40.In December 2023, we commented on an Order that added 20 drugs to those controlled under the Misuse of Drugs Act 1971.6 These included 14 ‘nitazenes’, described as “super-strength” drugs reported to be linked to a spike in fatalities in the UK. We noted and welcomed the Home Office’s plans to consult on and then legislate for a ‘generic control’ on nitazenes.
41.Amongst other measures, this Order would introduce such a generic definition and would specify that substances captured by it are controlled as Class A drugs. Again, we welcome this approach in principle, but observe that the Home Office will need to remain agile in amending the definition to capture new variants. Indeed, in response to our questions, the Home Office acknowledged that variants have appeared that would not be captured by the draft Order. Nevertheless, the Home Office told us this remained the “most effective” approach, saying that generic definitions have been used before in drug legislation and it is “not unusual” for them to require amendment.
42.The purpose of this instrument is to amend the Russia (Sanctions) (EU Exit) Regulations 20197 to modify the prohibition on the provision of certain legal advisory services and ensure that legal advice in relation to compliance with global sanctions is permitted. This follows an amendment made by the Russia (Sanctions) (EU Exit) (Amendment) (No. 3) Regulations 20238 to the 2019 Regulations, which inadvertently had the effect of criminalising a wide range of legitimate international sanctions compliance advice.
43.In our 46th Report of Session 2022–23,9 we drew the 2023 Regulations to the special attention of the House, following receipt of a submission from an international law firm which outlined their unintended effect. Following this, the Foreign, Commonwealth and Development Office (FCDO) urgently considered mitigating measures to ensure legitimate legal advisory services could continue lawfully. In August 2023, the FCDO issued a general licence to permit legal advisory services on non-UK sanctions compliance. This instrument replaces that licence and puts beyond doubt that legal advice in relation to compliance with global sanctions and criminal legislation is permitted. Further information on the FCDO’s approach can be found in Appendix 1.
44.This instrument corrects minor drafting errors in the Social Fund Winter Fuel Payment Regulations 2024 (“the original Regulations”),10 which introduced a means test by limiting the Winter Fuel Payment to those of pensionable age in England and Wales who also receive specified benefits. This instrument principally amends Schedule 2 to the original Regulations to correct a revocation; the Department for Work and Pensions (DWP) assured us that this error would have had no practical effect and that there would have been no impact on Winter Fuel Payments. This instrument breaks the 21-day rule to ensure the corrections enter into force at the same time as the original Regulations.
45.We were critical of the urgency with which the original Regulations were introduced,11 which precluded both the appropriate scrutiny and created practical issues with bringing in the change at short notice. The fact that the DWP needed to correct drafting errors in that instrument within two weeks of it being laid illustrates our concern that the original Regulations were rushed.
46.These two instruments are part of a package of measures that seeks to deal with the significant backlog of unaudited accounts of local public bodies in England and to put local audit on a sustainable footing. The Government announced the measures in a Written Ministerial Statement on 30 July 2024.12
47.SI 2024/907 will require so-called Category 1 local bodies13 to publish outstanding audited accounts for financial years up to 2022/23 by a statutory backstop date of 13 December 2024. Exemptions will apply if: auditors are considering a material objection; recourse to the court could be required; or from 2023/24, if the auditor is not yet satisfied with the local body’s Value for Money arrangements. The instrument also provides for a series of further backstop dates for financial years 2023/24 to 2027/28 and gives, from 2024/25, local bodies an additional month to prepare and publish unaudited (draft) accounts. The Ministry of Housing, Communities and Local Government (MHCLG) says that the backstops will enable auditors to rebuild assurance following disclaimed or modified opinions over several audit cycles rather than in a single year, reducing the risk of the backlog re-emerging. According to MHCLG, only one percent of Category 1 bodies in England published audited accounts on time for the 2022/23 financial year.
48.Alongside the instrument, MHCLG has laid a draft Code of Audit Practice on behalf of the Comptroller & Auditor General. The draft Code sets out what local auditors are required to do to fulfil their statutory responsibilities. It replaces the current Code, introduced in 2020, and supports the measures introduced in SI 2024/907 by, for example, introducing a requirement on auditors to issue their opinion in time for local bodies to publish their accounts by the relevant backstop date.
49.We note that MHCLG has committed to updating the House in the Autumn “on the Government’s longer-term plans to fix local audit”.14
50.Amongst the changes made by these three instruments to the immigration rules and associated fees are the following two measures.
51.First, the re-imposition of a visa regime on Jordan. Jordanian citizens required a visa to visit the UK until February 2024. From that date, Jordan was removed from the visa regime, instead becoming one of the first tranche of countries requiring an Electronic Travel Authorisation (ETA). The Home Office states that this led to a rapid increase in non-permitted travel from Jordan. The Government is therefore moving Jordan back out of the ETA system and restoring the previous visa regime, and requiring Jordanians transiting in the UK to obtain a transit visa.
52.Second, completing the introduction of the ETA regime for all remaining nationalities who can currently travel to the UK without a visa. Visitors from remaining non-European non-visa countries will require an ETA from 8 January 2025, and from European countries from 2 April 2025. We have previously called on the Home Office to monitor the impact of the introduction of ETAs—for example, on tourism numbers—and publish its findings.15 Questioned on the status of such monitoring, the Home Office told us that it was evaluating the rollout of ETAs and that, while it is too early to report, it would publish the findings of the evaluation when complete. As there has been no published evaluation of ETA to date, the House may wish to seek assurance from the Minister that the Home Office is confident the ETA system is working smoothly and effectively.
53.These Regulations allow the employer’s contribution rate in the police pension scheme in England and Wales to be determined by the Government, on advice from the scheme actuary, rather than (as previously) requiring secondary legislation to implement any change. The change simplifies the process of changing the rate but reduces Parliamentary oversight. The Home Office states that the revised arrangements mirror those of the Firefighters’ Pension Scheme and are also similar to those in other public service pensions.
54.The change follows an actuarial valuation that recommended an increase in the contribution rate from 31% to 35.2%. The Explanatory Memorandum (EM) states that the Home Office has provided “additional funding” to mitigate the impact of the increase. The amount of this funding, £259 million for 2024–25, was provided in a written statement16 that was linked from the EM but the amount was not included in the EM itself. The Home Office also told us that, while in theory the Secretary of State will have freedom to decide the contribution rate, its intention in practice is to set the rate at that recommended by the actuary. These additional pieces of information are central to an understanding of the effects of the policy change and should have been in the EM.
55.These Regulations provide for the third extension of two post-Brexit transitional periods relating to the regulation of overseas Central Counterparties (CCPs), which sit between the buyers and sellers of financial instruments to reduce counterparty risk. When the transition periods were first extended, we criticised one of the regimes that allows any firm to benefit from the status of a Qualifying CCP simply by applying to be recognised.17 We urged HM Treasury (HMT) to consider reforms before any further extension and expressed disappointment that a new, permanent regime for regulating CCPs had not been established.
56.At the time of the second extension, in October 2023, HMT told us that the “first phase” of the work on a new regime was complete.18 Asked for an update following the laying of these Regulations, HMT said that a new “framework” for the regulation of CCPs was commenced at the start of 2024, allowing the Government to work with the Bank of England to formulate a new regime. HMT told us that “while this work is a priority, we cannot give specific dates at this stage as to when this will be completed”. It is disappointing that, nearly four years on from the end of the Brexit transition period and nearly two years after our initial concerns, and despite this being a “priority” area, HMT is still not able even to provide a timeline for the reforms. We will be writing to the Minister, Tulip Siddiq MP, to request further details.
57.This instrument applies an infinite capital disregard to means-tested benefits assessments, to cover payments made to any beneficiary from the estate of a deceased person infected with contaminated NHS blood products, where that payment derives from an approved infected blood compensation scheme. In practice, this means that beneficiaries, such as a deceased infected person’s children, can receive compensation (via an estate) from an infected blood compensation scheme and remain on means-tested benefits. This delivers on a commitment made by the Government in its proposal for the Infected Blood Compensation Scheme.19
58.The independent Social Security Advisory Committee (SSAC), which is required by law to consider all benefits regulations, has raised some concerns about the instrument, principally: the way in which the Regulations rely on the making of payments to ‘estates’ rather than a specific category of person and whether this is sufficiently clear; and the need for greater clarity over how income or interest derived from payments from an infected blood compensation scheme will be treated in means-tested benefits assessments. The Department for Work and Pensions is considering the SSAC’s concerns, and an exchange of letters is available online.20
6 Draft Misuse of Drugs Act 1971 (Amendment) Order 2024, later made as SI 2024/190, commented on in 7th Report (Session 2023–24, HL Paper 36).
7 Russia (Sanctions) (EU Exit) Regulations 2019 (SI 2024/855).
8 Russia (Sanctions) (EU Exit) (Amendment) (No. 3) Regulations 2023 (SI 2023/713).
9 SLSC, 46th Report (Session 2022–23, HL Paper 231).
10 Social Fund Winter Fuel Payment Regulations 2024 (SI 2024/869).
11 SLSC, 2nd Report (Session 2024–25, HL Paper 4).
12 Local Audit Backlog, 30 July 2024, Statement UIN HLWS46.
13 Category 1 bodies include local authorities, police and fire bodies, as well as bodies such as National Parks Authorities, waste authorities and Passenger Transport Authorities.
14 See: Local Audit Backlog, 30 July 2024, Statement UIN HLWS46.
15 SLSC, 44th Report (Session 2022–23, HL Paper 217).
17 SLSC, 24th Report (Session 2022–23, HL Paper 123).
18 SLSC, 53rd Report (Session 2022–23, HL Paper 260).
19 HM Government, ‘Infected Blood Compensation Scheme Proposal Summary’ (21 May 2024): https://www.gov.uk/government/publications/infected-blood-compensation-scheme-summary/infected-blood-compensation-scheme-summary [accessed 8 October 2024].
20 HM Government, ‘The Social Security (Infected Blood Capital Disregard) (Amendment) Regulations 2024’ (19 September 2024): https://www.gov.uk/government/publications/the-social-security-infected-blood-capital-disregard-amendment-regulations-2024 [accessed 8 October 2024].