Ministers. I believe that that is a real benefit to Scotland and the United Kingdom. Section 5 already includes provisions to ensure that protection of the marine environment is taken into account, and indeed is at the forefront of the Secretary of State’s mind, when licences are issued. While I sympathise with the hon. Lady’s concerns, I do not think the amendment is necessary. I understand also that the Minister will raise some technical objections to it and that the Government will not support it. In those circumstances, I hope that she will not press the amendment, so that the Bill can make progress.

The Minister of State, Foreign and Commonwealth Office (Mr Hugo Swire): I was interested to hear some of the suggestions made this morning, as I have attended some, although not all, of the consideration of the Bill as it has made progress. The Government completely understand the sentiments that have led the hon. Member for Bristol East (Kerry McCarthy) and the hon. Member for Brent North (Barry Gardiner) to table the amendment —the hon. Gentleman is not in his place today, but he has been an assiduous attendee previously. The Government are committed to ensuring that the highest environmental standards are followed when exploration and exploitation of the deep sea bed take place. As the hon. Lady said, we are often—pardon the pun—in uncharted waters: this is new and exploratory, so environmental considerations need to be at the forefront of our proposals.

As hon. Members will know, the Government were approached 18 months ago by a major commercial company, Lockheed Martin, to sponsor its application to explore for minerals on the deep sea bed. When we received that approach, we took great pains to ensure that the environmental standards were the best that could be devised. The Department for Environment, Food and Rural Affairs was closely involved, as were two eminent scientists from outside the Government. When the application reached the council of the International Seabed Authority, the environmental aspects were generally praised by delegations. At the meeting of the council last year, when the first discussion of the possible shape of future regulations took place, the Government made it clear that they would expect those regulations to incorporate environmental provisions of the highest standards.

The British Government have already spoken and acted in a manner that will ensure that the highest environmental standards are adhered to, and I know that the need to protect the natural environment has

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universal support across the House. However, the Government cannot support the amendment, and I shall try to explain why.

Section 5 of the 1981 Act, to which the hon. Member for Bristol East and my hon. Friend the Member for South East Cornwall (Sheryll Murray) referred, already includes clear provisions on the need to protect the marine environment. I know that on Second Reading the hon. Member for Brent North suggested that section 5 might not be sufficiently up to date, but we do not believe that to be the case. Section 5 is worded in a general manner and can accommodate changes to environmental perspectives.

Kerry McCarthy: The point that my hon. Friend the Member for Brent North and I have been making is that post 1981 it has been clearly established that the precautionary principle, agreed at Rio, should apply, and it is missing here. It is the reversal of the burden of proof that will be missing if we stick to the 1981 Act. It is important to reflect in the Bill the extent to which the precautionary principle has been accepted.

11.15 am

Mr Swire: The hon. Lady is right, but we also want companies to come here, and therefore we want to ensure that our environmental protections are the best and are in place. We are convinced they are and that section 5 of the 1981 Act is worded in a general manner that can accommodate changes to environmental perspectives. We do not believe that the amendment would add anything to the legislation.

On Second Reading, the hon. Member for Brent North referred to the precautionary approach in principle 15 of the Rio declaration. But the International Tribunal for the Law of the Sea made it clear in its 2011 advisory opinion that sponsoring states should comply with the terms of principle 15, as well as best environmental practices. In exercising his functions to issue licences under the Act, the Secretary of State would have to comply with those provisions.

In addition, by replacing the whole of the current section 5, the amendment would lose two key elements. The requirement at the end of subsection (1) for the Secretary of State to consider any representations would be lost, as would the power in subsection (2) for the Secretary of State to include in licences provisions about protection of the marine environment. On those two technical grounds alone, the amendment cannot be supported.

More substantively, the amendment would require a full environmental impact assessment, even before exploration is carried out. However, as the hon. Member for Bristol East conceded, exploration of the deep sea bed involves minimal disturbance of the marine environment and no commercial company would be expected to undertake a full environmental assessment in those circumstances. The Bill should not be about preventing responsible companies from undertaking responsible exploration. On the contrary, the Government believe that we should actively encourage exploration of the deep sea bed. That is because the scientific information obtained through exploration will be an essential element

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in considering the environmental aspects of mining when it does take place. As the hon. Lady acknowledged in Committee, mining on the deep sea bed will eventually take place.

The amendment refers to a number of other international instruments. The Government are entirely conscious of the current developments in international environmental law, and have for example been at the forefront of international action on climate change—as is well recognised. It is clear therefore that international developments will be, and will have to be, taken into account when decisions on whether to issue licences are eventually made. But we should not limit ourselves in this way. There may be national developments, or developments in the European Union, that should also be taken into account. The current text of section 5 of the 1981 Act already allows for this and indeed, in this respect, is wider in its ambit than the amendment. For that reason, the Government do not support the amendment.

Kerry McCarthy: I remind the Minister that the amendment says

“including but not limited to”.

We were conscious when drafting the amendment that we did not want to limit it to just those treaties cited, so that other laws and treaties agreed over time would be included.

Mr Swire: I am grateful to the hon. Lady for clarifying that point.

Of course the Government will continue to expect that the International Seabed Authority, in its decision-making process, should work towards meeting agreed international standards with respect to protection of the environment, and should utilise the latest information about the importance of marine areas. The Government recognise that the work being carried out under the convention on biological diversity to identify ecologically and biologically significant areas, along with the identification of vulnerable marine ecosystems, provide authoritative information that needs to be taken into account within the processes of the International Seabed Authority. Furthermore, let me assure hon. Members that the secretariat of the ISA is highly expert and, in particular, well aware of international developments in the environmental field. I think, therefore, that the House can have confidence that these developments will not be overlooked.

In conclusion, the Government sympathise with the reasons that have led the hon. Members for Bristol East and for Brent North to table the amendment. We have had an interesting debate, but as I have said, the Government cannot support it and are satisfied that section 5 of the 1981 Act is sufficient. In the light of this, I hope that the hon. Lady will feel able to withdraw her amendment.

Kerry McCarthy: I thank the Minister for his response, although he has not entirely set my mind at rest. I would have liked the Bill to build on the environmental protections set out in the 1981 Act, given that we have moved on considerably since then, and I would have liked the precautionary principle firmly established in the Bill, because that is where we are at now with environmental protection internationally, but I do not intend to press

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the amendment. With respect to the Minister, however, he is the third Minister to deal with the Bill—there was one Minister on Second Reading, one in Committee and now another on Report and Third Reading—and there will be yet another Minister in the Lords. Furthermore, I am the second Labour spokesperson to deal with it. I hope in the Lords, therefore, there will be an opportunity for detailed scrutiny to ensure that we tie things together and take the Bill forward properly.

Mr Swire: The hon. Lady ought to be a little more positive. The result will be a widespread understanding of the Bill virtually across the whole of Government.

Kerry McCarthy: Certainly, we have moved on from the stage when probably not a single Member knew what was meant when we referred to hydrothermal vents, polymetallic nodules, a cobalt-rich crust or any of the other things we have been discussing, so we have been significantly enlightened. Nevertheless, I hope that the Lords will further scrutinise the environmental provisions and perhaps pull some of this together and table some amendments. As I have said, however, I do not intend to press the amendment to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Third Reading

11.23 am

Sheryll Murray: I beg to move, That the Bill be now read the Third time.

This is a good Bill and an important one for the UK economy. It is also timely. As my hon. Friend the Minister mentioned, in 2012 the UK sponsored its first licence application to the ISA for a UK company to explore the deep sea for polymetallic nodules in the Pacific ocean. No one has learned more than I have about not only polymetallic nodules and cobalt-rich crusts but polymetallic vents and how some of them are dead, while others are smoking and look like they have their own ecosystems—those are the ones we all want to protect.

The UK Government sponsored the last licence issued under the 1981 Act, but that Act is restricted to exploration for polymetallic nodules; it does not allow exploration for other things, which is why it is essential that it be updated. As the hon. Member for Bristol East (Kerry McCarthy) mentioned, the Act predates the UN convention on the law of the sea and the subsequent implementing agreement on part 11 of the convention on deep-sea mining. In some small, niche areas, it is not entirely consistent with the convention, such as on the enforcement of decisions on sea bed disputes in the chamber of the International Tribunal for the Law of the Sea, established under the convention.

It is important for the UK that we put our legislation in good order, not least because we are strong proponents of the convention. It is also important economically. As many UK companies have expertise in the area, it could provide many benefits to the UK economy. I was delighted, therefore, that in Committee we extended the Bill to cover Scotland, which also has a lot of expertise gained through our exploration and exploitation of North sea oil. It will also benefit my own part of the country in the south-west and south of England. Plymouth university

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and Southampton university have departments looking into and gaining a lot of expertise in this area, which is unknown to many of us.

Sea bed mining has enormous potential. Scientists know that lying on the sea bed, at great depths, are valuable new sources of nickel, copper, cobalt, manganese and rare earth elements. These metals are being mined to extinction on land, so we need to find new sources. Metals such as nickel, used in superalloys, cobalt and manganese, used in energy storage technology, which will obviously benefit everybody, and rare earth elements, which are strategically important, are used in low- carbon technology, lasers, sub-conductors and many telecommunication applications. There are large quantities of these metals, and it is right that the UK benefit from its share of this groundbreaking new technology, which I hope will benefit UK companies considerably.

On 11 March last year, the Prime Minister attended an event at the ExCeL centre celebrating the granting of an exploration contract by the ISA to the UK. He spoke of the benefits to the UK and of the supply chain jobs likely to be created across the UK. As I mentioned, he said that jobs could be created not just in Plymouth and Southampton but in Portsmouth, Bristol, Liverpool, Newcastle and Aberdeen, in sectors such as engineering and the manufacture of high-tech remotely operated underwater vehicles and ship stabilisation systems. He also said that that was estimated to be worth up to £40 billion to our economy over the next 30 years. At this point, I should correct some information that I gave in Committee: I said that it would be worth £30 billion by 2030.

The Prime Minister welcomed the identification of more than 80 United Kingdom companies with relevant expertise with which the UK contractor might be able to work. He also welcomed the industry workshop event that had been arranged to follow the ceremony of the granting of the contract.

I thank the Government and individual Ministers for supporting my Bill, and I thank experts in the Department who have taught me an awful lot about deep-sea mining—about a world that lies at an even greater depth than that in which my late husband used to tow his fishing nets. I also thank the staff of the Public Bill Office for assisting me again. This is the second time I have spoken on Third Reading of a private Member’s Bill: I did so last year as well.

I can assure Members that deep-sea mining is not fracking, and does not involve any of the techniques that are associated with land-based mining. Specifically, deep-sea mining for polymetallic nodules involves no excavation of rock. It involves no use of explosives, and the nodules lie on the sea bed very much like the fish that my husband used to harvest in his nets. The techniques that are used to mine the nodules are likely to involve scooping or vacuuming them up. I do not pretend that the process will be environmentally neutral, but it is potentially less environmentally damaging than land-based mining for the same minerals.

Kerry McCarthy: I appreciate what the hon. Lady is saying about the mining of polymetallic nodules—she may well be about to deal with this point, which I believe she covered on Second Reading—but are not the additional forms of exploration and exploitation allowed by the Bill potentially more environmentally

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damaging, given that they would involve a great deal more than just scooping nodules off the sea bed?

Sheryll Murray: The hon. Lady is obviously psychic. I was indeed about to deal with that point.

Mining for polymetallic sulphides and cobalt-rich crusts is a different matter, because it would involve the excavation of rocks. Mining for those minerals is even further off than mining for polymetallic nodules, and in that context the principles that might apply to nodules would have to be considered again. I am determined, and I know that the Government are determined, to ensure that the highest environmental standards will be applied to any exploitation of the minerals to which the hon. Lady has referred, and she has implied that she shares that determination. I can inform her that international regulations governing the exploration of those minerals have been agreed and were in place in advance of the issuing of any exploration contracts, and that various regulations have continued to be reviewed and updated in the light of new developments and considerations.

I think that I speak for both this Government and previous Governments in saying that the United Kingdom prides itself on taking a close interest in these matters. We have observed that interest since the passing of the 1981 Act. The Bill updates and modernises our existing legislation following the ratification of various treaties. The United Kingdom was one of the first states to sponsor a commercial company to undertake exploration, and I trust that we shall be able to demonstrate the highest regard for international law by passing my Bill.

This is a good Bill, and it is important for the United Kingdom’s economy. It is all the better now following the passing of amendments to extend its provisions to Scotland. We engaged in some interesting and thought-provoking discussions on Second Reading and in Committee, which were all the better for the points raised by the hon. Member for Bristol East. There is clearly a common understanding of the fact that the exploitation of minerals in the deep sea is beyond any state’s jurisdiction, and will inevitably take place in the future. It is, therefore, important for the United Kingdom to be at the heart of it, and to assist the development of international regulations on deep-sea mining. I am glad that the Bill appears to have general cross-party support, and I hope that that support will continue in the other place.

I am sure that my hon. Friend the Minister will be able to deal with some of the technical aspects of the Bill when he sums up the debate.

11.38 am

Kerry McCarthy: I do not intend to speak for long. Let me begin by congratulating the hon. Member for South East Cornwall (Sheryll Murray). It is always challenging to take a private Member’s Bill through all its parliamentary stages, not least when the Bill contains as much technical detail and covers as many new areas as this one. However, I understood from the hon. Lady that this was her second experience of the process. She

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is a great deal luckier than I have been, because in my nine years as a Member of Parliament, I have never been successful in the ballot for private Members' Bills.

We on the Labour Front Bench do not oppose the Bill, because we accept that deep sea mining is inevitable. We could not prevent or even delay it even if we wanted to. We agree with the Government and the hon. Lady that it is important for the United Kingdom to be at the forefront of the benefits to be had from the industry. However, we want to be at the forefront not just because of the business opportunities afforded to the UK, but in order to be able to determine standards for ourselves rather than leaving it to others who may not consider environmental protection as important as we do.

I understand that the Government conceded privately that the Bill was not needed quite yet, and perhaps was not quite ready. A number of amendments in Committee extended its provisions to Scotland because discussions had not yet taken place. We accept that this Bill is a work in progress, but we think that it is, perhaps, a little bit rushed. It could perhaps have been dealt with as a Government Bill. We know the Government have supported it from the outset and, given that we have very little legislation going through Parliament at the moment, we had an ideal opportunity to discuss this as a Front-Bench Bill on the Floor of the House with several days of debate.

Sheryll Murray: May I clarify a point the hon. Lady has made? This Bill was going to be presented with or without Scotland measures. The amendments to include Scotland were introduced because that would be of great benefit. It is my Bill and I am leading it through, and it would have been presented without Scotland measures if necessary.

Kerry McCarthy: My point was not specifically about the Scottish amendment. I was just using that as one example to make my point. The discussions with Scotland took place, or were finalised, after the Bill had been introduced. My understanding was that the Government had conceded that, and, because the ISA regulations are being debated next year and because of other developments, the Bill might be slightly premature and a little bit rushed. It might have been given more consideration. We are where we are now, however, in terms of the parliamentary process. I hope the other place has the opportunity to scrutinise the Bill in detail and perhaps make further amendments that would improve it.

I want to make one further point, which arose from the Committee discussions. It remained unclear how the finances of this will work and whether the UK would in fact get a share of the profits. We have been told that this is very much about wanting the UK to benefit from being in the vanguard of the exploration. As has been mentioned, the Prime Minister has claimed that sea bed mining could be worth a staggering £40 billion to the UK economy over the next 30 years, although I have not seen any detailed analysis to support that estimate.

I appreciate that it is slightly jumping ahead of even where the ISA is currently at, because it has not drafted its regulations yet, but the issue of operator profits is critical to this debate. I understand that the UK would benefit from corporation tax from those UK companies

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or foreign companies, such as Lockheed Martin, with UK subsidiaries which get sponsored by the UK, although once their profits have been understandably offset by their exploratory costs and the costs of environmental assessments, this amount could be quite limited. Certainly in the case of UK subsidiaries, profits may go to the parent company, but unlike the tax regime on North sea oil revenues, the British Exchequer will not be plugged into the profits, as the riches of the sea bed do not belong to the UK; they belong to what is described as the “common heritage of mankind” and those resources do not belong to any one state, and no one state would have the right to claim ownership.

Returning to my point about this Bill being slightly premature, I understand that there are discussions about a possible sovereign wealth fund, created from a fee that could be charged on output. That could be used for the benefit of developing countries, but again discussions on this are at an early stage and we do not yet know much about it. Again, I would have liked to have had more clarity on this. More than 30 years have passed since we last considered legislation on this topic with the 1981 Act. Given that it has taken us so long to get to the point where we are revisiting the matter, I would have liked to have had more clarity on that issue and on the environmental issues. We are where we are, however, and I hope when the Bill gets to the Lords there can be more clarity. We will support the Bill at this stage, however, because we think that if deep sea mining is to go ahead, there ought to be some sort of licensing system in place.

11.44 am

Mr David Nuttall (Bury North) (Con): It is a pleasure to follow the hon. Member for Bristol East (Kerry McCarthy), who speaks from the Opposition Front Bench. She raised an interesting point about what would happen to the proceeds of mineral exploitation, and it deserves further consideration because the situation is not as straightforward as it was with North sea oil. We should examine exactly how this country will be able to benefit. Are we going to benefit directly, or jointly with other countries across the globe?

I rise to support the Bill. I supported it on Second Reading, and I thank my hon. Friend the Member for South East Cornwall (Sheryll Murray) for piloting it through to Third Reading. To do that once is quite an achievement, but to do it twice is particularly remarkable, and she should be congratulated on that, and on succeeding in the ballot twice.

Sheryll Murray: My hon. Friend may be interested to know that the reason I believe I was selected twice was because I used the same number twice: 336. Our first fishing boat which we had brand-new was FY 336. I do not want anybody to steal that number in future ballots.

Mr Nuttall: When I enter the ballot next year, if I get into the Lobby before my hon. Friend, I will specifically not choose 336, and I will urge all Members on both sides of the House to try to avoid that number because it has obviously brought my hon. Friend great success. I know it is particularly poignant for her.

The deep sea bed is one of the last unexplored areas of our world. In previous centuries mankind has gone off exploring the world in pretty much an unregulated

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and uncontrolled manner, but that is not the way the modern world operates. It is right that in the 21st century before mankind goes digging around on the deep sea bed causing who knows what sort of damage, a framework needs to be put in place to ensure that the exploration is carried out in a carefully controlled manner and causes as little damage as possible to the delicate ecosystems of the deep sea bed. The plethora of international agreements and our own domestic legislation seek to do that.

There is a danger, however, that in putting together our own domestic legislation, we put in place licence conditions that companies see as too onerous, too complicated and too prescriptive, and consequently those companies will not come to the UK to obtain their licence approval; they will go to countries whose legislation is, perhaps, less prescriptive than ours.

Sheryll Murray: My hon. Friend makes a good point. Does he also agree that there is the potential of companies moving their whole operations from the UK to other countries?

Mr Nuttall: There is that risk if exploration companies decide and form the opinion that our legislative framework is too onerous, prescriptive and complicated. I hope that that is not the case. Certainly, it would not have my support or the support of the Government or anyone in the House if we felt that it was the case. There is a delicate balance to be struck between trying to protect the environment, maximising revenues and encouraging exploration for the benefit of mankind. They are all worthy things to do, and the Bill in its own way seeks to strike that careful balance. It is not an easy task to pull off, because if we go too far in one direction, we will upset something else. There is a balance to be struck between mankind exploiting for the benefit of us all the resources that are in the deep sea in the other parts of the world and protecting the environment that is down there. I sincerely hope that this Bill will receive its Third Reading and that when it reaches the other place, it will have a speedy passage. I wish it well.

11.50 am

Mr Swire: I wish to put on record my thanks to my hon. Friend the Member for South East Cornwall (Sheryll Murray)—and not, as she was erroneously called, the hon. Member for North East Cornwall. I think North Cornwall currently belongs to our coalition partners, but I am sure that at the next general election she, like all of us in the south-west, will be doing everything to ensure that if she does not actually personally occupy that part of Cornwall, there will be a member of the same party who does. It is worth putting on the record that it is the only seat in Cornwall—[Interruption.] There is of course St Ives, which is extremely vulnerable to the Conservative surge.

Sheryll Murray: My right hon. Friend will wish to know that, currently, our coalition partners hold St Ives, St Austell and Newquay, and North Cornwall. The Conservatives currently hold—

Madam Deputy Speaker (Dawn Primarolo): Order. The hon. Lady will resume her seat. Before the Minister continues, let me say that that has nothing to do with the Third Reading of this Bill. I know that it is Friday

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and that the right hon. Gentleman and the hon. Lady are looking forward to getting back to Cornwall, so if we could concentrate just on the Bill I would be a very happy Deputy Speaker.

Mr Swire: Madam Deputy Speaker, I apologise. I share your agitation and excitement. Mine was only the excitement about May 2015 and what might happen thereafter. I will certainly not be tempted further down that exciting route.

I also thank other right hon. and hon. Members who have served their time on this Bill. The hon. Member for Bristol East (Kerry McCarthy) referred to the fact that it has been handled by a number of different Ministers throughout its passage. That is a factor of life here sometimes, but, as I said to her, it does mean that there will be a wide understanding of the legislation. As it is new and quite complicated, the more people who understand what it is about—the new technology and the new exploration way below the sea—the better.

It is of course entirely appropriate, as hon. Members have said, that it should be a Back Bencher from a constituency in Cornwall, which is the second most beautiful part of England after Devon, who has brought the Bill to the House. Cornwall not only has been involved in mining for generations—indeed, from before Roman times—but is of course a great maritime county. My hon. Friend has always been a strong advocate of her native county. Certainly, the fishing industry and her constituents are represented extremely well by her. I do not know anyone here who has a greater understanding of the marine environment, from which she has derived both pleasure and tragedy.

I am pleased that my hon. Friend has taken the Bill forward with such aplomb. She has the distinction, as we have heard, of having been in charge of private Member’s Bills in two consecutive Sessions, which is certainly an unusual achievement. As to her revealing the secret of how she was balloted for two Bills, she gave the figure “336”, but said that she did not want people to know that it was her secret number. I remind her gently that recordings of this place are, as we speak, being broadcast to the four corners of the world. Who knows, one day they might be broadcast to the sea bed as well, so Captain Nemo can watch them. Quite a lot of people will remember 336 now and, with her indulgence, I shall be tempted to use some of those numbers when I next fill in my national lottery form as they have brought her such luck in the past.

Why is deep sea mining such a prominent issue just now? One or two comments have been made to the effect that the Bill is in some way premature and that the industry is in its infancy, and some have asked why we are doing this now. It is worth recalling that in the 1980s there was a great deal of interest in deep sea mining, although I must confess that I was not aware of that myself. There were expectations then of a major boom in deep sea mining and pessimism in many quarters that an internationally agreed regime could not be achieved. It was against that background that the Deep Sea Mining (Temporary Provisions) Act 1981 was passed.

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The addition of the words “Temporary Provisions” to that Act now seems ironic, as here we are 33 years later and the Act is still in force. That, presumably, gives a new definition to the word “temporary”. Let us hope that the same use of the word does not apply when we talk about other parties “temporarily” holding on to seats that should be ours in the south-west—we do not envisage that going on for 33 years, Madam Deputy Speaker. In recognition of the fact that deep sea mining is here to stay, we will remove those words from the short title. I imagine that that is probably the most uncontentious thing I could say.

Going back to the 1980s—and many of us would like to—

Madam Deputy Speaker (Dawn Primarolo): Order. With respect, we do not need to go back to the 1980s. We are on the Third Reading of a Bill that apparently has support in the House and the debate is about the provisions of the Bill. We have moved beyond needing context from the 1980s. There are a lot of Bills still to come this morning, so I would be grateful if the Minister referred to this Bill and its provisions.

Mr Swire: I am making as much haste as I possibly can, Madam Deputy Speaker, given the complexities of some parts of the Bill. I was alluding back to the ’80s because of the commercial side of the issue. The commercial companies that showed an interest in deep sea mining at that time ceased to do so and although the idea lived on, it did not seem likely to become a reality any time soon.

Mr Nuttall: Does the Minister know why, over the intervening three decades, cross-party agreement has arisen on these matters? If we look back to the debates on the 1981 Act, we can see that it was pretty contentious, with Divisions on Second and Third Readings.

Mr Swire: I think that is for two reasons. First, such ideas are becoming a reality, whereas in the 1980s they were a distant prospect, and, secondly, our understanding of the management of the environment, not least the marine environment, has improved in leaps and bounds. Marine conservation zones and ecological balancing mean that we are way ahead of where we were then. No doubt you would rightly stop me going down memory lane to the 1980s, Madam Deputy Speaker, so I shall not continue along that line, but I hope that I have answered my hon. Friend’s questions as best I can.

The other part of the prediction also turned out to be incorrect. We were able to achieve an internationally agreed regime for deep sea mining. However, the road to achieving that was not straightforward. When the United Nations convention on the law of the sea was first adopted, the United Kingdom, in common with other industrialised countries, could not accept the provisions on deep sea mining. Those were included in part XI of the convention and were not attractive to commercial companies. The industrialised countries stood aloof from the convention, even though—apart from part XI—the provisions were satisfactory. Indeed, they were of great advantage to industrialised countries.

As the date for the convention’s coming into force grew closer, the developing countries appreciated that a convention with no participation from industrialised

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countries would not be to their advantage. Negotiations began to revise part XI or, in the diplomatic speak of the time, to set out how it would be implemented. I am pleased to note that United Kingdom representatives played a prominent role in those negotiations. The result was the so-called part XI agreement, which met the concerns of the industrialised countries and paved the way for the United Kingdom and other industrialised countries to ratify the convention.

Let me say now that the British Government consider that the convention, read with the part XI agreement, represents an excellent platform for the future development of deep sea mining. There is a need to ensure that the commercial terms encourage commercial companies, which are rightly hard-headed about the process, to invest the large sums necessary to make deep sea mining a reality. My hon. Friend the Member for Bury North (Mr Nuttall) elegantly made the point, in a well-balanced argument, that there is a balance to be struck. We want to encourage deep sea mining and ensure that companies come here to register for the licences, but we do not want to give them false expectations; they can spend huge amounts of money before they mine anything. That is one reason why we were unable to accept the amendment.

Ultimately, the deep sea is, as the convention says and as the hon. Member for Bristol East said, the common heritage of mankind; that is the phrase that has been universally used. It is a ringing phrase, which means a great deal to many people around the world, particularly those who are nervous about the concept of touching the sea bed. Ultimately, the benefits of deep sea mining should be shared with all members of the international community. That is recognised by the convention, and we are happy to endorse it.

The hon. Lady and my hon. Friend talked about profits and which country should benefit from any money made, which is perhaps slightly putting the cart before the horse. Apart from the licence fees, the issue of what direct benefits will accrue to sponsoring states is one of the many that will need to be considered during the development of the exploitation regulations. However, the indirect benefits are likely to be substantial. Deep sea mining is a significant opportunity for UK industry, especially in the light of the technological advances made during the development of the oil and gas industry in the North sea. We look forward to UK industry making full use of that opportunity.

As for the International Seabed Authority, its council will have to produce in due course rules about the

“equitable sharing of financial and other economic benefits deriving from activities in the Area”,

taking into particular consideration the interests and needs of the developing states. In other words, the ultimate intention, although we are probably a long way away from this, is that the economic benefits of deep sea mining should, rightly, be shared with developing countries. Talk of the precise nature of how the money will be held and disbursed, and of where sovereign wealth funds should be located and who should be involved with them, is somewhat premature.

Nevertheless, a balance is needed between the requirements of the commercial companies and those of the beneficiaries in the international community as a whole. It would be counter-productive to fix payments

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to the international community at a level that would deter the commercial companies. In other words, we must ensure that the international community secures a reasonable rate of return without putting off the commercial companies without which there would be no mining at all—ergo no revenue, no sovereign wealth fund and no ability to share any profits with developing countries because, by definition, there would be no profits to share.

I am perhaps getting a little ahead of myself because, at present, there is no mining on the deep sea bed—that is a statement of fact. There have been only applications to explore for minerals. So far the International Seabed Authority has approved 19 such applications. Four more were held over from its 2013 session, and at least three new applications will be considered during the coming year.

The pace of applications has increased markedly in the last few years, as we might expect. There may well be many reasons why, but there is no doubt that there are two in particular: first, the development of technology, much of it by British companies that have been working in the North sea for many years, as their unrivalled expertise in deep sea drilling has a knock-on effect for their understanding of deep sea mining; and, secondly, the exponential economic growth in certain countries, which I need not name, that has fuelled a significant increase in their demand for metals and precious minerals. It follows that deep sea mining for mineral deposits on the sea bed is close to becoming technically and economically viable. It is also a truism that, with an increasing world population and finite resources, we will need to look to the oceans to provide additional sources of support for our growing needs and demands. We need to be acutely aware of changes in our ability to produce energy and extract minerals. I refer the House to the need for a serious look, from an environmental perspective, at the exploitation of shale gas, which has had hugely beneficial effects, especially regarding the cost of energy, in countries such as the United States that are well ahead of us on that practice.

Perhaps I should explain to the House how the system set out in the United Nations convention on the law of the sea works. Any application to explore for mineral resources on the deep sea bed requires sponsorship by a state party, which must be able to exercise sufficient jurisdiction over the company it is sponsoring. It is worth saying that an advisory opinion in 2011 by the International Tribunal for the Law of the Sea helpfully elucidated the duties cast on a sponsoring state by the convention, which include a requirement to adopt a precautionary approach to environmental issues.

Once a company has secured the sponsorship of a state, its application goes to the International Seabed Authority. I am pleased to note that the authority’s headquarters are in Kingston in Jamaica, a fellow Commonwealth country. I am the Minister for the Commonwealth, so I have a further excuse to go and inspect the headquarters personally—if the cold weather continues, I shall be going sooner rather than later.

The application will then be considered by the legal and technical commission of the International Seabed Authority, which is composed of experts from across the world and gives technical advice to the ISA’s council. Once approved by the commission, the application is forwarded to the council, which is composed of a

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number of member states that have a particular interest in deep sea mining. It is then for the council to approve the application.

The final step is that the contractor and the International Seabed Authority enter into a contract that has a number of standard provisions, including on the reports that the contractor must make to the authority. Effective regulation of the contractor will be secured through a combination of those provisions and the domestic law of the state sponsoring the application. The authority is at present concerned only with the exploration of the deep sea bed.

Mr Nuttall: The Minister may be aware that the original convention on the law of the sea established a body called the Enterprise, the purpose of which was to serve as the authority’s mining operator. As far as I am aware, no steps are being taken to bring the Enterprise into operation. Is he aware of any moves in that direction? Will the ISA take control of this itself?

Mr Swire: I am not aware of any such rules, but I commit to writing to my hon. Friend once I have clarified that point. I am pleased that the ISA’s secretariat is thinking about the regulations that will be necessary once exploitation begins. The United Kingdom delegation at the authority’s most recent session made clear the importance that we attach to the development of those regulations, which will be an important step for the authority and one in which the United Kingdom is determined to play its full part. There are important environmental issues to be resolved, but there is also a financial issue relating to the amount of any payment to the ISA, to which I have already alluded.

What of British involvement in deep sea mining, which is really what the Bill is about? I am pleased to say that the United Kingdom has now sponsored two applications. The first was approved by the ISA’s council in 2012, and consequently a British company will cover an area of sea bed twice the size of Wales and 4,000 metres deep. Disappointingly, the legal and technical commission did not have time to consider the second application at its sessions last year, but we hope it will approve the application at its session beginning in February, and that the council will approve the application when it meets in July.

Deep sea mining is a very exciting and pioneering industry, and the Government are pleased that the United Kingdom is at the forefront of its development. Last year, my right hon. Friend the Prime Minister spoke at an event in London to celebrate the signing of the contract between the United Kingdom’s sponsored contractor, UK Seabed Resources Ltd, and the ISA. Our colleagues in the Department for Business, Innovation and Skills organised an industry day at which more than 80 British companies participated. British companies have developed expertise and technology through their activities in the North sea, much of which is transferable to deep sea mining. We hope that significant benefits to the British economy will be forthcoming over the next 30 years. We have heard figures of anything up to £40 billion bandied around this morning. In the Government’s view, it is essential that the United Kingdom does not ignore these potential benefits. As I have said—it is also the assessment of the International

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Seabed Authority—we are at the threshold of a new era of deep sea mining. This new frontier presents a valuable opportunity to contribute to the prosperity of the British people, of British companies, and of the United Kingdom as a whole.

Polymetallic nodules, as I am sure we are all now fully aware, contain a higher concentration of valuable metals—up to 28% more, or 10 times the proportion usually found on land. Many of the metals contained in these sea bed deposits are considered to be valuable “technology metals”, which are increasingly important in high-technology industries that benefit us all, including electronics, clean technologies such as hybrid cars and wind turbines, and the construction and aerospace industries. The strategic importance of this source of minerals and metals should not be underestimated, not least as they contain trace metals such as rare earth elements used in electronics, where it is important that land-based sources should face competition from potential sources on the deep sea bed. Such an amount of previously untapped wealth can create vital jobs for the British economy, not only in deep sea mining but in the supply chain supporting the industry, such as the engineers developing machines to harvest polymetallic nodules in an environmentally sensitive way.

As my right hon. Friend the Minister for Universities and Science has pointed out, this new industry plays to the UK’s strengths as a world leader in maritime engineering and innovation—which, incidentally, is of increasing importance to us in the south-west, as my hon. Friend the Member for South East Cornwall will be well aware. As I mentioned, last year my right hon. Friend the Prime Minister attended and spoke at an event to welcome the award of an exploration licence to British company UK Seabed Resources, secured with the support of the Foreign and Commonwealth Office and the Department for Business, Innovation and Skills. There can be no greater demonstration of the Government’s commitment to this rapidly developing industry.

Turning to the Bill, I would first like to emphasise—

Madam Deputy Speaker (Dawn Primarolo): Order. The right hon. Gentleman has been speaking for some considerable time now. We have covered everything. We have covered the international authority, prime ministerial speeches and agendas for Government Departments. I would now like him to focus specifically, and briefly, on his comments with regard to the Bill.

Mr Swire: Of course, Madam Deputy Speaker. If I may, I will just say why the Bill was needed, because there was some discussion as to whether it was appropriate to have it now or whether it was premature.

Madam Deputy Speaker: Order. With respect, the right hon. Gentleman covered that right at the beginning of his speech when he outlined the originating of the 1981 Act, the fact that it was temporary, the fact that it did not need to be temporary now, and the increased interest in deep sea mining. I think we have covered why it is important; we have covered the money and the jobs. The Minister just needs to finish off on the Bill.

Mr Swire: Indeed, Madam Deputy Speaker. In that case, I will abbreviate my concluding remarks to address a specific point that was raised about Scotland, on which I owe the House an answer.

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I am pleased that we were able to reach agreement with the Scottish Government to extend the Bill to Scotland. Amendments to that effect were moved in Committee by my hon. Friend the Member for South East Cornwall, supported by the Committee. This was a very technical change that took some time to sort out, but we got there. As with other British companies, Scottish companies are well placed to take advantage of the opportunities presented by the development of deep sea mining. Many of them have been active in the North sea and can therefore adapt their expertise and the technologies they have developed into the new and exciting world of deep sea mining.

We have enjoyed—at least, I have enjoyed—an informed and productive debate that has demonstrated a real understanding of the economic and strategic importance of this Bill for the United Kingdom, balanced with the need to ensure safeguards for the environment. One of the important issues we have rightly discussed is the environment of the deep sea and the potential impact of mining on the species living on the sea bed. All of us—Governments, parliamentarians and private companies alike—must be conscious of our shared responsibility for the stewardship of the deep sea bed.

I hope I have answered the majority of points raised. My right hon. Friend the Prime Minister has shown how this issue is an example of the UK leading the way—both in legislation for the awarding of licences and in the support we will give—in an exciting new industry. The industry is expected to be worth up to £40 billion to the British economy over the next 30 years. The United Kingdom is open for business, competing in the global race.

This Bill has been improved by amendments and has been met with general approval from Members throughout the House. I am confident that when future generations look back at what we have done, they will see that we have done everything we can to strike the right balance between protecting the environment and exploiting this valuable resource in support of our country’s prosperity.

I thank all those who have taken an interest in and contributed to the excellent discussions as the Bill has progressed. In particular, I reiterate my warmest congratulations to my hon. Friend the Member for South East Cornwall on introducing the Bill. I hope the House will join me in supporting the Bill’s Third Reading and wishing it a speedy and successful passage through the other place.

12.21 pm

Sheryll Murray: With the leave of the House, I just want to put on the record once again my thanks to the Minister and the Department’s helpful officials. I am also very grateful for the help I received from the Public Bill Office and thank the hon. Member for Bristol East (Kerry McCarthy) for her contribution.

Question put and agreed to.

Bill accordingly read the Third time and passed.

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Armed Forces (Prevention of Discrimination) Bill

Second Reading

Mr William Cash (Stone) (Con): On a point of order, Madam Deputy Speaker. I want some guidance regarding the question of where the money will come from following the loss of the short-selling case at the European Court of Justice. Will it come from estimates or otherwise? The Government are now obliged to pay all the costs and, despite predictions, the amount of money in question will be substantial. The Government’s case has been completely dismissed and they have had costs awarded against them. I just wonder where the money will come from.

Madam Deputy Speaker (Dawn Primarolo): The hon. Gentleman poses his question as a point of order to the Chair and I suppose the direct answer is that I do not know. Thank goodness it is not a matter for the Chair. As the hon. Gentleman knows, it is not a point of order, but he is very thorough and assiduous in pursuing such matters. I say without fear of contradiction that he will have other opportunities—nay, that he will create other opportunities—to pursue his point, but that will not happen during today’s sitting.

I call Thomas Docherty to move the Second Reading of his private Member’s Bill.

12.24 pm

Thomas Docherty (Dunfermline and West Fife) (Lab): I beg to move, That the Bill be now read a Second time.

I am delighted to have the opportunity to speak—I hope relatively briefly—about an important issue. As I am sure hon. Members are aware, this is my second attempt to change the law on the protection our society offers to members of the armed services, including the reserves and veterans, as well as their families.

I welcome the Under-Secretary of State for Defence, the hon. Member for Broxtowe (Anna Soubry), to her place. To begin on a consensual note, she has a very hard act to follow in her role, because her predecessor, the Minister for the Armed Forces, cares deeply about armed forces and their welfare. I think that the whole House congratulates him on his new role. I hope that the hon. Lady and I will continue the debate in the same manner that he and I finished it at approximately this time last year.

Philip Davies (Shipley) (Con): We are all delighted to see the Minister in her place. I wonder whether the hon. Gentleman is slightly surprised, as I am, to see her there, because from my reading of it, the Bill appears to be more a criminal justice one than an armed forces one. What are his thoughts on which Minister should respond to this debate?

Thomas Docherty: I think that the hon. Gentleman is on occasion slightly closer to the Government than I am, so he is better placed to speculate about which Minister should reply. Perhaps the hon. Lady will pick up that point when she speaks.

I hope that the House will unite on the issue. I very much welcome the constructive way in which hon. Members on both sides of the House have approached the subject not just today, but during the past 18 months. Of course there are times when we have different

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perspectives on the future of our armed forces and on how they should best be deployed and equipped. However, I hope that the whole House will agree on one point—that we owe a special duty to the brave men and women who risk their lives defending our freedoms and our rights. I very much welcome the shadow Secretary of State, my hon. Friend the Member for Gedling (Vernon Coaker), to his place, which is a welcome sign of my party’s commitment on this important issue. I think that the whole House recognises that we owe a very special debt to those who risk their lives abroad to defend our freedoms in ensuring that they receive, as they deserve, the full shield of Government protection when they return home.

I will not repeat what I said last year, but I want to talk briefly about the first two clauses. Clause 1, which would amend the Criminal Justice Act 2003—the hon. Member for Shipley (Philip Davies) has already mentioned criminal justice—simply says that an assault on a member of the armed forces or their family that is motivated by their service to our country should be treated as an aggravated offence.

The House will recall that the noble Lord Ashcroft, who I suspect is in the other place—I understand that a minor issue is being considered at that end of the Building—carried out a survey, with the support of the Ministry of Defence, of some 9,000 serving personnel across the three armed forces in 2012. Some quite astonishing and, dare I say, horrific figures came out of that survey. About 5% of members of our armed forces reported that they or their family had suffered physical or attempted physical assault during the previous five years, while 18% or 19% of them reported that they had been the victim of verbal abuse in that period. I am sure we can all think of the type of abuse that, regrettably, is hurled by a mindless minority at members of our armed forces, and I will cite one example that my hon. Friend the Member for Gedling might also refer to.

A few years ago the Royal Anglian regiment came back, I think in 2010, for its homecoming parade, and an extremist organisation called Muslims Against Crusades organised an attack on that parade, which I think crossed the line between free speech and intimidation. The survey by Lord Ashcroft also reported that almost one in five members of the armed forces have been refused service in shops, pubs and clubs for being members of the armed forces, and clause 2 of the Bill covers that issue.

Philip Davies: The hon. Gentleman said earlier, if I heard him correctly, that he was trying to extend the law to cover somebody who was, or was presumed to be, a service person in the course of their duties—or along those lines. I wonder where the Bill refers to that, because it states simply

“the victim being, or being presumed to be, a service person,”

without any qualification. He seemed to be adding a qualification to his remarks that I cannot see in the Bill, and I wonder whether he can clarify that.

Thomas Docherty: I expect the hon. Gentleman was wistfully thinking about all the times he has supported his Government, and he therefore misheard what I said earlier on. This measure is not about people who are

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carrying out their duties, but about those who are members of the armed forces. If he will indulge me, I will explain that briefly as I do not wish to detain the House.

Mr David Hamilton (Midlothian) (Lab): I congratulate my hon. Friend on promoting the Bill, and I am sure the whole House will support it. In a small number of cases a member of the armed forces might go into a shop and be refused access because they are wearing a uniform, which I think is outrageous. It is only a few years since the armed forces have started to wear a uniform again. I remember when they were encouraged not to wear their uniforms in Northern Ireland, and it is welcome for the point to be clarified. People should not verbally abuse our armed forces, or have the right to refuse them entry.

Thomas Docherty: I am grateful to my hon. Friend, and the House will want to pay tribute to his work championing the armed forces in Scotland. He served on the Defence Committee for a number of years, and has taken a keen interest in his local barracks at Glencorse.

It might help if I give a couple of examples of what we are talking about.

Philip Davies: Will the hon. Gentleman give way?

Thomas Docherty: The hon. Gentleman has tempted me, so I will let him intervene once more.

Philip Davies: The hon. Gentleman was right about what he said earlier, and the qualification he referred to—which I mistook—is someone being a member of the armed forces. Nobody disagrees with any of that sentiment, but I wonder where the Bill refers specifically to the fact that the abuse is happening because someone is a member of the armed forces. I cannot see that in the Bill. I understand that that is its purpose, but I cannot see where it states that specifically.

Thomas Docherty: If the hon. Gentleman looks, for example, at clause 1(a), (b), (c) and indeed (d), “service person” is mentioned repeatedly. I want to make a bit of progress because otherwise there is a danger that we could be perceived as trying to slow the progress of this important Bill.

We all saw with horror the events that took place in summer last year in Woolwich, and I am sure the whole House was in a state of revulsion at what happened. That is an extreme example, but later in the summer there was a lot of media interest in the Bill, and the BBC made a series of case studies as part of a day covering the issue of discrimination against the armed forces. The number of anecdotal examples that service personnel had suffered—although not on that same extreme level—was astonishing.

Rory Stewart (Penrith and The Border) (Con): There seems to be a potential distinction between what happened in Woolwich, which was clearly an act of murder and terrorism that was prosecuted under existing legislation, and discrimination legislation. It seems slightly dangerous to muddle criminal justice legislation and discrimination legislation. Will the hon. Gentleman please clarify what the link is between Woolwich and the legislation he is proposing?

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Thomas Docherty: If the hon. Gentleman shows a little forbearance, he will see where I am going with the argument.

A number of examples were cited. In the interests of making progress today and not getting bogged down, I will not talk about them all, but I want to mention one specific case. A young soldier from Bolton—coincidentally, he was also called Lee—phoned in to a Radio 5 Live programme on the morning of the BBC’s day of coverage on the issue. He said that he had returned from a tour in Afghanistan for a couple of weeks of well-deserved rest and recuperation and to see his family. It was the first time in three months that he had been home from deployment. He got off the train at Bolton quite late on the Saturday evening. He was in his uniform and had his bags with him. He was set upon by four or five drunken yobs. When the police caught them, the reason they gave for the assault was that they wanted to prove “how hard they were”. Those five brave yobs had attacked one soldier going about his business, having returned from service. I hope that answers, to an extent, the question the hon. Member for Penrith and The Border (Rory Stewart) asked. While we see the attack in Woolwich as the most extreme and horrific example, there are examples reported every month.

The Parliamentary Under-Secretary of State for Defence (Anna Soubry) indicated dissent.

Thomas Docherty: The Parliamentary Under-Secretary of State shakes her head. I would be grateful if, when she replies, she sets out why she so adamantly opposes providing support to members of our armed forces and protecting them from that kind of attack.

Anna Soubry: I was not shaking my head because of any desire not to give our armed services personnel all the support and protection they require; I was shaking my head because four or five yobs setting upon a soldier in order to prove, in the hon. Gentleman’s words, how hard they are is certainly not in the same category as the appalling murder of Drummer Rigby, or indeed in the same category as discrimination. I know that I am a lawyer, but those are different jurisprudential matters and there is a real danger, especially with this type of legislation, of confusing the issues. I will explain that later in my speech, but I wanted to set the record straight that I was not shaking my head for the reason that was alleged, but because I disagree that we can liken four yobs trying to show how hard they are and discrimination against armed forces personnel.

Thomas Docherty: I am grateful to the Minister for that attempt to clarify her position. I hope that she will have another stab at it later on.

The key point is that such attacks are too common, and that is unacceptable to this House and to the country, as I know from the feedback I have had not only from my constituents, but from the number of people who have contacted me, particularly since the summer. Indeed, there are people in the House service who have told me only this week how delighted they are to see the Bill coming forward. It is about sending a clear signal that we stand with those who risk their lives for our country to protect our freedoms and that it is unacceptable to attack, physically or verbally, a member of the armed forces because of that service.