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Oral Answers to Questions
(13 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
1. What steps the Prison Service takes to communicate to police forces its assessment of the mental state of and threats posed to the public by prisoners immediately prior to release.
The Minister of State, Ministry of Justice (Nick Herbert)
Police forces are notified of all prisoner releases. Procedures are in place in each prison under the national security policies to ensure that security information about offenders is analysed and shared with the police and other agencies if it is considered that it will help the police to protect the public from serious harm.
Chi Onwurah
I referred to the mental health care and status of prisoners. The recent tragic events in Newcastle, on Tyneside and in Rothbury have highlighted how important the provision of good mental health care in prisons is. Will responsibility for that provision be given to local GPs in the reorganisation of the national health service, or will it be under the control of the prison?
Nick Herbert
First, I agree with the hon. Lady that it is important that we ensure adequate mental health care for prisoners, a very large number of whom suffer from mental health conditions. She will appreciate that I cannot comment specifically on the case to which she referred, which is the subject of an Independent Police Complaints Commission investigation and a police investigation. We are now considering carefully how the Government’s health reforms should fit in with how we want to provide health services in prisons.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
I thank the Minister for being careful not to speculate about matters that are the subject of inquiries and possible criminal proceedings. Is he aware that the people of Rothbury were extremely supportive of the police in the difficult task that they carried out, and that the police were very appreciative of that support at a time when the whole community felt seriously threatened?
Nick Herbert
I am sure that my right hon. Friend’s comments will have been noted. As he knows, the Under-Secretary of State for the Home Department, my hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire), visited Rothbury yesterday and met local police and residents to discuss those issues. However, my right hon. Friend will understand that the Government cannot comment further, given that two people have been charged with conspiracy to murder and that there is an IPCC investigation.
Maria Eagle (Garston and Halewood) (Lab)
Does the right hon. Gentleman recognise the importance of multi-agency risk assessment conferences in communicating between prisons, the police and others on any ongoing threats posed by specific perpetrators of domestic violence, and therefore in stopping that ongoing violent criminality in particular cases? Given that domestic violence accounts for 14% of all violent incidents, that almost 80% of victims are women, and that increasing focus on taking that crime seriously led to a 64% fall in its prevalence between 1995 and 2008, will he guarantee that MARACs will continue and even that they will be placed on to a statutory footing?
Nick Herbert
I am afraid that I cannot offer guarantees to the hon. Lady, but we can say in relation to that specific case that it is very important that all the lessons are learned about appropriate information sharing. The Government understand the significance of the domestic violence issues that she raises.
Mr Dominic Raab (Esher and Walton) (Con)
2. What plans the Government have to review the use of administrative penalties.
The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
The Government are undertaking a full assessment of sentencing policy to ensure that it is effective in deterring crime, protecting the public, punishing offenders and reducing reoffending. We are considering our approach to out-of-court penalties as part of this work.
Mr Raab
I thank the Minister for that answer. By 2007, fewer than half the offenders brought to justice—on the previous Government’s measure—had ever seen or been passed through the dock of a court. A man who glassed a pub landlady recently was cautioned, and a serial thief was issued with a dozen on-the-spot fines. What plans does he have to reverse Labour’s pay-as-you-go crime policy, and does he agree that magistrates courts have a vital role to play?
Mr Djanogly
The number of out-of-court disposals administered each year has risen by 135% since 2003. Such disposals now account for 40% of all offences brought to justice. However, during the same period, the number of convictions at court has remained broadly stable, suggesting that out-of-court penalties are expanding the number of offenders who are dealt with rather than being used as an alternative to prosecution.
Angie Bray (Ealing Central and Acton) (Con)
3. What plans he has for the future of community service sentences.
The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)
Our plans are to ensure that community sentences are tough, effective and rigorously enforced, and that they punish offenders, but steer them off drugs and alcohol and into employment. We are conducting a full assessment of sentencing policy, including asking judges and magistrates for their views on which community sentences are the most effective.
Angie Bray
I thank my hon. Friend for that answer. Many of my constituents hold to the old-fashioned notion that justice should not just be done, but be seen to be done, and they do not have much faith that community service sentences will deliver on that. How can he reassure my constituents that community service sentences will be robust and not a soft option?
Mr Blunt
We believe that making community sentences tougher in delivering punishment—especially looking at the operation of community payback—and more effective in delivering rehabilitation, restoration and the protection of the public, will help to show that people can have increasing confidence in such sentences. Achieving those objectives will be an important element of our assessment of sentencing policy.
Mr David Hanson (Delyn) (Lab)
If the Minister is to increase the number of community sentences as the Justice Secretary wishes to do, can he give the House an indication of how much money he intends to transfer to the probation budget, given that it has an in-year cut this year of £20 million? Can he also tell us which sentences of under six-months he thinks are inappropriate, given that at present they are available for offences such as assault on a police officer, domestic violence, child abuse and firearms offences? Indeed, three quarters of people sentenced to under six months have committed seven or more offences.
Mr Blunt
On the latter point, the right hon. Gentleman will have to wait until the sentencing review when we will bring forward our detailed proposals, which—I am sure—will hang together in a properly co-ordinated manner. He must also appreciate that the economic inheritance that this Government received—[Interruption.] There is no point hon. Members groaning. It is a fact of life that an increase in budgets in the environment that we inherited is simply not going to happen.
Rehman Chishti (Gillingham and Rainham) (Con)
With regards to the sentencing review, will the Minister consider the use of more judicial discretion—unfortunately removed by the previous Government—thereby trusting our judiciary?
Mr William Bain (Glasgow North East) (Lab)
4. What assessment he has made of the effectiveness of the Human Rights Act 1998.
The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
In the coalition agreement, the Government committed to establishing a commission to investigate the creation of a Bill of Rights. The scope of the commission and its terms of reference will be announced in due course, but it is my expectation that in the course of its work the commission will consider the experience of the Human Rights Act 1998.
Mr Bain
I am grateful to the Lord Chancellor for that response. Does he agree that, on the 10th anniversary of the implementation of the Act, domestically enforceable and universally applicable human rights are one of the best checks on Executive power that we have, and does he agree with the remarks that he made in The Daily Telegraph on 27 June 2006 that to repeal the Human Rights Act would be an act of “xenophobic and legal nonsense”?
Mr Clarke
We are going to review in due course every aspect of the working of the Human Rights Act in the light of that 10 years of experience. I agree that there are very important protections for human rights, and there is no question of moving away from the European convention on human rights. The coalition agreement does not contemplate that. Actually, the changes that have taken place in British common law, with the huge enlargement of the scope of judicial review—which includes reviews of all ministerial decisions and of legislation current in the House—have also greatly altered the scene. Sometimes that gets confused with the European convention on human rights. I have given a range of views in the past and no doubt we will consider those views carefully in the light of the report that we eventually get from the commission.
Dr Julian Huppert (Cambridge) (LD)
Is the Lord Chancellor aware of the book by the hon. Member for Hereford and South Herefordshire (Jesse Norman) and Peter Oborne entitled “Churchill’s Legacy: The Conservative Case for the Human Rights Act”? Will he encourage his right hon. and hon. Friends to read it and thereby dispel the many myths about the Act? The Human Rights Act exists for all of us: what is not to like?
Mr Clarke
The European convention on human rights was produced after the second world war, largely at the instigation of Churchill and others, to ensure that the whole continent developed in line with those values for which the British had fought the war. The principal architect and draftsman of the convention was a man called Maxwell Fyfe. I recall that history because it is relevant to this issue, and we have to improve public understanding of the application of human rights in British law as well as reviewing the operation of the Act.
Mr Jack Straw (Blackburn) (Lab)
The right hon. and learned Gentleman said that he had had a range of views on whether the Human Rights Act should be repealed, but he has actually had one view, which he has repeated over and over again—he even described the Prime Minister’s proposal as “anti-foreigner”. Given that consistency, which I commend the right hon. and learned Gentlemen on and welcome because it was supporting a Labour policy, and given that, as he well knows—because he is a very bright man—the issue is not the European convention on human rights but the Human Rights Act passed by this Parliament, will he now rule out the abolition of the Act?
Mr Clarke
I do not mind being quoted from my freelance days on the Back Benches. However, in their enthusiasm to find quotes, people find the odd word and attribute them to things. I never accuse any of my colleagues of being anti-foreigner. Part of the confusion about the European convention tends to be that somehow it is not British, which I just addressed in pointing out that it was drafted by David Maxwell Fyfe and very much supported by the British Government and both main parties at the time. The Human Rights Act has now had 10 years, and it is time to review it. There is a range of views and sometimes concern in this country about exactly how it relates to Parliament and where our constitution now is on these matters. In due course, we will set up a convention to advise us on that.
Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)
5. How many representations he has received (a) in favour of and (b) against his recent proposals to close a number of magistrates courts; and if he will make a statement.
The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
We are four weeks into a 12-week public consultation process. As such, the responses to each of the 16 consultation papers have not yet been collated and analysed. This will happen once the consultation closes on 15 September. However, I can confirm that, as of 15 June, there had been 20 letters to Ministers in this Department from hon. Members and Welsh Assembly Members regarding the proposals. Two Adjournment debates on the consultations have also been held.
Mr Llwyd
I am grateful for that detailed response. I have the great pleasure and honour to represent the good people of Dwyfor Meirionnydd, which is 100 miles from north to south and 90 miles from east to west. It currently has two magistrates courts. Under the Government’s plans, however, that will be down to one, making a complete and utter mockery of any idea of local justice. May I ask the Minister to think again and consider carefully—and I mean carefully—all the consultations and replies he gets? In the meantime, will he ask his right hon. and learned colleague, the Secretary of State for Justice, to extend the consultation period, because in my 20 years in this place I have never known a serious consultation to take place during August?
Mr Djanogly
The hon. Gentleman says we should think again, but we are thinking—we are in a consultation process, to which he is entitled and welcome to make comments. There is one court in his constituency on whose closure we are consulting. It is envisaged that work from this court will be transferred to Caernarfon magistrates court, which is approximately 20 miles away. The court in question has a very low utilisation rate, at just 28.9%. It sits two days per week in one courtroom and its facilities are generally considered to be inadequate.
Alun Cairns (Vale of Glamorgan) (Con)
Will the Minister take into account, when making a decision on the closure of the magistrates courts, the facilities and the wider social implications of individual court closures? Barry magistrates court has separate entrances for witnesses and defendants, which is an important consideration in a range of cases, particularly those of domestic violence. Will that sort of issue be a factor?
Mr Djanogly
We remain committed to supporting local justice being administered in magistrates courts, but my hon. Friend would be wrong to confuse community justice, access to justice, efficient justice, speedy summary justice or timely administration with bricks and mortar.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
6. What recent representations he has received on his Department’s responsibilities in relation to the Crown dependencies.
The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
I am unsure quite what kind of representations the hon. Gentleman has in mind. As he would expect, however, the Ministry of Justice constantly receives a wide range of communications in relation to its responsibilities for the Crown dependencies.
Tom Greatrex
The representations that I had in mind were from Crown dependencies such as the Isle of Man. Can the right hon. and learned Gentleman assure me that he and his ministerial colleagues in the other place, who I gather have responsibility for Crown dependencies in his Department, will consult with the Crown dependencies if there is any suggestion that responsibility for them be moved to another Department, so that the important distinction between Crown dependencies and overseas territories is recognised throughout the civil service?
Mr Clarke
As the hon. Gentleman says, it is my right hon. Friend Lord McNally who takes a lead in our Department on the Crown dependencies. I will certainly take note of what the hon. Gentleman says about any question of changing ministerial responsibility, but I should point out that this is a matter for my right hon. Friend the Prime Minister and the Cabinet Secretary. However, I take on board the hon. Gentleman’s views and will ensure that they are disseminated among those responsible.
Alun Michael (Cardiff South and Penarth) (Lab/Co-op)
7. What steps he is taking to ensure the effectiveness of complaints systems for victims of crime and others within the criminal justice system.
The Minister of State, Ministry of Justice (Nick Herbert)
Policies are in place in individual criminal justice agencies to respond to complaints from victims and others. Improving the ability of victims to hold services to account and gain redress when things go wrong will be considered as part of a full review of victim and witness policy and services.
Alun Michael
I am grateful to the Minister for that reply. If somebody has a complaint that their situation is being dealt with badly by the system, it is often difficult to know whether that is the fault of the police—in which case there is the Independent Police Complaints Commission, which is an effective system—or the Crown Prosecution Service, which does not have an adequate complaints system, and that means that people fall through the gaps. Will the Government take that into account as part of the review?
Nick Herbert
We will. I appreciate the right hon. Gentleman’s long-standing interest in such issues and some of the proposals that he has made in relation to them. We aim to improve the accountability of service providers and redress for complainants through the criminal justice system. It is important that we should address the fact that there can be confusion on the part of victims about whom they should complain to.
Mr David Burrowes (Enfield, Southgate) (Con)
Last week an Enfield magistrate complained to me about the waste of court time. That magistrate spends one day a week dealing with prosecutions for dropping cigarette butts. If such cases are to be prosecuted, surely it would be in the best interests of the taxpayer and justice for them to be heard in a town hall, rather than in a courthouse.
Nick Herbert
It is important for us to look at the opportunities for the administration of justice that lie outside buildings. There has been the development of what became known as the “summary justice agenda”, which is actually administrative justice, with things such as penalty notices for disorder. However, I would be happy to talk to my hon. Friend about whether the case that he has raised has been dealt with in an appropriate manner.
Mr Jack Straw (Blackburn) (Lab)
The Minister of State will recall that at Justice questions on 15 June, he said in answer to me:
“We are aware of the important work that the National Victims’ Service is planning to do.”—[Official Report, 15 June 2010; Vol. 511, c. 733.]
Given that, I am surprised that there is no reference whatever to the National Victims’ Service in the just-published draft structural plan for his Ministry. I wonder whether he could explain the omission of any reference to that service.
Nick Herbert
I do not think that the right hon. Gentleman should read anything into that omission. I said then—and I say now—that we are reviewing in full the arrangements to ensure that victims are treated properly by the criminal justice system. Perhaps he will have already seen the strong speech that is to be made by the victims commissioner on such issues this evening. We take those issues immensely seriously, as we do to ensuring that justice is done for victims.
Anna Soubry (Broxtowe) (Con)
8. What plans he has for the future of the National Offender Management Service.
The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)
The original objective of the National Offender Management Service was more effectively to deliver prison and probation services in a co-ordinated way. The current structure has not worked as well as predicted and will not best serve the objectives of coalition policy towards the rehabilitation of offenders and the involvement of social investors, and the private and voluntary sectors in this work. Therefore, the structure of the National Offender Management Service is being considered not only as part of the Department’s overall contribution to the spending review, but to ensure the effective delivery of prison and probation services in the light of this autumn’s Green Paper on the new approaches to rehabilitation and the review of sentencing policy. That work will also reflect the three strands of the big society agenda, which my right hon. Friend the Prime Minister announced yesterday: social action, public service and community empowerment.
Anna Soubry
I am grateful to the Minister for that answer. Can he assist by saying what opportunities will exist for probation trusts when we consider our rehabilitation reforms?
Mr Blunt
I am grateful to my hon. Friend for her question. Today’s probation trusts possess the nation’s professional expertise on offender management. We want to release all our capacity—public, private and voluntary—to effect a revolution in how we provide for rehabilitation of offenders. No organisations are better placed to deliver that than today’s probation trusts. I hope that they seize this chance, which is why I have asked the Probation Association and the Probation Chiefs Association to work urgently with my officials to help shape our Green Paper proposals. I am confident about what probation trusts will be able to achieve.
Chris Leslie (Nottingham East) (Lab/Co-op)
I recommend the Minister deal with the point that I believe the hon. Lady was raising. In Nottinghamshire, there is certainly a strong case for a probation trust, but irrespective of whether we have a particular type of structure on offender management, do not the cuts to the prison budget—and, indeed, as we have heard today, the cuts to the probation service—show that the big society to which he referred is actually a euphemism for allowing prisoners to roam free within the community at large?
Mr Blunt
No, it is not. The hon. Gentleman and all his right hon. and hon. Friends are going to have to get used to the fact that we are going to do things rather differently. We are going to pay for outputs, not direct inputs or have targets or over-control our public services by instructing them precisely how to achieve their objectives. One way in which we are going to increase our capacity for offender management is, I hope, to enable probation trusts to be able to affect the involvement of the whole community—including the private, the voluntary and charitable sectors—to increase our nation’s capacity to deal with offenders and to rehabilitate them effectively.
Meg Munn (Sheffield, Heeley) (Lab/Co-op)
9. If he will conduct a public consultation on whether to grant anonymity to defendants in rape cases.
The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)
As I told the House in the full-day debate of 8 July, the Government are minded to strengthen anonymity before charge. We want to hear the views of those who may have any new evidence to assist our deliberations, and we will bring our conclusions to Parliament in the autumn. However, since the principal points of judgment around the issue are clear and very narrow—not least in the light of our excellent debate 12 days ago—the Government do not propose to manage a full, formal public consultation.
Meg Munn
I thank the hon. Gentleman for his answer. Has he considered the fact that, under his current proposals for anonymity up until charge, somebody arrested on suspicion of rape but then charged with sexual assault would enjoy anonymity, whereas somebody arrested on suspicion of sexual assault but then charged with rape would not enjoy anonymity under the coalition’s proposals?
Mr Blunt
We are now dealing with quite a narrow point because it was agreed in 2003—[Interruption.] It is quite a narrow point; it was agreed on both sides of the House when the Sexual Offences Act 2003 went through Parliament that all people charged with offences ought to have their identity protected until the point of charge. That is the guidance that the Press Complaints Commission put into effect in 2004. There is an issue around the strength of that guidance and, as I said in the debate 12 days ago, we are not satisfied that it is strong enough. We want in the first instance to try to find a non-statutory solution, and given that we had 21 Criminal Justice Acts passed over the 13 years of the last Administration, I am sure that Labour Members will understand why we are loth to find even more statutes to put on the statute book.
Maria Eagle (Garston and Halewood) (Lab)
Does the hon. Gentleman not understand that the point raised by my hon. Friend the Member for Sheffield, Heeley (Meg Munn) is one reason why this idea—it was tried before between 1976 and 1988—was abolished by a previous Conservative Government? It did not work. Given that this idea was in neither the hon. Gentleman’s manifesto nor that of the Liberal Democrats, what possible reason can he have for failing to provide a proper consultation before changing the law in the ridiculous way he proposes to do?
Mr Blunt
First, when it was ended in 1988, it was not because it did not work. The hon. Lady should have paid rather more attention to the points put forward by the noble Lord Ackner in the 2003 debates when he spoke to his amendments on this subject. She should also note that the nature of rape changed, by definition, in the Sexual Offences Act 2003. All that means that the situation has changed since 1988.
Mr Graham Allen (Nottingham North) (Lab)
10. What recent representations he has received on his Department’s policies to reduce the rate at which young people enter the criminal justice system; and if he will make a statement.
The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
I am not aware of any specific recent representations made on this topic. The Government want to ensure that young people do not enter the criminal justice system unless it is necessary. Our policies will be considered in the context of our comprehensive assessment of sentencing and rehabilitation.
Mr Allen
Is the Secretary of State aware that the best way of keeping young people out of a life of crime is to intervene early in their lives, so that they have the social and emotional capability to resist criminality? Will he commend the current project in Peterborough, where an early intervention bond has been created by Social Finance Ltd and St Giles Trust to ensure that offenders do not reoffend and that they leave the criminal justice system at the earliest possible moment? Is he willing to extend that experiment, which was introduced by the last Government, and to consider its possible extension throughout the criminal justice system?
Mr Clarke
I repeat the support that I have given before to the hon. Gentleman’s campaign for early intervention. I entirely agree with what he says.
We are certainly very interested in the project that is about to get under way in Peterborough. It will have to be evaluated in due course, but my ministerial team will be following closely this system of raising capital finance by means of a social bond, and then targeting the need to reduce the rate of reoffending in a particular group. Reducing reoffending will be a key part of our policy, and this is an important way of trying out one method of tackling it. I hope that it succeeds.
Mary Macleod (Brentford and Isleworth) (Con)
Does my right hon. and learned Friend agree that some of those young offenders are in the criminal justice system owing to their lack of a strong, solid education? What plans has he to try to ensure that something is done about that?
Mr Clarke
The present Government have an extremely important programme of education reform. Anything that can be done to raise standards of education and training in this country will, I believe, have an indirect impact on the number of people who drop out of society in some way and are tempted to start offending.
I agree that we need to look across the broad range of social policy, considering relationships between crime and housing problems, employment problems and education and training problems, if we are to achieve the improvement in our social fabric which, eventually, will continue to reduce criminality. Meanwhile, some young people are serious offenders. We do need a secure estate, and we do need to prosecute those from whom the public must be protected. I think that we would all welcome any measure that will successfully reduce the number of young people who are needlessly criminalised when they could be diverted into a more sensible way of handling their problems.
Mr David Hanson (Delyn) (Lab)
Is the Justice Secretary aware that the rate of reoffending and entry into the youth justice system by young people fell by 10% during the last years of the Labour Government? That fall was due not least to the fact that we invested heavily in the three-year youth crime action plan, the third year of which ends this year, 2010-11. It involves issues such as prevention, and includes the Peterborough project that the Justice Secretary has just endorsed. Will he give an indication of what plans he has to continue the youth crime action plan after this year?
Mr Clarke
I agree that there has been a reduction in the number of people entering the criminal justice system. Notwithstanding my usual caveats about all crime statistics, which can be used by Members on either side of the House to prove practically anything over whatever period they choose, I think that one thing on which we agree is the need to divert from needless criminality young people who can properly, in the public interest, be dealt with in some other way.
The youth crime action plan, and a number of other interesting experiments involving diversion out of the court system in which the last Government were engaged, will certainly be investigated and followed up by the new Government. We are not remotely partisan about the issue. We wish to look further for more outside experience of how best to tackle reoffending and the underlying problems of youth delinquency, in order to take more young people out of court and out of criminality.
Mrs Helen Grant (Maidstone and The Weald) (Con)
11. What the reoffending rate was for prisoners who had served custodial sentences of over 10 years in the latest period for which figures are available.
The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)
Of the 125 adult offenders released from a custodial sentence of over 10 years in the first quarter of 2008, 6.4% committed at least one further offence in the one-year follow-up period. In contrast, among those serving custodial sentences of 12 months or less in 2008, the reconviction rate was 61.1%.
Mr Blunt
Short sentences for men have proved pretty ineffective, and I think that short sentences for women are even more ineffective and deleterious. We support the conclusions of the Corston report, we are conducting an analysis of the effectiveness of different sentences as part of the current sentencing review, we are committed to reducing the number of women in prison, and a network of women-only community provision is being developed to support robust community sentences.
Perhaps at this point I should throw a bouquet to my predecessor, the hon. Member for Garston and Halewood (Maria Eagle), in recognition of her work in this regard. We propose to build on it.
Emma Reynolds (Wolverhampton North East) (Lab)
Does the Minister agree that there is a serious risk of reoffending rates increasing in the next five to 10 years if the prison budget cuts result in less education and rehabilitation of prisoners?
Mr Blunt
The hon. Lady identifies the challenge we face. We as a nation have to increase our capacity to deliver education and all the other services that are required to assist in rehabilitating offenders. That is why we are going to effect a rehabilitation revolution which will involve that great army of people out there who want to help us and who have so far found our current structures very difficult to engage with. Moving to output-based measures will enable us to use the capacity of all those people who want to help us in the incredibly important work of rehabilitating offenders much more effectively than we have done to date.
Mr Philip Hollobone (Kettering) (Con)
12. What recent discussions he has had with (a) the UK Border Agency and (b) foreign Governments on the compulsory transfer of foreign national prisoners to detention in their country of origin.
The Minister of State, Ministry of Justice (Nick Herbert)
Ministry of Justice officials have been in regular contact with their colleagues at UKBA to identify suitable prisoners for transfer under the additional protocol to the Council of Europe convention on the transfer of sentenced persons. A number of cases are currently being pursued. Discussions between officials of member states of the European Union on the implementation of the EU prisoner transfer agreement took place in April.
Mr Hollobone
We currently have the pleasure and privilege of paying for the board and lodging of 752 Nigerians in British jails at a time when we are giving that country £132 million a year in development aid. Her Majesty’s Government have been negotiating with the Nigerian Government on the compulsory transfer of those prisoners since 2007. Could we urge them to get a move on?
Nick Herbert
I understand my hon. Friend’s concern about this and note the ten-minute Bill he recently introduced. The Government believe that wherever possible foreign national prisoners should serve their sentences in their own country. Negotiations on a compulsory prisoner transfer agreement with Nigeria will be concluded as soon as changes to Nigerian domestic legislation have been made.
Keith Vaz (Leicester East) (Lab)
In evidence to the Home Affairs Committee this morning, Lin Homer, the head of UKBA, told us that 14% of the prison population were foreign nationals and that 700 officials were working in her department on this issue. As it is a priority for the Government, is the Minister confident that he has sufficient staff dealing with what is a very important issue?
Nick Herbert
The Government are determined to improve performance in the removal of foreign nationals and in prison transfer agreements. The right hon. Gentleman will know that only 41 prisoners were transferred this year, but compulsory transfer has been available only since November 2009, so we expect performance to improve.
Mr Matthew Offord (Hendon) (Con)
13. Whether he plans to bring forward proposals to change the law so that only the Crown Prosecution Service will be able to initiate prosecutions for universal jurisdiction offences.
The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
The Government consider it unsatisfactory that an arrest warrant for such offences can be issued on the application of a private prosecutor on the basis of evidence that would be insufficient to sustain a prosecution. We are urgently considering how to proceed and expect to make an announcement shortly.
Mr Clarke
Of course we must enforce properly in respect of war crimes and other matters of universal jurisdiction where proper cases arise, but I agree with my hon. Friend that it is not in any sense in this country’s interests that people can be arrested upon arrival on a level of evidence that would not remotely sustain a prosecution, which is why we intend to address this matter and to make an announcement in the very near future.
Kevin Brennan (Cardiff West) (Lab)
14. What steps he plans to take to reduce the number of people in prison.
The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
Over the coming months we will look in detail at the sentencing frameworks for adult and young offenders, as well as at the range of penalties available in the criminal justice system. That means introducing more effective policies, as well as overhauling the system of rehabilitation to reduce reoffending. We will take the time necessary to get it right and will consult widely before bringing forward full plans for reform.
Kevin Brennan
Will the Secretary of State give the House three examples of the kind of criminals currently in jail who will not be in prison under his plans?
Mr Clarke
I will not anticipate the sentencing review. [Interruption.] No, I will not. The last person I met in jail who clearly should not have been there had been sent to prison because he was in dispute with his ex-wife over the maintenance he was supposed to pay for their children. Of course he was under an obligation to pay for his children, but providing a place for him in jail was not the best use of prison. Anybody who visits a prison will find people who are there for rather surprising combinations of reasons, some of which are far away from those relating to serious crimes.
Prison is the most effective punishment we have for serious criminal offenders. There is a continuing case, and there always will be one, for protecting the public against the activity of serious offenders by imprisoning them. However, in recent years, we have not paid enough attention to how, at the same time, we minimise the risk of reoffending, seek to reform those in prisons and divert them away from future crime, and eventually ensure that there are better and more effective ways of dealing with those who are capable of being dealt with.
Miss Anne McIntosh (Thirsk and Malton) (Con)
Will my right hon. and learned Friend carefully examine the early release scheme pursued by the previous Government, which led to a very high proportion of those released early going on to reoffend, to great harm to the British public?
Mr Clarke
That was not a policy; that was a catastrophe. The previous Government went through a phase of allowing their rhetoric and some of their policy intentions to outrun any serious common sense and then found that they had to let people out early, before they had finished their sentence, because they could not physically get them into prisons. Whatever else comes out of a sentencing review, I trust that we will avoid any nonsense of that kind in our period of office.
Caroline Flint (Don Valley) (Lab)
Evidence suggests that 75% to 90% of rapes go unreported, and I hope that the whole House will try to deal with that situation to improve it. Is the Justice Secretary at all worried that his plans to provide anonymity for defendants in rape trials will contribute to fewer rapists going to prison?
Mr Clarke
I do not think that there is anybody in this House—and there has not been for as long as I can remember—who is not in favour of anonymity for people who make complaints of rape and who does not think it extremely important to encourage women to come forward on all proper occasions to press complaints about the serious criminal offence of rape. The issues surrounding anonymity for the person accused are quite different from that, and the Under-Secretary of State for Justice, my hon. Friend the Member for Reigate (Mr Blunt), has just addressed those questions. This is a matter of how far we can protect those people, and others accused of criminal offences, up to the time of charge. That approach was agreed by those on both sides of this House in the not-too-distant past—in the previous Parliament—and it probably will eventually be agreed in this Parliament too.
Ian Swales (Redcar) (LD)
15. What mechanism he plans to introduce to reduce the use of short prison sentences; and if he will make a statement.
The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
We are conducting a full assessment of sentencing policy to ensure that it is effective in deterring crime, protecting the public, punishing offenders and cutting reoffending. Short custodial sentences will be considered as part of that assessment, and we will be asking judges and magistrates for their views on these sentences and on community sentences.
Ian Swales
I thank the Secretary of State for that answer. In the case of non-violent young offenders, will he support restorative justice programmes, such as neighbourhood justice panels, which are much more successful in reducing crime than traditional forms of punishment?
Mr Clarke
We are very interested in taking further the idea of restorative justice. Some very interesting experiments in youth restorative justice are under way and they will be carefully evaluated. In all these matters, evaluation is extremely important. People come forward with extremely enlightened and attractive views on how reoffending might be reduced or on how youth offenders might be diverted from the prison system, some of which work and some of which, alas, do not. One has to take a realistic look at them and evaluate them after a sufficient experiment to decide what works. On rehabilitation generally, that is one of the main reasons why we will concentrate on paying by results, wherever possible.
Mr George Howarth (Knowsley) (Lab)
Does the Secretary of State accept, though, that short sentences might have a role to play in cases where a probation order or a community sentence has failed?
Mr Clarke
I am not sure where the idea that I am against all short sentences has come from. A short sentence is usually taken to mean any sentence of less than 12 months. My own view, pending this review, has always been that there is indeed a case for some short sentences where there is no realistic alternative and one is dealing with a recidivist offender. Wherever possible, of course, the pointless short term of imprisonment should be avoided where a really effective and convincing community penalty is available in its place.
Stephen Barclay (North East Cambridgeshire) (Con)
16. What account he took of the availability of public transport in rural areas around Wisbech in his decision to propose the closure of Wisbech magistrates court.
The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
In selecting courts on which to consult, one of the key principles applied was to try and ensure that people should not have to make excessively long or difficult journeys to attend court. Although it is important, proximity to a court should not be the only consideration—we need also to consider the speed with which cases are dealt with and the quality of the facilities at our courts. We also want to explore ways we can harness technology more effectively so people do not necessarily physically have to attend court when accessing court services.
Stephen Barclay
I thank the Minister for that reply and for the constructive way in which he is consulting. As he says, proximity is not the only factor but what is relevant is how many people are affected by a journey of more than 60 minutes. Will he clarify which year he is using to assess the population given that Fenland has seen a significant increase in its numbers in recent years? Will he allow for the housing trend where planning permission has already been given?
Mr Djanogly
We are consulting on one court in my hon. Friend’s constituency, Wisbech. As my hon. Friend noted, it is envisaged that work from that court will be transferred to Peterborough magistrates court, which is approximately 23 miles away. Travel times and distances will be constant from various locations within the constituency, so population is only one aspect to consider. We must also consider the frequency of court attendance, which is very low in Wisbech, with a utilisation of only 37%.
Mr Graham Allen (Nottingham North) (Lab)
T1. If he will make a statement on his departmental responsibilities.
The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
My departmental responsibilities remain unchanged, but may I take this opportunity to point out to the House and to the hon. Gentleman that I have today made a written statement setting out plans for the implementation of the Bribery Act 2010? This important piece of legislation from Parliament reflects cross-party support for anti-bribery measures and its effective implementation is a priority for me in my role as the coalition’s international anti-corruption champion—[Interruption.] I used to shadow Lord Mandelson—he had more titles than I have. The new framework of offences will replace the old and fragmented mix of statutory and common law offences and they should facilitate a more effective criminal justice response to bribery. An important part of the implementation is a public consultation on the guidance to be produced under section 9 of the Act. We want the formulation of this guidance to be informed by the expertise of the business community, specialist anti-bribery organisations and others with informed opinions. I expect this process to allow us to publish guidance early in the new year, in time for the commencement of the Act in spring 2011.
Mr Allen
May I welcome the Secretary of State’s recent remarks about tackling the causes of crime as well as crime itself? Will he bear in mind the words of John Carnochan, the hard-bitten head of homicide in Glasgow who, having dealt with offenders who had committed serious and violent crimes who were the sons and grandsons of offenders, said that given the choice between 100 extra police officers and 100 health visitors, he would choose the health visitors given his intergenerational experience? Will the Secretary of State will the means as well as the ends in tackling the causes of crime?
Mr Clarke
I am afraid that the Government have inherited a situation, for which I blame the previous Government, in which we must tackle these solutions against a background of not simply being able to wheel in more resources. The first step is to make cuts in wasteful expenditure now. I accept quite a large part of the hon. Gentleman’s analysis and we should also consider how we look across all Government Departments and all sectors—we must take into account health, housing, employment, education and training at the same time as we consider policing, justice and imprisonment—because the whole picture contributes to the broken society and tackling it will help to contribute to a less criminal society.
Mr Robert Buckland (South Swindon) (Con)
T2. In the light of the Legal Services Commission’s recent misallocation of duty solicitor scheme membership and duty rotas for criminal legal aid work, will my right hon. and learned Friend undertake an urgent review of the LSC’s continuing inefficiencies?
The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
My hon. Friend has just made serious accusations of mismanagement, and I shall certainly consider the issues that he has raised and get back to him shortly.
John Robertson (Glasgow North West) (Lab)
T4. The Secretary of State should be aware that the Justice Minister north of the border has said that any questions regarding al-Megrahi resided with the United Kingdom Government. If that is true, will the Secretary of State make a statement? If it is not true, can he put the record straight?
Mr Kenneth Clarke
My understanding is that this was a decision solely for the Scottish Government and that it was taken on humanitarian grounds. Plainly, it predates my period of office, and that just about sums up my full knowledge of the situation, so I am not in a position to make a statement.
Robert Halfon (Harlow) (Con)
T3. Following today’s newspaper reports, will the Secretary of State ensure that we will never again release a mass murderer who was convicted by British courts, letting them out of prison on dubious health grounds and where there are murky commercial interests and sending them away to be lauded by a dictatorship?
Mr Clarke
My hon. Friend takes a particular view of the facts. From the Dispatch Box, I must take the view that the decision was taken by the Scottish Government on the declared basis of humanitarian grounds. No Minister of the Crown—certainly not me—is in a position to add to that.
Stella Creasy (Walthamstow) (Lab/Co-op)
Given the proposed review of legal aid, does the Justice Secretary agree that the problems faced by the Refugee and Migrant Justice organisation because of the late payment of fees and the lack of clarity about the number of current cases affected—the Home Office has told me that it is 5,000 and the Legal Services Commission has admitted that it simply does not know—mean that it is vital for the Government to intervene until these problems are resolved to prevent that organisation from going into administration and to avoid the possibility of further chaos, with expense, within our asylum system?
Mr Djanogly
I am pleased that the hon. Lady has brought up this important issue. The RMJ was maintaining that it had 10,000 clients, but the administrators who went into that organisation to put it into administration assessed the number of clients at more like between 4,000 and 5,000. What is important is the clients. We need to move on from the administration of that organisation to concentrating on its clients, and I assure her that the Department and I are doing exactly that.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
T5. Having read the published figures that one in seven of our prisoners are non-UK nationals—according to recent statistics, 585 of them are from Vietnam—does the Minister agree that we could save some of the money spent on UK prisons by transferring those prisoners, perhaps also paying or giving aid to their Governments, perhaps up to 25%, to house them in their jails? That would save money for the UK taxpayer and would put foreign prisoners where they belong.
The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)
There are already a number of schemes to encourage foreign national prisoners to go home and serve their sentences there. As I said in the last Justice questions, we will have to work very hard in this respect. I have noted the comment of the Chairman of the Home Affairs Select Committee about the fact that some 700 people in the UKBA are working on it, which gives some idea of the priority that it has. I assure my hon. Friend and all hon. and right hon. Members that that level of priority will continue. We need to save the money that we should not be spending on imprisoning foreigners in our jails.
Caroline Lucas (Brighton, Pavilion) (Green)
Following the revelations at the weekend that some quite shocking restraint methods are authorised in the “Physical Control in Care” manual for use by staff in secure training centres for children, will the Secretary of State introduce an explicit ban on corporal punishment in secure training centres and other youth offender institutions? Will he establish a public inquiry, chaired by a member of the judiciary, to establish the compatibility of practices in secure training centres with article 3 of the European convention on human rights?
Mr Kenneth Clarke
Of course, we keep under review the very careful guidance about the use of restraint techniques in those circumstances, and it is a matter of regret that such guidance has to be issued. However, the hon. Lady should bear it in mind that we are talking about children and young people, some of whom are much bigger than I am and who probably have a problem with drug abuse and a history of violent crime. The completely unarmed staff have to be given some instructions in how to control those young people when they are getting out of control and it is not always easy or possible to use totally restrained methods.
Mr Peter Bone (Wellingborough) (Con)
T7. All members of the European Union have signed the Council of Europe convention on the transfer of sentenced persons, yet we still have 3,100 EU nationals in our jails. The Secretary of State and I share an enthusiasm for the European Union, so will he co-operate with the EU and repatriate those prisoners?
Mr Blunt
Unfortunately for my hon. Friend, I am afraid that that agreement does not come into force until December 2011. I note that the Irish apparently have an opt-out on it and that it will take five years for the Poles to make it fully applicable, but with those exceptions aside, I assure him that we will implement that agreement absolutely as soon as it comes into force.
Fiona Mactaggart (Slough) (Lab)
Does the Secretary of State agree with the retiring chief inspector of prisons Dame Anne Owers that a reason for the reduction in young people coming into the criminal justice system is the effect of Sure Start? If he does agree with her, will he speak to colleagues across the Government about investing in Sure Start, rather than in youth jails, because it is cheaper and works better?
Mr Kenneth Clarke
We are, of course, having to address Sure Start, as with every other programme, in the light of the resources—or rather lack of them—that we have inherited as a result of the economic situation, but the Government are concentrating Sure Start on its original priority purpose, which was particularly to target areas of deprivation and social difficulty. That part of Sure Start’s work does indeed have some relevance to what we have been talking about in our exchanges on youth justice and how to keep people out of criminality in their youth.
Mark Menzies (Fylde) (Con)
T8. Will the Minister pay tribute to Winston Churchill, who, exactly 100 years ago today, as Home Secretary, commented:“The mood and temper of the public in regard to the treatment of crime and criminals is one of the most unfailing tests of the civilisation of any country.”?
Mr Blunt
I am grateful to my hon. Friend. Of course, it is a delight to offer a tribute to the greatest parliamentarian of the 20th century. Right hon. and hon. Members should note that today is precisely the 100th anniversary of one of the great speeches on prison reform, given by Winston Churchill while he was in his Liberal phase. I am delighted that I will mark that anniversary by speaking to the National Association for the Care and Resettlement of Offenders. I am sure, Mr Speaker, that you will allow me to use the final phrase of that speech 100 years ago, when Churchill said:
“an unfaltering faith that there is a treasure, if you can only find it, in the heart of every man—these are the symbols which in the treatment of crime and criminals mark and measure the stored-up strength of a nation, and are the sign and proof of the living virtue in it.”—[Official Report, 20 July 1910; Vol. 19, c. 1354.]
Those are measures that we will live up to.
Mr Speaker
We are very grateful, but I think that it sounded a bit better from Churchill.
Chris Bryant (Rhondda) (Lab)
And I should say that the people of the Rhondda remember Churchill’s period in relation to the Tonypandy riots. However, the Lord Chancellor has responsibility for marriage law, and he will know that the law forbids civil weddings from including religious readings or music, even though many people who are not able to get married in church or who do not want to do so would like to have such readings. The Government say that they will allow that for civil partnerships, but not for civil weddings. Can we not have a little more equality for heterosexuals?
The Minister of State, Ministry of Justice (Nick Herbert)
I am answering this question because I am the only one in the village. [Laughter.] I apologise to the hon. Gentleman for the fact that his question was transferred. The Equality Act 2010 removed the express prohibition on civil partnership registrations taking place on religious premises. In response to that amendment of the law, the Government are committed to talking to those with a key interest in how to take this forward. That will include consideration of whether civil partnerships should be allowed to include religious readings, music and symbols, and the implications for marriage will have to be considered as part of that.
Mark Lancaster (Milton Keynes North) (Con)
T10. Can the Minister tell the House whether his Department has undertaken any study of the comparative costs of trials in magistrates courts and Crown courts?
Mr Djanogly
The average daily costs in Crown courts are more than double those of magistrates courts at about £1,700, compared with £800 a day, and Crown court cases take much longer of course. That is why it is imperative that we rebalance cases between magistrates courts, operating at some 64% of capacity, and Crown courts, operating at full capacity, to ensure that we get value for money.
Derek Twigg (Halton) (Lab)
Will the Secretary of State’s Department honour in full, and on the same basis as the previous Government, the release of files relating to the Hillsborough disaster?
Mr Kenneth Clarke
The National Archives and my Department will continue to co-operate with the ongoing work to get the files released, which we hope to be able to facilitate. Our Department will play its part, together with the National Archives, for which we are responsible.
Tom Brake (Carshalton and Wallington) (LD)
On the subject of magistrates courts, will Ministers consider seriously any proposal from magistrates that would have them hearing cases in venues other than courts so that they can continue to deliver local justice locally?
Mr Djanogly
The answer to that is yes, especially in the context of an increased use of technology.
Thomas Docherty (Dunfermline and West Fife) (Lab)
On Sunday evening, Radio 4’s “File on 4” programme made serious allegations about Isle of Man shipping companies’ involvement in sanction-busting shipments of arms to Sudan. Given that the Secretary of State has responsibility for the relationship between the Isle of Man and the UK Government, will he hold urgent discussions with the Isle of Man Chief Minister to ascertain what, if any, truth there is to those allegations?
Mr Kenneth Clarke
I will certainly follow up that matter as I did not hear the “File on 4” programme. Obviously, the Isle of Man has a good, functioning system of justice and we can confidently expect it to enforce criminal law and international sanctions to the standards that we would expect. However, I will ensure that we contact the Isle of Man to ensure that everything that can properly be done is being done to ensure that no breach of international sanctions that could be prevented is being allowed to go ahead.
Duncan Hames (Chippenham) (LD)
In the light of the Government’s review of non-departmental public bodies, what plans does the Justice Secretary have for the future of the Office of the Public Guardian?
Mr Clarke
We are reviewing it, although we have no immediate intentions that we are withholding. We are looking across the whole field of the Department, and we will reduce the number of so-called arm’s length bodies, quangos and agencies. The Office of the Public Guardian carries out quite an important function, however, so I do not think that we will make any changes there unless we are quite confident that its key responsibilities can be properly discharged.
Huw Irranca-Davies (Ogmore) (Lab)
The annual report on Parc prison by the independent monitoring board singled out the work of the Prince’s Trust and the excellent staff in the young persons unit for particular praise, which I am sure that Front Benchers will join me in echoing. Every time that we ask for continued investment in such units—the report said that the unit needed more investment—we hear that there is no money, so if the Secretary of State is going to use that excuse, how will the big society ensure that we have less reoffending when these young people come out of jail?
Mr Clarke
We will produce positive policies on criminal justice, prison reform and the rehabilitation of offenders, but we have to do that on the basis of a realistic appraisal of the current state of the economy. We have inherited the worst financial and fiscal crisis of modern times. We have succeeded a Government who simply borrowed ever more money and who threw money at every problem, often with a considerable lack of success for public protection. I endorse what the hon. Gentleman says about the work of the Prince’s Trust and others throughout our Prison Service, but he will have to find a positive contribution to policy making, rather than saying just, “Let’s borrow and spend more public money,” because that is ruled out for the immediate future.
Proposed redevelopment of Rushden Hospital site (Northamptonshire)
Mr Peter Bone (Wellingborough) (Con)
Good morning, Mr Speaker. I am delighted, at just after half-past midnight, to present this petition from the residents of Rushden in Northamptonshire and the surrounding areas, which concerns the redevelopment of a hospital site. Some 25% of the people in Rushden petitioned me to have an NHS facility on that site, but the local NHS has decided to put houses on it.
The petition states:
To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
The Humble Petition of residents of Rushden, Northamptonshire and the surrounding areas,
Sheweth that the proposed redevelopment of the Rushden Hospital site for housing is unpopular, ill-advised and detrimental to the residents of Rushden; that over 25% of the residents of Rushden petitioned the House of Commons for a new outpatient facility in the town, the majority wanting the new facility on the Rushden hospital site; that the proposal to build housing on the site instead of an NHS facility is unacceptable and the impact on the surrounding roads of a large housing development and the density of the development and the proposed cut-through to the Greenacre Drive Estate is wholly detrimental to local residents.
Wherefore your Petitioners pray that your Honourable House urges the Secretary of State for Communities and Local Government to urge the Department of Health to withdraw the planning application and further urges him to request that the District Council of East Northamptonshire and the County Council and the Primary Care Trust work together to provide a suitable health facility on the site.
And your Petitioners, as in duty bound, will ever pray, etc.
[P000844]
World Education
Mr John Leech (Manchester, Withington) (LD)
I would like to submit a petition on behalf of hundreds of the children, parents and friends of Cavendish primary school in West Didsbury in my constituency. They have signed a petition in support of the 1GOAL Send My Friend to School campaign, which calls on world leaders to ensure that all children around the world will have a primary school education by 2015. I suspect that this is the first time that a petition has been submitted on the Floor of the House in the form of a scarf.
The petition states:
The Petition of the constituents of Manchester Withington and others,
Declares that world leaders have promised that all children will have a primary education by 2015, but with only five years left to go there are still 72 million children missing out on an education completely.
The Petitioners therefore request the House of Commons to urge the Government to act quickly and decisively to ensure that the goal of all children obtaining a primary education by 2015 is indeed obtained.
And your Petitioners, as in duty bound, will ever pray.
[P000845]
Office of Tax Simplification
(13 years, 9 months ago)
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Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on the structure and approach of the Office of Tax Simplification.
The Exchequer Secretary to the Treasury (Mr David Gauke)
I am grateful for the opportunity to update the House on the establishment of the Office of Tax Simplification, further to the written ministerial statement that I laid before the House this morning.
The need for simplification in the UK tax system is clear. The quality of our tax law is a major determinant of our economic competitiveness. A complex tax system creates uncertainty and instability, which sends the wrong signal to international businesses looking to invest in the UK and so damages our economic growth. A complex tax system also means that businesses end up spending more time dealing with their tax affairs and less time on their core business. That can be particularly burdensome for smaller businesses.
We set out our proposed approach for reforming the tax policy-making process in a discussion document that was published alongside the Budget last month, but as well as reforming the way in which we develop new tax law, there is also significant work to be done to correct the mistakes of the past by reducing the complexity in the British tax system. That is where the Office of Tax Simplification comes into play.
In his Budget statement of 22 June, my right hon. Friend the Chancellor confirmed our plans to establish the Office of Tax Simplification. Today, we have done so. The OTS will advise Treasury Ministers on delivering a simpler tax system, drawing together expertise from throughout the tax and legal professions as well as from business and other interested parties, to provide advice on options for addressing existing complexity in the tax system. Its objective will be to reduce the burden of compliance for both businesses and individuals. The OTS will do that by advising the Government on where, in its expert view, the tax system is too complex and could be simplified, and by conducting inquiries into complex areas of the tax system, gathering evidence and suggesting options for reform.
The office will publish a report on each of its inquiries, detailing the evidence that it has collected, the views of interested parties, its analysis of potential reform options and proposals for simplifications. Either the Chancellor or I will discuss the findings of each report with members of the OTS board. The first such inquiry will be a review of all reliefs in the tax system. The OTS will review the full list of reliefs and identify those that should be repealed or simplified to create a simpler tax system. The second review will focus on simplifying the tax system for small businesses and the specific question of finding a simpler alternative to IR35.
The OTS will be led by an externally appointed and unpaid chairman and tax director, who will be supported in undertaking their duties by a secretariat of civil servants and private sector secondees. The chairman and the tax director will have complete control over forming the OTS’s judgments and will be accountable to Parliament for their advice. Michael Jack will be the interim chairman, and John Whiting has agreed to be the interim tax director. Together they will lead the establishment of the OTS and the reviews that it conducts in its first year. Over the summer, John Whiting will lead the appointment of the permanent secretariat, so that the first reviews can begin by early September. He will also establish committees over the summer to steer the OTS’s work and ensure close consultation with all interested parties. The committees will include experts from the tax and legal professions, the business community and other interested parties.
Making the right reforms to the tax system will help to pave the way for bringing more international business to the UK, which will give our economy the boost that it so urgently needs in the years ahead. We commend the creation of this body.
Mr Byrne
I am grateful to the hon. Gentleman for his statement. He will hear this afternoon that there is wide-ranging interest in the questions that he has raised, which is why it was all the more unacceptable that the statement was delivered at a press conference before it was made to Members. That, I am afraid, is becoming a pattern of behaviour. First, £6 billion of spending cuts were announced in the Treasury courtyard rather than in the Palace of Westminster. Then the approach to the spending review was announced in a press conference, not in this Chamber. Then reforms to the institutional arrangements for bank regulation were briefed to newspapers before the House was told. Then plans for a bank levy were outlined in a speech in the City, not from the Treasury Bench. If we wanted a timely reminder of the importance of the first debate to be held on business nominated by the Backbench Business Committee—on information relating to statements—the hon. Gentleman has just given us one.
Let me turn to the substance of the hon. Gentleman’s announcement. From all parts of the House this afternoon he will hear an endorsement of the principles of a simpler tax system that allows people to focus on their business affairs and profitability. He will see, too, an endorsement of the use of outside experts; that is nothing novel. But will he confirm the answers to a couple of questions about the office’s scope? If he is all for simplification, will the Office of Tax Simplification be advising him on his proposals to complicate the tax system by introducing a marriage tax allowance, all for the sake of sending an ineffective £3-a-week signal about his party’s views on what a family should look like? Will the office be advising the Chancellor either to advance or to drop those plans, and if so, on what timetable?
Can the hon. Gentleman tell us whether the Office of Tax Simplification will be advising him on dropping the measures announced in the Budget to increase the number of people facing marginal deduction rates of more than 90%? And if he is all for simplicity, why is the Treasury briefing that it wants a more complicated stamp duty system in connection with energy conservation in housing?
Secondly, there are a series of questions to be asked about the nature of the new beast that the hon. Gentleman has told us about this afternoon. We have heard a lot of talk in recent weeks about the Chancellor’s push for a bonfire of the quangos. Can the Minister tell us how much the new office will cost? Can he promise us that this is the last quango that the Treasury will announce this year? Can he tell the House how Mr Jack was appointed, and whether his appointment is fully in line with Nolan principles? What reassurances can the hon. Gentleman give the House this afternoon that, unlike the Office for Budget Responsibility, the Chancellor’s last independent creation, this office will not release its reports to help the Prime Minister get through a sticky Prime Minister’s Question Time?
Simplification is a good thing, and I am sure that the whole House will welcome the thrust of the hon. Gentleman’s proposals. But I am afraid that today’s announcement sounds rather more like an attempt to grab headlines than like real evidence of a push to improve legislation—legislation that is the responsibility of this House.
Mr Gauke
I do not know whether the right hon. Gentleman requested an urgent question because he had prepared a speech and had forgotten that this development was announced in the Budget on 22 June. The creation of this organisation was not only in the Conservative party manifesto and the coalition agreement; it was also announced to the House on 22 June by my right hon. Friend the Chancellor. Today we have announced the appointment of two distinguished individuals to perform the task that we have already set out. The misplaced outrage from the right hon. Gentleman is extraordinary, particularly given the record of the previous Government in this regard.
I am pleased that the right hon. Gentleman recognises, at last, the need for a simpler tax system and for outside experts to be involved in the tax system. We think that an important point; we have to make use of the expertise in the tax and legal professions, and the OTS is but one example of how we will do that, along with the creation of a business forum and a tax professional forum. All that will add to the sense of co-operation that exists in our tax system and the sense that the system can become an asset, not a liability—as, sadly, it had become under our predecessors.
The purpose of the OTS is to look at the stock of tax law—the thousands of pages of tax law in this country, which has the longest tax code in the world. It is an attempt to examine the existing tax code to make recommendations for simplification. All decisions will be made by Ministers accountable to the House. Parliament will continue to make tax law, but clearly the use of independent experts and publication of their recommendations and analyses will be a useful addition to our tax system.
The right hon. Gentleman asked about the appointment process. These are interim appointments; we believed that it was important to establish the OTS quickly. The appointments will be there for 12 months, at which point we will go through the usual process of appointment for permanent appointees. In that 12-month period Mr Whiting and Mr Jack will add a great deal to our tax system, will establish the OTS—[Interruption.] In spite of that attack on the appointees, John Whiting, for example, has advised Opposition parties, including the Labour party in the past few weeks. These are well-established individuals. Michael Jack was a distinguished Minister in this area, who established the tax law rewrite project, and we think that that is useful experience.
As for the cost, I know that the view of the Labour party in government is that quangos must always cost a great deal of money—but Mr Jack and Mr Whiting are not being paid for this. The cost of the secretariat will be paid out of existing Treasury and Her Majesty’s Revenue and Customs budgets. This is good value for money, it will be a good contribution to our tax system, and we are very proud to announce it.
Mr Speaker
Order. The opening contributions of the Minister and the shadow Chief Secretary were a little on the long side. Many people want to take part. What I require is brevity—a textbook example of which can now be provided by the Chairman of the Treasury Committee, Mr Andrew Tyrie.
Mr Andrew Tyrie (Chichester) (Con)
I am not so sure about that, Mr Speaker.
I warmly welcome anything that simplifies the tax system; I think we all do. The Chancellor described the new office as a
“a permanent force for a simpler tax system”,
but he has appointed it initially for only one Parliament. Can the Minister explain why? What is to be the annual budget of the office’s permanent staff, and will permanent appointments be subject to scrutiny by the Treasury Committee?
Mr Gauke
On the appointment process, we will see how we go. We are keen that the OTS should be accountable to Parliament, and I dare say that it will give evidence to my hon. Friend’s Committee. As for the cost, as I said a moment ago, the intention is that the costs will be borne from the existing budgets of HMRC and the Treasury. There will be secondees from the private sector, and we expect them to fund that at their own cost. As regards longevity, the initial appointments are for 12 months. We have set up the OTS for a Parliament, but I hope that it will be a permanent feature of our tax system.
Barry Gardiner (Brent North) (Lab)
One of the pieces of tax complexity that Treasury officials will be counselling this body to get rid of swiftly is perhaps one of the most important that has recently been introduced—the patent box, which enables intellectual property developed in this country to be domiciled in this country for tax purposes, not domiciled overseas at a great loss to the British taxpayer. Will the Minister ensure that the new body is not bamboozled by Treasury officials who have opposed that measure for far too long, and will continue to try to get rid of it?
Mr Gauke
As I mentioned earlier, the intention of the OTS is to look at the existing stock of tax law, not to examine new proposals for tax law. On the patent box, as we announced in the Budget, the intention is to carry out a consultation on intellectual property and on how the patent box works, how research and development tax credits work, and how the controlled foreign company rules apply in that context. We will be carrying out that consultation in the autumn.
Karen Bradley (Staffordshire Moorlands) (Con)
May I welcome the announcements about the OTS, particularly the appointment of John Whiting—a move that will be very popular in the industry? Does the Minister agree that by simplifying the tax code, the Government are reducing the opportunities for tax avoidance?
Mr Gauke
My hon. Friend makes a good point. The greater the complexity, the greater the opportunities for avoiding tax, and a simpler tax system closes down some of those opportunities. The relationship between avoidance and complexity is itself complex, because avoidance leads to more complexity. As a Government, we take tackling tax avoidance very seriously.
Stewart Hosie (Dundee East) (SNP)
The old tax law rewrite project only managed, in more than a decade, to bring about the Capital Allowances Act 2001, four income tax measures, the Corporation Tax Act 2009, the Corporation Tax Act 2010 and the Taxation (International and Other Provisions) Act 2010. As the Minister expects a report on each of this new body’s inquiries, with an analysis of its reform options and recommendations, all of which might take some time, may I ask him, if he does nothing else, to urge the new Office of Tax Simplification to work rather more swiftly than the old tax law rewrite project was able to?
Mr Gauke
The hon. Gentleman rightly makes the point that tax law is a complicated matter, and such matters are not addressed easily and simply, but we believe that we have appointed the right individuals, and that there is engagement by the tax professions. We believe that the tax law rewrite project had many commendable features, but it was very restricted. It focused merely on wording, and we want an independent body to consider policy recommendations to see how we can improve our tax system.
Claire Perry (Devizes) (Con)
Does the Minister agree that this is a very long overdue initiative, with two aspects that we would never have heard about from the Opposition—a focus on simplicity, and the idea that things can be done without the benefit of an overpaid quango?
Mr George Mudie (Leeds East) (Lab)
To prove to the House the independence of the Office for Budget Responsibility, the Chancellor finally conceded that the appointment of its chair would be subject to the agreement of the Treasury Committee. If the so-called independent OTS is actually to be so, will the same arrangements be considered for the appointment of its chair?
Mr Gauke
We have not taken a view on that yet. We have to understand what the role of the OTS will be—to publish recommendations that will be, by necessity, in the public domain. People can debate those matters, which we think is a valuable purpose in itself. Whether the Treasury Committee needs to endorse every appointment made by the Government is a debate that we should have.
Matthew Hancock (West Suffolk) (Con)
Is the Minister aware that one tax expert has described the “Gauke doctrine” as one of the most important changes in improving the competitiveness of our tax system—so long as it is delivered properly? Will he assure me that the Government will work to ensure that what has been put down on paper in the Budget will be delivered properly over this Parliament?
Mr Gauke
I am grateful to whichever tax expert identified the Gauke doctrine: my hon. Friend is right about so many things, because this is a question of following things through. We have set out some very good intentions and made a great deal of progress in our first few weeks, in demonstrating how the UK tax system can be an asset, but it is our responsibility as a Government to ensure that we follow through and build on what I believe have been some early successes.
Ian Lucas (Wrexham) (Lab)
The hon. Gentleman referred to the new body as being accountable to the House. If he has considered that idea closely, can he tell us precisely how it will be achieved?
Mr Gauke
We certainly anticipate that the Treasury Committee will want to take evidence from the tax director and the chairman, and that documents and recommendations produced by the OTS will be available to Members. I dare say that those recommendations will inform our debates on Finance Bills and, if it is possible, raise the quality of debate.
Margot James (Stourbridge) (Con)
By how much did the tax code lengthen under the previous Government? I understand that its length is now a record in the western world.
Clive Efford (Eltham) (Lab)
Any reduction in the burden on small businesses, or indeed any businesses, of administration costs in paying tax is to be welcomed. However, can the Minister say whether, as a result of simplification of the tax system, he expects to raise more tax or less?
Mr Gauke
I am grateful to the hon. Gentleman for welcoming these measures. The intention is that the OTS will be neither a tax-raising nor a tax-cutting body but a tax simplification body. It will make recommendations, and our approach, wherever possible, is to broaden the base and lower the rate. If, for example, there are recommendations that reliefs should be withdrawn, we anticipate that the money saved could be recycled into tax cuts elsewhere. The OTS should not be seen as anything other than revenue-neutral.
Richard Harrington (Watford) (Con)
I thank the Exchequer Secretary for this initiative on behalf of businesses small and large in Watford and elsewhere—but not on behalf of the tax accountants, who have not contacted me to say how happy they are. Does he agree that measures such as this, when the public and small businesses find things simpler, are very much to the advantage both of them, and of the Exchequer purse?
Mark Durkan (Foyle) (SDLP)
For how long will we have to watch this space to see an end to the quicksand of complexity that is IR35? Will the experts appointed to assist the OTS include people who understand the difficulties caused for families and firms who work and live on a cross-border basis in Northern Ireland? Those people are caught in an utter matrix of tax complications.
Mr Mark Spencer (Sherwood) (Con)
Does the Minister agree that a more simplified tax system will encourage UK manufacturers to retain jobs here rather than export them to other countries? Does he also agree that the measure will make the UK look more favourable as somewhere for global companies to locate their business?
Mr Gauke
My hon. Friend is absolutely right. As I said, we want to ensure that our tax system is an asset to the UK, so that we can go out there and sell the UK as a place to do business. We want one advantage of doing business in the UK to be a certain, stable, predictable and simple tax system.
Kate Green (Stretford and Urmston) (Lab)
When simplification is in conflict with fairness, which will prevail?
Mr Gauke
All policy decisions will be for the House and Ministers. The hon. Lady makes the fair point that one cannot take politics entirely out of the tax system, but there are times when it is simply a question of complexity versus simplicity. There is scope for improvement, which is what I hope the OTS will be able to deliver.
Charlie Elphicke (Dover) (Con)
Will the Minister make a special effort to simplify tax legislation so that it is understandable for ordinary people? As a former tax lawyer—a poacher turned gamekeeper—I know that too often, the best advice is the preserve of the richest. That is not fair.
Mr Gauke
My hon. Friend, too, makes a good point. On the day of the Budget we published our document “Tax policy making: a new approach”, which set out a more consultative and deliberative approach to tax law, ensuring that draft legislation is properly examined. We think that that is to the advantage of all people; greater clarity in tax law is clearly helpful.
Toby Perkins (Chesterfield) (Lab)
Will the Minister confirm that the two appointees will not get any expenses or salary? Will he refer the appointments to the Committee on Standards in Public Life?
Mr Gauke
The appointees will not be paid. If they incur proper expenses, they will be reimbursed, as is only reasonable—[Interruption.] I would have thought all Members of the House would appreciate that. Ultimately, the appointments will be in accordance with the relevant provisions, but we believed it important to set the OTS up quickly. We have done that, and with two excellent individuals.
Harriett Baldwin (West Worcestershire) (Con)
If those two excellent individuals are to work for an initial period of 12 months, will that be enough time for them to read the 11,000 pages of tax code applied by the previous Government?
Chris Leslie (Nottingham East) (Lab/Co-op)
Many hon. Members have made points about fairness. Will the Minister ensure that the OTS will not simply dance to the tune of the wealthiest in society, and their accountants, in putting issues on the agenda? I refer to the decision in the Budget to reduce the backdating of new claims and changes of circumstance for tax credits from three months to one month, at a cost of £1 billion to ordinary people. Is it not the case that this Government are more interested in helping the wealthiest and putting obstacles in the way of the least well-paid?
Mr Gauke
I really do not accept the point that having a simpler tax system, which is understandable by everyone and not just those who can afford expensive advice, is in any way a regressive step. As my hon. Friend the Member for Dover (Charlie Elphicke) said, it will benefit everybody and we are pleased to be able to do it.
Sajid Javid (Bromsgrove) (Con)
Does the Minister agree that along with the cancellation of Labour’s jobs tax and the reduction in corporation tax that his team has proposed, this will also help to re-open Britain for business?
Emma Reynolds (Wolverhampton North East) (Lab)
It is ironic that the new Government’s anti-quango approach seems to be translating into setting up more quangos. Apart from grabbing headlines, why cannot the functions of this new office be carried out within the Treasury and, therefore, be directly accountable to Parliament?
Mr Gauke
Some months ago my right hon. Friend the Prime Minister made a speech identifying those areas in which quangos would be an advantage, and one of those was the ability to provide independent advice in a technical area. This is one of those areas, and we believe that engaging with outside bodies and making use of outside expert advice will actually benefit the creation of good tax law and improve our tax system. This policy is not about grabbing headlines, but improving our tax system because that is what we want to do. We will leave the headline grabbing and the sudden announcements to our predecessors.
James Wharton (Stockton South) (Con)
I welcome the statement by my hon. Friend. Does he agree that it is striking that the independent experts who will lend their expertise to the OTS are doing so without being paid, and does that not contrast starkly with the millions spent on ineffective quangos by Labour?
Mr Gauke
We are very grateful to Mr Whiting and Mr Jack for giving up their time for free in an attempt to improve our tax system and provide a public service. They deserve thanks from both sides of the House, and it is a pity that there has been a little sniping from one or two Opposition Members.
Amber Rudd (Hastings and Rye) (Con)
Is the Minister aware that in Hastings we have some very successful business groups? They often complain to me about the over-regulation and complexity of the system. If we are to achieve the necessary growth, we need to allow them to expand their businesses. Can he assure me that this office will focus especially on those small and medium enterprises that will provide the growth that this country needs?
Mr Gauke
My hon. Friend is right to raise that point. Of the two reports that the office will produce initially, one will focus on taxation for small businesses and the problems with IR35. We believe that this organisation will be able to address that difficult issue, which frankly has not been dealt with satisfactorily in recent years.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I welcome the response to the urgent question today. As a former finance director, I will join many others in celebrating this simplification agenda, so that instead of spending time thinking about tax they can think about business growth. In particular, can my hon. Friend assure me that the office will also cover the subject of VAT which is as complex as corporation tax and others?
Mr Peter Bone (Wellingborough) (Con)
The spat at the beginning of the urgent question about whether the written statement was first leaked to the press raised the blood pressure of the shadow Minister. Would the Minister encourage all Back Benchers—indeed, all Ministers—to come along to the first Back-Bench business debate scheduled for later this evening on the very topic of information on statements for Back Benchers?
Mr Speaker
Order. I know that the Minister will relate his answer to attempts to simplify the tax system.
Paul Uppal (Wolverhampton South West) (Con)
I welcome today’s initiative. Will the Office of Tax Simplification have a remit specifically to look at tax bands, particularly to make the UK more competitive? The corporation tax band between the small rate, the marginal rate and the large rate contains a slight anomaly.
Mr Gauke
Yes, the OTS could consider such matters. Essentially, rates will not be matters of complexity and will be entirely for the House to consider. However, the point that my hon. Friend highlights is one that the OTS might well be looking at in its small business review.
Alun Cairns (Vale of Glamorgan) (Con)
I am grateful to the Exchequer Secretary for his statement. Will the OTS receive representations from business organisations and individuals who can make a contribution to simplifying the tax structure?
Mr Gauke
We will certainly encourage the OTS to take representations. Mr Whiting and Mr Jack are keen to do so and will be establishing consultative committees to provide organisations and businesses with an opportunity to have their say and more generally to engage with businesses. We believe that, in the tax area in particular, it is important that we engage with business. That has been a characteristic of this Government, and we hope to continue to do that.
Chris Kelly (Dudley South) (Con)
I welcome the Exchequer Secretary’s statement. Does he agree that tax simplification will lead to greater business confidence in small and medium-sized businesses, such as those in my constituency of Dudley South, which will lead to the confidence to make greater plans to create more jobs?
Mr Gauke
My hon. Friend is absolutely right. That is at the heart of what this is about. A strong tax system can encourage strong growth in the private sector, which can encourage the growth we need to tackle our deficit, and I hope that the OTS will make a useful contribution to that.
Points of Order
Mr Gordon Marsden (Blackpool South) (Lab)
On a point of order, Mr Speaker. Last week, on 15 July, in Department for Communities and Local Government questions, in reply to a question about the future of the Government office for the north-west, the Secretary of State said:
“We are currently discussing this with interested parties, including the trade unions.”—[Official Report, 15 July 2010; Vol. 513, c. 1076.]
However, in a letter he sent nine days earlier to the Deputy Prime Minister, dated 6 July, he said that his colleague, the Minister of State, Department for Communities and Local Government, the right hon. Member for Tunbridge Wells (Greg Clark), and himself had met formally to discuss the abolition and proposed
“to move to an early announcement of the abolition of the remaining eight offices.”
Mr Speaker, is it in order for the Secretary of State to say one thing in the House about continued open discussions when he has already written elsewhere about it being a done deal?
Mr Speaker
I am grateful to the hon. Gentleman for his point of order and for giving me advance notice of it.
Mr Pat McFadden (Wolverhampton South East) (Lab)
On a point of order, Mr Speaker.
Mr Speaker
I shall come to the right hon. Gentleman in a moment.
I have not been informed that a Minister wishes to make a statement in the House today on this subject. However, on the wider issues, there is an opportunity later today—this point was flagged up by the hon. Member for Wellingborough (Mr Bone)—in the Back-Bench business debate for the hon. Member for Blackpool South (Mr Marsden) and others to express their concerns about the matter. I have a feeling that some of them might be tempted to take that opportunity.
Mr McFadden
On a point of order, Mr Speaker. Can you give us your guidance on the appropriate procedures for a Minister to come to the House and correct factually inaccurate statements made in the Chamber? On 22 June, the Deputy Prime Minister told the House that the reason the Sheffield Forgemasters loan was not approved was that the company’s owners
“did not want to dilute their own shareholdings in the company”.—[Official Report, 22 June 2010; Vol. 512, c. 148.]
On 1 July, the Prime Minister repeated the point, saying that
“there was opportunity for them…to get more equity into the business if they wanted to…dilute their own shareholding”.
Yet this morning’s newspapers reveal that, in a letter to the company’s chief executive on 2 July, the Deputy Prime Minister said:
“You explained to me the composition of equity holdings in the company including your own stake and made clear your own willingness to dilute your equity share”.
Mr Speaker, this letter clearly contradicts statements made by the Deputy Prime Minister and the Prime Minister to the House, and I am sure that you will agree with me that it cannot be right for factually inaccurate statements to be made publicly in the House and then corrected purely by means of a private letter. Given that today the company has announced that it is suspending work on the 15,000 tonne project for which the loan was proposed, what is your advice on when it would be appropriate for the Deputy Prime Minister to come to the House and admit publicly that the Government’s justification for this decision has been admitted by him to be wrong?
Mr Speaker
I thank the right hon. Gentleman for his point of order. As he knows, and as others will be conscious, I am not responsible for the content—including the accuracy—of statements by Ministers. That said, if a Minister makes a factual error in a statement to the House, it is preferable, as far as I am concerned, that he or she should correct that error in the House. The right hon. Gentleman has taken the opportunity very forcefully to register his point on the record, and it will have been heard by those on the Treasury Bench. I do hope that if such instances arise again, the general guidance that I have just offered will be followed, for the simple reason that it makes sense and is fair.
Mr David Winnick (Walsall North) (Lab)
On a point of order, Mr Speaker. We all appreciate what you have just said, but I should like to raise another issue. I received replies on the board yesterday from the Independent Parliamentary Standards Authority to a number of my questions. I shall not go into that, but the replies included a background note. That is quite a novelty, as you will know—it has certainly never happened previously, in all my experience over the years of receiving answers to parliamentary questions. I was given one answer along with a background note, which says:
“Mr Winnick has asked several other questions of IPSA,”
about whether it should do this, that or the other, and the same applied with another answer. I do not mind—presumably the background note is saying, in effect, that I am a nuisance and that IPSA wishes that I would go away—but what I want to know is whether supplying a background note will become standard practice for Ministers. Indeed, I would like to see the background notes provided by civil servants to Ministers who are due to answer my questions, so perhaps on this occasion IPSA should be congratulated on setting a commendable trend.
Mr Speaker
I am grateful to the hon. Gentleman for what is, pretty much, a novel point of order. Whether those who penned the background note ever intended it to be seen by him is something that I rather doubt. I do not think that the Speaker should get into the business of dictating the precise form of answers to questions. However, in general terms, I am inclined to say that the answer should be the answer, and that should be all that is required. The idea that some supplementary text is either required or desirable seems to me to be wrong.
Mr George Mudie (Leeds East) (Lab)
Further to the point of order raised by my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), Mr Speaker. I listened with gratitude to the answer that you gave my colleague, the shadow Minister, on Sheffield Forgemasters, but the gist that I caught was about those on the Treasury Bench conveying your sentiments, so that such things would not happen on future occasions. Would it not be appropriate to ask those on the Treasury Bench to convey that message to the Deputy Prime Minister, so that he can come to this House and right the matter, rather than—so it appears—being left in the clear, with only future transgressors affected?
Mr Speaker
That is a sophisticated point of order, which is what I suppose one would expect from someone who has served for a long time in the Whips Office. On the whole, it is not a good idea for me to get into the business of advising on the means of transmission of pieces of information or advice from one part of Government to another. That said, the hon. Gentleman has made his point, and perhaps it will be heard and heeded by people on the Treasury Bench.
Barry Gardiner (Brent North) (Lab)
On a point of order, Mr Speaker. In outlining the benefits of the Office of Tax Simplification, the Exchequer Secretary to the Treasury explained that tax simplification would result in greater revenues to the Treasury. However, in answer to my hon. Friend the Member for Eltham (Clive Efford), he said that the effects of simpler taxation would be revenue-neutral. Given that the Minister is still in his place, would it be in order to ask him to reconcile those two positions?
Mr Speaker
Unfortunately the hon. Gentleman spoilt it a bit, as he was not able to keep a straight face towards the end of his attempted point of order, for the simple reason that he knows perfectly well that he was simply seeking to continue the debate.
I am conscious that we will shortly—not just yet, but shortly—have a ten-minute rule motion. The hon. Member for Southend West (Mr Amess) is waiting patiently—as, to be fair, is the Minister on the Front Bench—and we need to get on to that business before too long.
Kate Green (Stretford and Urmston) (Lab)
On a point of order, Mr Speaker. I will be brief. It was drawn to my attention this week that the Chancellor of the Exchequer visited my constituency—a matter of which I was not made previously aware. In order to be able to welcome senior members of the Government properly to my constituency in future, will you clarify for me your guidance, Mr Speaker, on such ministerial visits and what local Members should be made aware of?
Mr Speaker
The short answer to the hon. Lady is that if the Minister was undertaking an official visit—that is to say, on public ministerial business—the hon. Lady should have been informed by the Minister before that visit took place, preferably with reasonable notice. That is the answer.
bill presented
parliamentary Standards (Amendment) Bill
Presentation and First Reading (Standing Order No. 57)
Adam Afriyie presented a Bill to amend the Parliamentary Standards Act 2009 to require the Independent Parliamentary Standards Authority to reduce the cost and change the schemes of payment of Members of the House of Commons; and for connected purposes.
Bill read the First time; to be read a Second time on Friday 22 October, and to be printed (Bill 60).
Safety of Medicines
Mr David Amess (Southend West) (Con)
I beg to move,
That leave be given to bring in a Bill to make provision about methods of testing the safety of medicines; and for connected purposes.
Hypochondria is not an attractive condition in anyone, but someone who is genuinely ill may be prescribed medicine and may benefit from it. I say to the Minister of State, Department of Health, my hon. Friend the Member for Chelmsford (Mr Burns) that I very much hope this ten-minute Bill will become law.
The development of medicines has helped millions of people to lead longer and more active lives. Medicines, however, are not risk free. Regrettably, there has been an increasing level of adverse drug reactions, which is obviously unacceptable. Action needs to be taken to improve the safety of medicines as far as possible.
Extrapolating from a number of studies the number of hospital admissions due to adverse drug reactions indicates, quite shockingly, that around a million Britons are hospitalised by prescription medicines every year, costing the NHS £2 billion. This is a figure the public purse can ill afford, and does not take into account, even in purely financial terms, the wider cost to society, such as the burden of lost productivity. It is true that some level of risk cannot yet be avoided, but the question I want to pose is whether it would be better to test medicines for safety differently, before they are released to the general public.
In 2005, the Health Committee—of which I was a member, as was the Minister of State—recommended that a public inquiry should be conducted every time a drug is withdrawn on health grounds to determine whether sufficient testing of the drug took place before its introduction into the market. It is a recommendation that has yet to be implemented.
So how are medicines tested for safety and what constitutes sufficient testing? The final stage of this lengthy process is human clinical trials, and several actions are necessary to improve their quality, including ensuring that the range of participants more broadly reflects the population the drug is intended to treat. For example, many drugs for the elderly are never tested on the elderly, and women are massively under-represented in clinical trials, meaning that the evidence base for their treatment is of lower quality than it is for men.
Before new medicines reach clinical trials, the Government require that they are tested for safety on animals, and it is these tests that are the subject of the Bill. Animal testing is, I believe, ethically problematic and many people feel strongly, as I do, that there is an ethical imperative to switch to non-animal methods—but that is not the reason for this Bill. The reason for it is that animal tests have let us down badly in their role of protecting us against dangerous drugs.
Painkiller Vioxx, withdrawn in 2004, was the biggest drug disaster in history, killing more than 100,000 people worldwide in its five years on the market. Clinical trials of Vioxx did, in fact, reveal up to a fivefold increase in the risk of a serious reaction, such as heart attack, heart failure or stroke. However, tests on animals indicated that the drug was safe, and some animal studies even found that it was protective to the heart, which supported the manufacturer’s decision to market it.
In March 2006, six young men taking part in a clinical trial at Northwick Park hospital were nearly killed by a drug which had been tested in monkeys and shown to be safe, even at 500 times the dose that the men were given. Clearly the results from the monkeys had created a false sense of security. More comprehensive studies using human blood samples before the trial might have averted that terrible disaster. Since the infamous trial, several simple tests using human cells have been developed which can predict such dramatic reactions.
Those two examples are not isolated incidents. In fact, nine out of 10 new drugs that pass animal tests go on to fail in human clinical trials, either because they do not work on humans although they did work on animals, or because they are not safe when used on humans as they were apparently safe when used on animals.
The pharmaceutical industry needs new mechanisms. Many new technologies have been developed in recent years: for instance, a wide range of techniques using human tissues—including the interconnection of several different tissues to mimic the whole body in miniature—human DNA chips, computer modelling, and exciting new methods of testing minuscule, safe doses of new drugs in volunteers. A combination of those approaches promises to predict the effects of new drugs on humans more accurately than tests on animals ever could, with the bonus of significant savings in time and cost. It is astonishing that the regulations have not moved on in 42 years, especially given the way in which science has been revolutionised during that time.
Animal tests have never been compared with a set of those promising new technologies. My cross-party Bill calls for exactly that comparison to be conducted. A sample of drugs that turned out to have serious safety problems when they reached clinical trials, or reached the public market, will be tested. The tests will employ a set of those techniques, with their focus on human biology. The results will be compared with the existing results from the animal tests that were conducted before the drugs entered clinical trials. Thus no new human trials or animal tests will be needed. The process will reveal which set of tests is more successful at predicting the safety of medicines in humans.
The proposals that I have outlined have attracted a high level of support among scientists and in the House in previous Sessions. Early-day motions have been signed by as many as 250 Members, and, more recently, by 243 Members. The sheer scale of adverse drug reactions and the fact that they are increasing at twice the rate of prescriptions means that we have an ethical imperative to examine the causes and take action to address this very serious public health crisis. I commend the Bill to the House.
Question put and agreed to.
Ordered,
That Mr David Amess, Mr Peter Bone, Peter Bottomley, Karen Bradley, Jackie Doyle-Price, Paul Flynn, Mr Mike Hancock, Dr Julian Huppert, Caroline Lucas, Grahame M. Morris, Mark Pawsey and Bob Russell present the Bill.
Mr David Amess accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 22 October and to be printed (Bill 59).
Business without Debate
Finance Bill
(13 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
19:19 - The House divided: - Ayes: 322 / Noes: 242 - Question accordingly agreed to.
The Exchequer Secretary to the Treasury (Mr David Gauke)
I beg to move, That the Bill be now read the Third time.
We have enjoyed a lively and wide-ranging debate during the Bill’s progress. I would therefore like to start by thanking all Members who have taken part in the four days of debate on what is a short but significant Bill—despite its brevity, it makes fundamental changes to Britain for the better.
The Bill follows the emergency Budget and puts in place many of the measures that are necessary to strengthen the economy and ensure fiscal discipline. It was a crucial Budget, and this is a crucial Bill because this is the time when we finally get to grips with our deficit. The Bill re-establishes the credibility of the country to the rest of the world. It shows that where tough choices are needed, the Government have the courage to make them, and it provides for a fair and productive society.
The Budget was tough, but it was also fair. It set out a decisive and credible plan to deal with this country’s record deficit and to tackle the other problems that were left behind: a structural deficit £12 billion larger than we had been told; a deficit that was the largest in the G20 and second only to Ireland in the European Union; one in every four pounds of public spending coming from borrowing; an uncompetitive tax environment; and endless complexity and unfairness throughout the tax system. Our plan will pave the way for sustainable private sector-led growth, keep interest rates lower for longer and protect jobs. It is the right approach for the country.
Last week the OECD said in its report on the UK:
“The comprehensive budget announced by the government on 22 June was courageous and appropriate. It was an essential starting point. It signals the commitment to provide the necessary degree of fiscal consolidation over the coming years to bring public finances to a sustainable path, while still supporting the recovery.”
Despite containing only nine substantive clauses, the Bill represents a clear change from the past and a new direction of travel, and it meets the three principles of responsibility, freedom and fairness set out by my right hon. Friend the Chief Secretary on Second Reading.
First, the Bill shows that we are taking responsibility for the problems we inherited, and it follows a Budget more honest, more transparent and more pragmatic than those before it. We have been honest about the scale of the challenge, and we have been honest about the actions needed to take it on. If we are to bring down the deficit without cutting vital public services, raising VAT is unavoidable. We recognise that Members have concerns about that, but for the first time we have published analysis of the distributional impacts of Budget measures. It shows that fairness underpins the tough choices the Government have taken to tackle the deficit.
Andrew George
I am very grateful to the Minister for giving way. He refers to the Budget as being both honest and disciplined. On VAT and the theme of fairness, which he says underpins the Budget, will he ensure that there is an opportunity transparently to review the VAT measurer in clause 3? He has rejected the concept of a sunset clause, but will this be evaluated, as proposed in the Government’s published taxation policy? If it is going to be evaluated, at what stage should it be evaluated and when will the House have an opportunity to analyse it and debate the issue?
Mr Gauke
I am grateful to my hon. Friend for that intervention. As he knows, with this Budget we have set out more distributional analysis than any previous Government have ever done before. On the VAT increase, I say to him that all tax matters are kept under review. He has a fine reputation for finding opportunities to raise particular points in Parliament, and I am sure that he will do so on this matter. I am sure that there will be opportunities for him, and for other hon. and right hon. Members, to raise these matters in future. For the moment we have put in place an increase in the VAT rate. We cannot make any promises to change it, and it would be dangerous for us to do so, given some of the points that we debated in Committee; a promise of a VAT cut in future is likely to result in a deferral of expenditure. However, this is an ongoing debate and I am sure that he will contribute to it fully, just as he has contributed to this debate fully over the past few days.
We believe that this Budget has been demonstrated to be a progressive Budget that deals with the deficit fairly; all sections of society contribute, but the richest pay more than the poorest. I also have to make the point to the House and to my hon. Friend that, of course, we should not look at the VAT increase in isolation, because it is part of a wider package that ensures that the most vulnerable in society are protected. It is also worth making the point that during these days in which we have debated this matter we have learned that support for the VAT increase was more widely spread than we ever realised. With exquisite timing, we learned from Lord Mandelson that the previous Chancellor wanted to raise VAT.
Mr Byrne
Before the hon. Gentleman leaves the subject of VAT, can he clear up one problem that I came across in the Red Book? The scorecard for the Budget says that about £8 billion will be raised in taxes by 2014-15, yet the Office for Budget Responsibility forecast in the back of the Red Book says that only £3 billion in tax will actually come through the door. Why is there a £5 billion difference?
Mr Byrne
The matter can be cleared up very quickly. The scorecard on page 40, with which the hon. Gentleman will be enormously familiar, states that the “total tax policy decisions” will result in £8.230 billion being received in 2014-15, whereas table C12 on page 101, which shows the OBR forecast, says that only £3.1 billion in receipts will actually come in. Why is there a difference between what is on the scorecard, which is a little more than £8 billion, and what is in the OBR forecast for the money that will actually be raised, which is £3 billion?
Mr Gauke
The right hon. Gentleman appears to be raising a perfectly fair point. The OBR was heavily involved in calculating the numbers for the scorecard, so I suspect that there is a perfectly innocent explanation and I will endeavour to ensure that he receives it before this debate reaches its conclusion.
Mr Byrne
Is not the answer very straightforward? Is not the answer that the Budget depresses growth so much that tax receipts will actually be down, so even though the scorecard sets out a series of measures that should, in theory, raise the amount that it sets out, the OBR, understandably, knowing that growth is depressed, has set out that far less money will actually come through?
Mr Gauke
If that is the point that the right hon. Gentleman is getting at, I must point out what the OBR made very clear in the Red Book. That point is that it is misleading to make a straight comparison between the growth figures that were projected on the basis of market expectations of interest rates, which were lower as a consequence of the anticipated fiscal tightening that this Government promised to deliver and that we have delivered, and the forecasts that do not take that into account. That is a point that we have gone over a number of times. The OBR said that such comparisons were potentially misleading, so if that idea is what is driving the right hon. Gentleman’s queries, I must point out to him that the OBR would not accept that.
Matthew Hancock (West Suffolk) (Con)
Is not one explanation the idea that the OBR came forward with growth forecasts that were reasonable and at least had a hope of being accurate rather than the hopelessly over-optimistic growth forecasts put in place by the previous Government?
Mr Gauke
My hon. Friend might well have the answer. One point that we learned from Lord Mandelson in the course of his much-loved memoirs is that the then Chancellor, who is now shadow Chancellor, apparently accused the then Prime Minister of having a “ludicrously over-optimistic” view of what the growth forecasts would be and about
“Britain’s ability to support such a large and expanding deficit.”
That might well be the explanation.
Mr Byrne
I rise with the ambition of being helpful to the Minister as he will not want knowingly or unknowingly to mislead the House. He will know that the OBR forecast on page 101 is a forecast of what tax receipts will come in on the basis of the Budget set out in the Red Book. These things are entirely consistent with each other and the forecast has nothing to do with previous Budgets or previous OBR estimates. Will he confirm that for the House?
Mr Gauke
The fact is that the big risk to growth for this country would have been if we had done nothing about the deficit. If we had tried to ignore it, we would have found ourselves having our credit rating downgraded, as has happened to Greece, Portugal, Spain and now the Republic of Ireland, and we would have faced a contagion of sovereign debt. We have taken the necessary actions to ensure that growth is secure and the fact is that the OBR projections have far greater credibility than the previous Government’s—we have learned about how political they were in making their growth forecasts. Our growth forecasts have credibility. Our public finances have a credibility that they did not before. We can be proud of that.
As we have heard, the previous Treasury team believed that an increase in VAT was necessary and that was only blocked by the previous Prime Minister. One can hope that the previous Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), has seen the error of his ways. I noticed that he did not feature in the Division Lobby opposing the VAT increase—perhaps we have persuaded him, after all, that his views on VAT were unwise. We have succeeded where the shadow Chancellor failed.
We have heard legitimate concerns about how the most vulnerable in society will be protected, but we have sought to provide such protection in the Budget. For example, we have committed to the uprating of the basic state pension through a triple guarantee of earnings prices or 2.5%, whichever is highest, from April 2011. We have taken steps to increase the child tax credit.
Ms Angela Eagle (Wallasey) (Lab)
I thank the hon. Gentleman for his generosity in giving way. On this point about uprating pensions, will he take this opportunity to admit that the shift from the retail prices index to the consumer prices index as the definition for which all benefits and now all pensions will be indexed is scored as plus £6 billion in the Red Book, which means that he is taking that amount of money from some of the most vulnerable and poorest people in the country?
Mr Gauke
We have taken measures to secure the public finances for the longer term, but we have done so by protecting the poorest in society. We have provided a triple guarantee for pensioners and we have finally restored the earnings link that our predecessors did not succeed in restoring in 13 years. In addition, we have taken steps to increase the child tax credit by £150 next year and by £60 in the following year. As a result, levels of child poverty after the Budget will remain unaffected, taking into account all the measures of the next couple of years.
Andrew George
I hate to drag the Minister back to VAT, but he moved on from it very swiftly after the shadow Chief Secretary’s question about the alleged black hole in the finances. Given that there is no, or very little, likelihood of a sunset clause in the Bill or a further evaluation of VAT within this Parliament, will the Minister confirm that each of the zero ratings and exemptions from VAT, as well as the reduced levels of VAT that are available, will be retained and protected? That is very important in order for him to advance his point about the protection for lower-paid people.
Mr Gauke
That is our intention. The Chancellor has made it clear that we have no intention of reconsidering the zero ratings for food or children’s clothes. There are occasional border disputes regarding goods that are zero-rated and those that are fully rated, but on the fundamental question of zero-rating we have made it absolutely clear that we do not intend to revisit those areas. We are also increasing the personal allowance on income tax.
Toby Perkins (Chesterfield) (Lab)
May I drag the Minister back to his point about the VAT rise being part of a package of measures and about the poorest being protected by the Budget when it is taken in the whole rather than just looking at the VAT rise? Will he remind the House what safeguards there are for pensioners or unemployed people who do not have children? What benefits will they gain that will pay for the extra VAT that they are going to pay?
Mr Gauke
Again, I refer the hon. Gentleman to the distributional charts, particularly those that examine these matters on the basis of the expenditure decile, which academics increasingly believe provides a better examination of those who are suffering from material deprivation. That approach demonstrates that the measures are progressive, when taken as a whole, and that the wealthier sectors of society are paying more. The distributional analyses show that the single tax measure that had a regressive effect was the dumping of the 10p rate of income tax that was announced in 2007, which hurt the bottom five deciles and benefited the top five. That does not seem fair, and I am glad that we were not part of the Government who did that.
Chris Leslie
I am grateful to the Minister for giving way. The distributional tables in section A of the Red Book that he mentions are quite interesting, but will he remind us why they extend for only two years? Does he plan to lay any more tables before the House, soon—I do not know whether we could get them before the end of Third Reading—so that we can talk about when the real cuts to benefits and to the poorest people will kick in?
Mr Gauke
The further forward the projections go, the less reliable the information and evidence on existing measures, not to mention the fact that, of course, there will be a number of Budgets between now and then and further policy announcements will be made during that period. Therefore, those projections are unlikely to be particularly accurate or helpful to the House.
Stewart Hosie (Dundee East) (SNP)
The Minister has been telling us about a number of measures that will mitigate the VAT rise, such as changes to the tax system and tax credits, but none of those things is in the Bill. He has not mentioned some of the other cuts not yet announced but promised that are not in the Budget either, not least the huge savings intended to be made in the welfare system. Would he care to give a more rounded picture and tell us what the impact on those who are at the very bottom and wholly dependent on benefits will be when those cuts kick in?
Mr Gauke
This Government have provided greater distributional analysis than any Government have done before. Clearly, in very difficult times, when it is necessary to raise substantial sums and to reduce the deficit very dramatically, we have managed to do so in a way that has spread the pain. It is not the Government’s desire from any great sense of pleasure to be taking tough measures, but that is unavoidable—we cannot ignore it or hide from it—and, yes, there will be pain, but there is no alternative.
Our long-term objective remains to increase the personal allowance to £10,000, as set out in the coalition agreement, and we have made progress in the Bill and the Budget. We are increasing the personal allowance on income tax and taking almost 1 million people—the lowest earning income tax payers—out of income tax altogether. That will also benefit 23 million people who work in Britain by up to £170 a year.
The second matter that the Bill stands for is freedom—freedom for the private sector to grow, unconstrained by uncompetitive tax rates. The Bill will take the first step towards that by cutting the corporation tax rate to 27%, and it will be cut every year until it reaches 24%—the lowest rate of any major western economy, one of the lowest rates in the G7 and the lowest rate that this country has ever known.
Hon. Members were concerned that cutting the main rate would mean that banks did not pay their fair share. Many sectors, including manufacturing, will benefit from the reduction in corporation tax, but we have made it clear that the reforms outlined in the Budget will ensure a greater contribution from the banking sector—one that far outweighs any benefit that they receive from lower corporation tax rates. The banking levy announced in the Budget is a surgical approach reflective of economic risk and intended to encourage banks to move to less risky funding profiles. Banks will pay at least £2 billion more in tax as a consequence of those proposals.
The hon. Member for Nottingham East (Chris Leslie), who has contributed a great deal to the debates on the Bill, was particularly concerned that the banks will be let off for risky behaviour. That is not the case, but I hope he will accept that a targeted approach is the best way forward. Tax competitiveness is good for employers and society as a whole, and the bank levy allows us to be competitive, while ensuring appropriate tax treatment for those activities that pose the greatest risk.
Chris Leslie
I will certainly look closely at the bank levy consultation, but I was looking at the Hansard report of the costs to the Exchequer of the corporation tax giveaway to the banks. It is not just £400 million in the final year, 2014-15; there is also £100 million of lost revenue in 2011-12; £200 million in 2012-13; and £300 million in 2013-14. Cumulatively, over the period of the Budget, there are £1 billion in corporate tax giveaways to the banks. Surely, if there really is no alternative, the hon. Gentleman should think again about that cash-back arrangement.
Mr Gauke
The hon. Gentleman was a Member of the House in the early days of the previous Government, so he knows all about rolling up numbers. I could roll up the numbers for how much will be raised from the bank levy—I do not have the details in front of me, but we would get to about £8 billion—but I am not sure that that is a terribly helpful way of approaching things.
The corporation tax reduction is just one part of the wider package to build a private sector-led recovery. Instead of increasing the small profit rate by 1%, we will cut it to 20% in next year’s Bill, which will benefit some 850,000 companies from April 2011. We are increasing the threshold at which employers start to pay national insurance contributions and have announced a package of support for small businesses. The package will also include a reduction in the writing-down value of plant and machinery allowances to 18% and a reduction in the annual investment allowance to £25,000. That will still provide for allowances that are broadly in line with depreciation, while the annual investment allowance will still cover the annual qualifying expenditure of 95% of businesses. Furthermore, we are reducing the main rate of corporation tax this year and changing allowances in 2012. We are giving companies a timing benefit that will form part of the £13 billion extra that will be invested as a result of the changes.
The third and final area that we are addressing is fairness. Clause 2 increases the rate for capital gains tax for higher rate payers to 28%. That progressive change will substantially reduce the incentive for individuals to disguise their income as a return on capital. It will ensure that the appropriate rate of taxation is paid, which is fair in itself.
Avoidance is a significant issue for the Government and it has been a significant topic throughout the Bill’s passage. It was raised with reference to corporation tax and capital gains tax, and it is the target of clauses 8 and 9, which protect about £200 million of revenue a year. I assure the House that the Government are absolutely committed to tackling avoidance and evasion robustly.
Mr Gauke
If the hon. Gentleman will forgive me, I am keen to press on.
We have inherited plans to limit tax relief on pension savings for the wealthiest. Under the approach in the Finance Act 2010, individuals on the highest incomes who were able to make very large pension contributions could have continued to get pensions tax relief worth up to £51,000 a year. We have concerns about the complexity and fairness of the previous Government’s approach. Given the state of the public finances, we cannot ignore the £4 billion or more of revenue that the policy was set to raise, and as we are committed to protecting the public finances, the alternative needs to raise no less revenue than the existing plans. We are looking at an approach whereby the annual tax relief available will be restricted to less than half that under the previous Government’s plan, which will significantly curtail the ability of the super-rich to benefit from pensions tax relief.
We have touched on annuities. We want to enable people to make more flexible use of their pension savings. We intend to end the obligation to annuitise by the age of 75 from April 2011, and last week we launched a consultation on the details of the change. Before a new system is introduced in next year’s Finance Bill, this Bill puts in place interim measures that will delay such decisions until an individual is 77. That will prevent anyone turning 75 on or after Budget day from being disadvantaged by having to make a decision before the new rules are in place.
The Bill is at the heart of the Budget changes that are necessary for this country’s tax system. Unlike our predecessors, we do not believe that, in a pit of debt, we should still be digging. We do not believe that we can just borrow to pay for front-line services. In the words of the previous Chancellor:
“If we are not credible in what we do and say, people will assume there will be more borrowing or huge tax rises to come.”
Our predecessors failed that test but we are succeeding.
In the words of the shadow Business Secretary, we cannot wish the deficit problem away. The Bill will promote enterprise. It is progressive and responsible, and I commend it to the House.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
I am very grateful for the opportunity to say a few things in conclusion to our debate about the panic Budget that has been sped through this place. To all those who have observed these debates about the Budget and the Finance Bill, it is now clear that the Budget is born not of economic necessity, but of political anxiety—anxiety that, if Liberal Democrat Members are allowed to see any more evidence of the damage that the Budget is doing to confidence and growth, they will remember where they buried their Keynesian tradition, disinter it and refuse the Chancellor their support.
The great question that this Budget and Finance Bill should have answered is how do we lock in the recovery that Labour left? Winning that recovery dominated our final two years of office. Not since 1945 has the world been hit by a recession on the scale of that which hit our shores in 2008. The global economy shrank by some 1% for the first time since the war, G7 economies shrank by some 3% and world trade fell by some 12%. What started as a collapse in confidence on Wall street rapidly infected the world’s financial system and triggered a disastrous domino-like collapse in confidence among markets throughout the world. No country, not least one of the world’s great trading nations, could be isolated from its effect, and we were not.
Kelvin Hopkins
My right hon. Friend referred to the 1940s, when the deficit was massively higher than it is now. Of course, the magnificent Labour Government of 1945-51 grew their way out of problems by keeping full employment and public spending going.
Mr Byrne
Precisely. The Minister could not understand that point from his own Budget, but I shall explain it in more depth in a moment.
On Friday this week, we will be able to test the durability of the recovery that Labour delivered. Almost two years on from the oil price hitting $147 and the collapse of Lehman Brothers, the Office for National Statistics will publish growth figures for the second quarter of 2010, which I am sure all hon. Members await with some interest. But this much we already know. The ONS has told us that our economy has grown by 0.7% since its low point last year; that growth in the first quarter of 2010 was some £8 billion larger than it was in the final quarter of 2009; and that output is growing by about £88 million a day.
The National Institute of Economic and Social Research has also already estimated that output in the second quarter of this year could hit 0.7%. If that comes to pass, it will be no mean achievement, especially when our neighbours tell us precisely how hard it is to sustain recovery. In the first quarter of this year, our last quarter in office, growth in this country reached 0.3%. In Germany, it was lower; in France, it was lower still; in the eurozone, it was lower; and Spain, Ireland and Greece are all forecast to see negative growth this year. Labour is proud to be the party of the recovery, and the question that the Bill should have answered is, how do we guarantee the recovery’s future?
We are proud to have been the party that brought together a global response to the recession. Here in London, countries from throughout the world agreed a plan, including a £1.1 trillion support package, that helped to ensure the revision of global growth from 1.9% last year up to 3.5% this year. We are very proud to be the party that stopped the British banking system collapsing in the face of its exposure to melting international credit systems, and we are very proud to be the party that put in place here at home the most comprehensive recovery plan to protect people’s jobs from the axe, homes from repossession and employers from liquidation.
Sajid Javid (Bromsgrove) (Con)
The right hon. Gentleman quotes ONS statistics, but he will also be aware of how last week the ONS reported that, from peak to trough, the British economy declined by 6.7%—more than any other industrialised economy. Is he also proud of that?
Sajid Javid
I thank the right hon. Gentleman for giving me the opportunity to intervene again. The 6.7% decline was bigger than that of any other industrialised economy; no other economy racked up a debt, both visible and unofficial, at the rate that we did; and no other economy pumped in £200 billion of its own printed money, the results of which we still do not know. He might be proud of the results that he thinks have been achieved, but the full consequences of the Labour party’s actions over the past two or three years are not yet known and may be much worse than we know them to be today.
Mr Byrne
Let us come to that point directly. If we want to understand the difference between our parties, we need only compare the recession that we have been through in the past two years with the one presided over by the Conservative party. Unemployment in this recession is half what it was during the recession of the 1990s. Furthermore, repossessions are 40% lower and company insolvencies are running at about a third of the rate reached in the 1990s recession. We Labour Members believe that it is right to act to protect people’s jobs and homes and the firms that they work in.
Stewart Hosie
Much as I like the shadow Chief Secretary and much as he is doing a sterling job in attacking this new nasty Con-Dem Government, a wee bit of revisionism is going on here. The UK did not lead the way. The fiscal stimulus packages in the United States, France, Japan and even Germany predated the United Kingdom’s. If there were a bit more reality in this, there would be a lot more credibility to the attacks that the right hon. Gentleman is trying to level at the new Government.
Mr Byrne
It would be churlish of the hon. Gentleman not to acknowledge the role that the Labour Government played in bringing the G20 to London and agreeing a £1.1 trillion package of support, as well as the measures on international banking reform. All that ensured that whereas fairly low levels of growth in world trade and world economic improvement were projected last year, we are now looking at a significantly better picture. Surely he will acknowledge that.
Stewart Hosie
I supported fiscal stimulus; I still support fiscal stimulus when it is necessary. The question is not what may or may not have been spun at a G20 meeting, but why the Labour Government left the UK as one of only two G20 countries without a fiscal stimulus package in 2010. I welcome banking regulation, but given that Northern Rock began to collapse in the late summer of 2007, why will the real new banking regulation that we need still not be in place until the autumn of 2012?
Toby Perkins
I should like to bring my right hon. Friend back to what he was talking about—unemployment, housing, the impact on people and how the last Labour Government protected people on the ground. Is it not strange that there seems to be no acknowledgment from those on the Government Benches about how many extra people are in work and still have the homes for which they have worked so hard all their lives? There seems to be no acknowledgment from the Conservative party that that issue is worth worrying about. Perhaps that is because they were not the people who lost their jobs or were in danger of losing their homes.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I press hon. Members to make shorter interventions. The shadow Chief Secretary is being generous; may that continue.
Mr Byrne
Thank you, Mr Deputy Speaker.
I want to pursue the argument for a moment longer. The implication of the intervention by the hon. Member for Bromsgrove (Sajid Javid) is that somehow there was a cut-price way for us to have ensured the recovery, which is now under way in this country. Sometimes when I listen to Conservative Members, I cannot make out whether their preference is simply to have done nothing during the past two years or whether it is that we should have invented some kind of cut-price plan to kick-start the recovery. Sometimes I feel that there is an illusion on the Government Benches that we could have rummaged around in a Budget bargain basement and found a Ryanair, cut-price, no-frills plan that would have delivered the economic growth that this country is now experiencing.
Elizabeth Truss (South West Norfolk) (Con)
What we are criticising is how the debt was built up prior to the economy going into freefall. Public spending in many areas doubled, yet productivity did not increase. Between 1997 and 2007, productivity went up by 2.3% in the private sector, but fell by 0.3% in the public sector. What we had was years and years of waste.
Mr Byrne
Perhaps the hon. Lady could explain why the Conservatives supported our spending plans until 2008. As for public sector productivity, she will know as well as I do that if more medical staff are put on to nurse patients, one might get a higher survival rate and better care, but such outputs do not show up in the cold light of productivity statistics.
Alun Cairns (Vale of Glamorgan) (Con)
The right hon. Gentleman talked about an illusion, and we can trade statistics back and forth, but at the election the ultimate judgment came down to the British people, who judged that Labour had failed to regenerate the economy and offer a way forward. That was the ultimate judgment, as opposed to the rose-tinted spectacles that he appears to be looking through.
Mr Byrne
I am grateful to the hon. Gentleman for raising the question of mandates. If one thing is clear in the debates that we have had in the months since the election, it is that there is absolutely no mandate for the VAT measure in the Finance Bill. I would be interested to hear how he is explaining that to his constituents.
I do not believe—nor have I heard any explanation of this—that some kind of recovery plan on the cheap could have delivered the economic recovery that is now under way. In life’s difficult moments, one is always open to advice, but the truth is that if we had followed the prescription of the Conservatives, we could have kissed goodbye to the recovery, not least because our banking system would have collapsed, the cash points would have stopped, the dole queues would have spiralled, repossessions would have spiked, and Britain’s small businesses would have been submerged beneath a wave of foreclosure, bankruptcy and liquidation.
Mr John Redwood (Wokingham) (Con)
In August and September 2007, when I and some others were urging the Government to make more cash and liquidity available to the banking system to prevent the collapse of Northern Rock and others, why did they ignore our warning? Why did they lecture the banks about having got it wrong, instead of supplying reasonable amounts of money to see them through, and then bankrupt them as a result?
Mr Byrne
I seem to remember that the Government’s response to the banking system was opposed by the Conservatives when it came down to the substance of a vote. When legislation was brought before this House to accelerate the way in which the banks could be sorted out, the Conservatives voted against it.
In the Budget and the Finance Bill, the Conservatives should have centred their rationale on how the recovery can be sustained. In the debates on those measures, I think we have established that there is a consensus that the deficit has to come down. The price of dodging an economic doomsday was not cheap, and the deficit was bound to rise. However, when the shocks hit back in 2008, we had the second lowest debt in the G7. Between 1997 and 2007, we cut public sector debt from 42.5% of gross domestic product to 36% of GDP. Over the 10 years before the crisis, UK borrowing averaged 1.4% of GDP compared with 1.9% for the rest of the OECD economies. As a result, even amid the current expense, our national debt will simply rise in line with every other major economy.
We have learned something from the debates on the Finance Bill and the Budget about the disposition—the economic philosophy—not only of the Conservatives but of the Liberal Democrats. They may feel that the price of recovery was not a price worth paying, but they cannot ignore what economic statistics are now saying about how the recovery is improving the position of the public finances. In March, my right hon. Friend the shadow Chancellor told the House that the deficit this year was £13 billion better than expected for 2010-11; in June, the Office for Budget Responsibility said that it was £8 billion better even than that. Since February, £123 billion has been knocked off projections for national debt, and that is before we sell our shares in the banks. The Government’s budget was underspent last year to the tune of £5 billion according to Treasury figures that we saw a week or two ago, and interest rates were falling in the months before the election.
When we examine the savings generated by falling unemployment, we can really see the wisdom of a strategy that hinges on growing our way out of recession. Our policy all along was to act to ensure that we kept unemployment down. Not only did that policy work well, and not only was it morally right, but it was economically wise. Our policy has delivered unemployment that is 2% lower than either in America or across the European Union. In the Budget in 2009, we had to assume that unemployment would stick at about 2.44 million. A year later, in the 2010 Budget, that forecast had fallen by 700,000 people to 1.74 million. That meant that over the four years from 2010 to 2013, there would have been a fall of £14 billion in the unemployment benefit bill, as well as an incalculable saving in human misery.
With that inherited recovery in place, the question that the House should ask in relation to the Finance Bill is what action should be taken to speed up the recovery. How can we guarantee the recovery’s certainty and begin to marshal investment into rebuilding an economy that is better balanced? Instead of providing any answers to those questions, the Budget and the Finance Bill will slow the recovery down and put more people on the dole. They offer a strategy for rebalancing the economy composed in equal measure of a wing and a prayer.
Nothing better illustrates the gambling instincts of this Government than the fast cuts to public sector jobs and the depression of consumer demand through VAT. With the most breathtaking casualness, they are prepared to put our hardest-fought recovery at risk. With such an unlikely scenario for growth in his pocket, one would have thought that the Chancellor might just hedge his bets a little and ensure that the private sector was creating jobs at some pace before bringing forward plans to sack up to 800,000 public servants. One might have thought that he would have some regard for cities such as my home town, Birmingham. It already has high unemployment, but if the Chancellor cuts 9% of the 156,000 public sector workers there, it will potentially rise by 14,000 people. That will not help the recovery in Birmingham; it will act as a drag anchor on recovery. That story can be told in towns and cities all over the country.
Owen Smith (Pontypridd) (Lab)
On precisely that point about the different levels of private sector job creation and public sector job losses around the country, was my right hon. Friend worried to see the Oxford Economics report of last week predicting that in Wales, for example, just 4,000 jobs will be created, which represents 0.3% growth over the next five years? That will lead to significant net increases in unemployment in Wales and the report predicted that we would not see a return to the current levels of employment until 2025. The picture is similar in the west midlands and other areas across the country.
Mr Byrne
My hon. Friend highlights the second risk that I wish to move on to. With risks so great, and talked about so freely and with such casualness, one would have thought that at the very least, the Finance Bill would contain one or two more measures to encourage the growth of domestic demand instead of measures to try to tax it back into recession.
The truth is that the Bill attacks domestic demand with such viciousness that the country is now hoarding its silver at an almost unprecedented pace. Britain’s families and businesses now have so little confidence in the future of the economy that rather than make the odd investment here and there, they have tucked away something of the order of £130 billion in the bank as the household saving rate has escalated. Britain is now saving money that is not being spent either in the shops or on building new factories or production lines. The Budget has not restored confidence but is draining it fast.
The Economic Secretary to the Treasury (Justine Greening)
Will the right hon. Gentleman give way?
Justine Greening
Is the right hon. Gentleman saying that he thinks the savings ratio is too high and that we should encourage people to go out and spend, spend, spend even if they cannot afford it?
Mr Byrne
No. I am saying that the country’s investors now have so little confidence in the economic plan that they would rather save their money than dare to invest it in productive capacity and growth for the future.
Let us look at some of the measures that show the decline in confidence. The Bank of England says that mortgage approvals fell in June; last month, the consumer confidence index fell for the first time in a long time; and yesterday, Rightmove told us that house prices have been cut for the first time this year. The Budget and the Bill are putting Britain’s recovery in the slow lane. The greatest irony of all is that we must all pay more as a consequence.
Sammy Wilson (East Antrim) (DUP)
The right hon. Gentleman mentioned two aspects of aggregate demand—consumer spending and Government spending—but is he also concerned that the Government are depending partly on an increase in exports, because all the indications are that the markets in Europe and America will not be as buoyant as was assumed? Therefore, all three major areas of aggregate demand will be subject to downward pressure.
Mr Byrne
The hon. Gentleman makes an extremely good point. The evidence on that is mixed. The CBI industrial production survey, which was published earlier this afternoon, shows that manufacturers reported that the second quarter of this year was good and that they have a degree of confidence in exports. However, the problem is that the OBR is projecting a £100 billion increase in exports over the next four or five years. That is the equivalent of our exports to America tripling, our exports to China going up by something like 20 times, and our exports to India going up by something like 40 times. That may well come to pass, but it is safe to say that very few people would bet on it. That is why the Opposition believe that the Government should do a little more to nurture both domestic business investment and domestic demand.
The alternatives for reducing the deficit that we have rehearsed in the past couple of weeks bear a final word this afternoon. I want to return to the explanation of the difference between the scorecard projections for tax growth and what the OBR said would come through the door, which the Exchequer Secretary struggled with earlier. The point centres on how much growth will contribute to paying down the deficit over the next four years. The Labour Government’s deficit reduction plan projected that the deficit would be reduced by something of the order of £78 billion over the next four years, and the OBR inconveniently told the Chancellor that we were on course to deliver that. That plan involved £57 billion-worth of discretionary action, which was set out in detail in chapter 6 of the March Budget—£19 billion in tax increases and £38 billion of spending cuts. However, £21 billion of the deficit was projected to be closed by the economy returning to growth, with higher tax receipts and lower benefit bills.
The June Budget appears to hit growth so hard that £9 billion of extra tax is necessary to make good the effect of lower growth. That is the price of slowing the recovery. The Liberal Democrats are awfully pleased that they got an increase in income tax thresholds, and I congratulate them on securing that concession, but the truth is that they have been sold a pup. They could have had the increase in the threshold they originally wanted if we did not have to pay for the cost of lost growth.
The Budget scorecard on page 40 of the Red Book says that by rights, the Chancellor’s decision ought to bring in an extra £8.2 billion in tax by 2014-15, but the OBR says that only £3.1 billion will actually come through the door, because growth will be depressed so much by the Budget. The Red Book goes on to say—on page 97, table C9—that something like £9 billion in extra taxes and spending cuts are necessary because of this go-slow Budget. In other words, the Government have almost halved the contribution of growth to closing the deficit. It is now quite clear to the House that although the Government may have lost their monetarists, they have certainly not lost their masochists.
Sajid Javid
The right hon. Gentleman was comparing the growth forecast of the previous Government to that of the current Government. Is not the truth that the forecasts of the previous Government were made up by Ministers whereas the forecasts we are looking at today were made up by the independent OBR? He talks about selling a pup, but was not the pup the forecasts of the previous Government?
Mr Byrne
I hope that at some point in his future illustrious career in this House the hon. Gentleman has the chance to put that argument to the chief economist of the Treasury, David Ramsden. The growth forecasts that were published in our Budget were set out by Treasury civil servants. Like me, the hon. Gentleman will have noticed that the rebound in growth that was projected by the then Chancellor—now the shadow Chancellor—was very much in line with the rebound in growth that we saw after recessions in the 1980s and 1990s, but it was supported by far stronger monetary policy action. We were comfortable with the growth forecasts that we presented. The hon. Gentleman will have to reconcile himself in the months to come to the impact of slower growth and the fact that we are now having to put taxes up—something that I always thought the Conservatives opposed—because demand has been depressed to such an extent.
Andrea Leadsom (South Northamptonshire) (Con)
Only this morning in the Treasury Committee we were talking with Sir Alan Budd and some of the members of the OBR, who made it clear that their role in challenging Treasury forecasters was strong and robust. They see the role of the OBR—as confirmed by Dave Ramsden when he was interviewed—as extremely positive. In fact, Mr Ramsden said that the OBR has achieved, in transparency terms, 20 years of progress in eight weeks.
Mr Byrne
The hon. Lady is right to underline the virtues of the OBR. I, too, welcome it, which is why it is so regrettable that it moved forward its press releases and gave the appearance of supporting the Prime Minister through what was a sticky Prime Minister’s questions. I look forward to the day when Members of Parliament have the right to appoint the leadership of the OBR, just as I look forward to the day that we have the right to appoint leaders of the Office of Tax Simplification, who—we learned this afternoon—appear to have been appointed on some kind of whim.
My final point is the basic failure of fairness in the Bill. The truth is that the Government were so embarrassed—perhaps some of their members were even slightly ashamed—that the Budget was so regressive that they only dared describe its effects flattered by Labour measures and three years before the full horrors take effect. We did not hear a word from the Government about the £8 billion hit that our country’s pensioners will take in new VAT bills. Nor were we told about the £70 million of extra, irrecoverable VAT that our charities will now pay.
We gave both the Conservatives and the Liberal Democrats a chance to vote for an amendment to delay the VAT increase until a plan was in place to compensate pensioners and charities fully, and they voted against it. The public will draw only one conclusion—that this Government simply do not care. If I am not mistaken, the entire contribution of the big society bank that Labour created will be wiped out by the VAT increase—[Interruption.] I hear protests from the other side of the House. If they read the March Budget they will see clearly set out the measures to recycle dormant accounts into the social investment wholesale bank. The proposals appeared under that heading in many manifestos.
What a cruel con trick to perform on some of Britain’s most deserving. Yesterday, the Prime Minister told us that he wanted to put some oomph into Britain’s communities. Many of us would agree that it was a phrase worthy of the Mayor of London. This Budget tells us that the only thing going into communities from this Government will be the boot. That is why we will campaign up and down the country for a proper plan for growth and jobs, and for proper protection from this Budget for our pensioners. It is also why we will oppose this Bill in the Lobby tonight.
Matthew Hancock (West Suffolk) (Con)
It is an honour to follow the right hon. Member for Birmingham, Hodge Hill (Mr Byrne). Having spoken a couple of times in the debates on this Bill as it has passed through the House, I wanted today to consider the economic evidence. We have heard an awful lot about the importance of what we need to do, and we have heard an awful lot from the Labour party complaining about every measure put forward, but it is also important to consider the economic evidence. Listening to his speech, it struck me that he thinks that nothing that the previous Labour Government did was wrong. It also strikes me that, so long as he and his party continue with that approach, nobody will listen to them when they make other points. It is clear to all of us who went through the election campaign that the previous Government did many things wrong, and a little bit of an apology, or perhaps a suggestion of individual things that went wrong, might be appreciated in this debate.
Thomas Docherty (Dunfermline and West Fife) (Lab)
The hon. Gentleman has criticised the previous Government time and time again. However, does he think fundamentally that the strategy taken by my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) to intervene when the wheels were coming off the wagon was the wrong thing or the right thing for us to have done—yes or no?
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I remind Members that we have to stick to the Bill. We are being dragged off in different directions, so please stick to the Bill. That is what we are debating.
Matthew Hancock
I am grateful for the opportunity to pay tribute to the then Chancellor, who expressed his gratitude to the then Opposition Conservative party for the support it gave him during September 2008. That is often forgotten on the Labour Benches.
On the evidence, one of the central questions to which we return time and again in this debate is whether there is a contradiction between dealing with the deficit and getting growth. It is clear that the Labour Front-Bench team think that those two things are entirely in contradiction. However, I want to consider the evidence for whether that is true. We all know that, in the long term, tackling the deficit is unavoidable—occasionally that is even acknowledged by those on the Labour Front Bench. Any child born is born with £23,000 of debt, and under the former Government’s plans, interest payments would have amounted to £70 billion a year, which could otherwise have been spent on important public spending.
There is also a question, in the shorter term, of whether fiscal responsibility can lead to growth. I was interested in this, so I went to look at some of the evidence. There is a very good literature review by Alberto Alesina, who, having described the argument that there is only either fiscal consolidation or growth, wrote that
“the accumulated evidence paints a different picture… Many even sharp reductions of budget deficits have been accompanied and immediately followed by sustained growth… These are the adjustments which have occurred on the spending side and have been large, credible and decisive.”
If the shadow Minister thinks that the Budget was large, credible and decisive, I would be happy to hear from him.
Mr Byrne
I understand the debating technique that the hon. Gentleman is adopting—trying to set up a straw man in order to knock it down—but our deficit reduction plan contained £57 billion of decisions relating to fiscal consolidation alongside £22 billion of growth. Fiscal consolidation was not posed as an alternative to growth; actually the two things were seen very much as twins.
Matthew Hancock
Unfortunately, those from whom the previous Government had borrowed so much did not see a credible plan from the Labour party. That is why we have had to introduce the emergency Budget, so that we could put that credible plan in place. Since the election, there have been downgrades in the debt of many of our competitors, so it is critical that we have managed to put that triple A rating on to a sustainable basis.
I want to go through three reasons why a fiscal consolidation can lead to growth. The first, of course, concerns interest rates. The long-term interest rates at which many companies around the country borrow—they include those in my constituency, and no doubt those of all other Members—have fallen. In fact, since the election the 10-year rate has fallen from 3.88 to 3.44%, which represents more than a 10% fall in the funding costs of companies up and down the country. Of course, that was not taken into account in the two productions of the Office for Budget Responsibility analysis, which is why a direct comparison of the two is, as stated by Sir Alan Budd, misleading.
James Wharton (Stockton South) (Con)
I would like to echo my hon. Friend’s comments about interest rates, but also add that low interest rates have a beneficial impact not only on our economy and businesses, but on the very individuals and families whom the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) talked so much about. The most disadvantaged in our society will benefit most from the positive outcomes of the fiscal and economic policy approach that we have taken.
Matthew Hancock
My hon. Friend is getting a reputation for making extremely good interventions, and that was one of them. Fiscal consolidation also means that interest rates can be held lower for longer by the independent Bank of England, which is a second important channel through which economic growth can be supported, and not opposed, by fiscal consolidation.
Mr Byrne
I am following the hon. Gentleman’s argument with great interest. He will have worked at the Bank of England for long enough to be able to read bond yields. Like me, he will have noticed that they were actually coming down from late 2008, down to a low point in February, not least because there was a flight to safety in the European bond markets. As people began to worry about what was going on in the eurozone, they chose to transfer to safer assets, including UK gilts. That was because there was credibility in what was the fastest and clearest deficit reduction plan of any country in the G7.
Matthew Hancock
Of course, the bond market could see a Conservative—or coalition—Government coming, and that is exactly what happened. I will say this to the right hon. Gentleman: when there is a flight to safety, I would rather it was to British bonds, not to bonds overseas, which is what could easily happen if we did not have a credible policy.
Kwasi Kwarteng (Spelthorne) (Con)
Those of us who have looked at bond yields will have noticed that the tightening—as it called—of British bonds actually happened in April. That happened as a consequence of the markets being sure that the Labour Government would be voted out, as everyone in the City has mentioned.
Matthew Hancock
I am always delighted to talk about when the previous Labour Government lost office, so I thank my hon. Friend for that intervention. Let me go through a few more elements of the economic evidence. I have here an extremely good literature review, by Policy Exchange, the think-tank, which lists—
Matthew Hancock
What Policy Exchange has done is review the economic literature, which is what I am looking at. Perotti, in 1999, said:
“High debt levels are associated with higher probability for fiscal policy to have”
expansionary effects. The European Commission—not something that Labour Members tend to barrack—said: “Expenditure cuts may exhibit” expansionary features,
“even in the short and medium run.”
So the economic evidence is there. The best quotation from that review is this:
“Though now quite well established in economic literature”—
referring to the argument that fiscal consolidations promote growth—
“this work is still feeding its way into the wider public consciousness.”
No doubt part of the reason for the slow move of that argument into the public consciousness is the argument put forward by Opposition Members that it is not true.
There are two other important ways in which consolidation will get to higher growth. The first, of course, concerns expectations of future tax rates. If people around the country can see that spending is out of control, they will anticipate that taxes might have to rise in future, whereas setting out a clear path for taxes makes it clear that there will not have to be sharp and immediate tax rises in future, even if that path includes some tax measures. That forward-looking element of human nature, which is so important in understanding how the economy works, matters at a personal level—for some people far more than for others, as I entirely accept—but it especially matters in the corporate world. Businesses look to the future to see how much tax they will be paying, as well as how much it will cost them to pay it because of the complexity of that tax. That is why it is so important to have both the simplification of the tax system that my hon. Friend the Exchequer Secretary—soon to be right hon. Friend, no doubt—set out, and the ladder down in headline corporation tax rate, which will set out a 1% reduction year on year so that our businesses know that Britain is open for business.
Owen Smith
On that specific point of corporations looking to the future and thinking about how to plan their business, can the hon. Gentleman tell me of any industrial sector or any big British company that has responded to the austerity budget and said that they now anticipate significant growth and taking on new people? I have not seen any such report.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Before the hon. Member for West Suffolk (Matthew Hancock) resumes his speech, let me say that we allow some latitude on Third Reading of the Finance Bill, but that it would be useful if Members made reference to the Bill from time to time.
Matthew Hancock
The reductions in corporation tax that are outlined in this Bill have been welcomed by the CBI, the British Chambers of Commerce, the Institute of Directors and the Federation of Small Businesses. Indeed, a multitude of business organisations have welcomed it. Even the Engineering Employers Federation said that this was a path in the right direction. That shows the support from business organisations.
Matthew Hancock
Let me make some progress; I have only a couple of minutes left.
The final argument is about productivity. Greater tax competitiveness not only helps productivity in the private sector, as consolidation can also help productivity in the public sector. We read only this morning that the police have said that they can take 12% out of their budget without affecting front-line services. I wonder what that 12% was spent on under the previous Administration.
Matthew Hancock
I am going to conclude.
So this is my argument: fiscal responsibility is not contradictory to growth; it is absolutely central to sustainable growth in our country. The Budget is unavoidable, but it also lays the platform for confidence and for support of the businesses that are going to grow us out of this hole. Everybody knows that if one is in debt, the sooner it is dealt with, the better; and the longer it is left, the worse it gets. Having looked at the economic evidence surrounding this Budget, I am absolutely delighted to say that I commend this Bill to the House.
Mary Creagh (Wakefield) (Lab)
I want to look at three areas of this Finance Bill. The first is the economic impact of the fiscal conservatism contained therein, and particularly how, in tandem with the fiscal consolidation taking place across Europe, it threatens a double-dip recession not just here but Europe-wide. Secondly, I want to look at the social and labour market consequences of the double whammy of the VAT bombshell and the deep spending cuts. Thirdly, I shall focus on the political implications of the Liberal Democrats making the wrong choices by voting in favour of this Bill this evening.
On the economic impact of the Bill, we see the pursuit of the Goldilocks economy—one in which neither too much nor too little is spent, but the spending is somehow just right. We all know that fairy tales are fine for little children, but it is a dangerous metaphor because it over-simplifies a complex economy still in a fragile state of recovery. How do we know that it is dangerous? Well, because the Office for Budget Responsibility tells us that growth will be lower and unemployment higher in future years, with 1.3 million jobs set to be lost over the next four years as a result of the measures in this Finance Bill.
I tabled a parliamentary question a week or so ago about the contact between the Office for Budget Responsibility and the Treasury on 29 and 30 June and 1 July—and in the aftermath of those sticky Prime Minister’s questions debates. So far, I have had no reply from the Economic Secretary. I would have thought that it was a fairly simple thing to look into officials’ diaries, ministerial diaries and phone records and to give the House a reply on the important question of whether pressure was put on the Office for Budget Responsibility.
The pre-eminent question raised by this Finance Bill, but left unanswered by those on the Treasury Bench, is: how does taking money out of the economy increase confidence, boost growth and secure the recovery? The answer is, quite simply, that it does not.
There seems to be an insistence that Government spending is somehow crowding out private sector investment. That is ludicrous. The United Kingdom’s output gap—the gap between what it produces and what it has the potential to produce—is somewhere between 4% and 6%, depending on whose estimate we accept. The Chancellor expects the private sector to take over demand from a shrinking public sector, but is silent on where that private demand will come from. It is clear from what has been said in the debate that there are no real answers to that question.
The Government say that 2. 5 million jobs will be created—
Mary Creagh
I will not, because we have only one hour left, and eight Members wish to speak. The Front-Bench spokesmen took their time, and I intend to take my time.
The labour economist David Blanchflower, a former member of the Monetary Policy Committee, has said that the Government’s prediction on jobs is wildly over-optimistic, given that the Labour Government created only 1.6 million jobs between 2000 and 2008, when the economy was, by consensus, booming.
The VAT increase for which the House voted will raise £12.1 billion in 2011-12, but will reduce the amount of goods and services that people can buy. It will depress demand and delay the recovery. It will increase prices permanently by 1%, thereby permanently reducing the value of future earnings and—one of the hot topics in the Bill—future pensions. It will also disadvantage the poorest, who spend the biggest proportion of their income.
Let me say something about the social impact of the Bill. It was difficult to hear the details of that as the Minister raced through his speech. We have heard from the Prime Minister that children need warmth, not wealth, and they will certainly miss out on the wealth part as a result of this Bill. Poor families in Wakefield will lose up to £1,200 as a result of changes in working families tax credit. From April 2011 the Sure Start maternity grant will be available only for the first child in a family. That means a £500 cut for low-income pregnant mothers who already have a child.
Mary Creagh
No. I am going to take my time. As I have said, I am not going to take interventions.
Nappies, prams, babygros, bottles, dummies and high chairs will all be more expensive for families in our constituencies as a result of the VAT increase, but the grants to help the poorest women in our society to afford them will be cut. When I asked the Secretary of State for Work and Pensions how he expected families to cope, he said that he wanted them to recycle prams, but if someone has a child one year younger than another child, where is the second baby supposed to sleep? In the same cot? The parent of a second child will still need to buy a new car seat and a double buggy. It will be more difficult for low-income families to buy all those items. We are losing the baby element of child tax credit, and we are losing Labour’s proposed toddler tax credit, which would have meant another £208—
Matthew Hancock
Will the hon. Lady give way to an intervention on the increase in tax credit?
Mary Creagh
I know that there is to be an increase of £150. I will come to that if the hon. Gentleman will show a little patience and allow me to make progress with my speech. He spoke for 13 minutes, and I hope to take less time than that.
As I was saying, the toddler tax credit would have provided an extra £208 a year for families with children aged one or two. Moreover, child benefit has been frozen for three years, which means a real-terms cut.
Mary Creagh
I have already said that I am not going to give way to Opposition Members. It is true that child tax credit will rise by £150 above inflation for one year—
Mary Creagh
I am dealing with the hon. Gentleman’s point. Perhaps he would acknowledge that. Families on low incomes, however, will see their costs rise as a result of the VAT increase—
Mary Creagh
I know what the hon. Gentleman wants to ask, and I am happy to answer his question without his having to spend a minute asking it.
Matthew Hancock
On a point of order, Mr Deputy Speaker. I am new to the House. Could you possibly advise me whether it is appropriate for a Member to make an entire speech having stated in advance that he or she will take no interventions whatever?
Mr Deputy Speaker (Mr Nigel Evans)
It is very much up to hon. Members whether to take any interventions or a number of interventions, but what I have heard from the hon. Lady tells me that she is going to take no interventions during her speech.
Jacob Rees-Mogg
On a point of order, Mr Deputy Speaker. The hon. Lady said that she was not taking any interventions because the debate had to finish in an hour. The Order Paper, however, says the debate may continue until any hour. Can you explain to a new Member which is correct, Mr Deputy Speaker?
Mr Deputy Speaker
Funnily enough, I was waiting for that point of order to be made earlier. The Order Paper is always correct, and this debate could indeed go on until any time.
Mary Creagh
In that case, Mr Deputy Speaker, I am happy to take all interventions, even though I have spent three minutes clarifying those points.
Andrea Leadsom
That is the sisterhood.
I want to make a point about pushchairs, prams, car seats and cots. To my certain knowledge, from having been involved for a long time with a charity that works closely with families and their babies, there is a surplus of those items in charity shops. People refuse to purchase or even to accept them, and I was interested to learn that the hon. Lady believes that part of the definition of poverty is if someone cannot have all those items new.
Mary Creagh
I am not saying people should buy everything new, but I am certainly not telling families in my constituency that when they have a second baby they should trawl around to the local hospice shop or British Heart Foundation shop in a desperate quest to get a car seat so as to take their child home from hospital without breaking the law. The hon. Lady says that those goods are in abundant supply. One of the important things about car seats is that if we buy them second hand, we have absolutely no idea whether they have been involved in a car accident. I am certain that no Member of this House has bought a car seat for their child—for their new baby—from a charity shop. What we ask for ourselves we should also stand up for in this House, and ask for our constituents.
Chris Leslie
When listening to interventions from the Government Benches, it comes as a shocking revelation to hear the notion expressed that those who are in financial difficulties can go round the charity shops looking for cots and prams. I do not quite see how they can do that for sanitary products or teething equipment, for instance: perhaps the hon. Member for South Northamptonshire (Andrea Leadsom) would suggest buying recycled baby bottles and so forth, too. All such products attract the higher rate of VAT at 17.5%, which will go up to 20% as a result of the Bill. Does not all this show a degree of condescension in the Conservative party’s attitude to those in the greatest need?
Mary Creagh
I think it does, and I also think it is indicative of the idea that the poor are no better than they should be, and that they should aspire to nothing better than charity shop purchases.
Mary Creagh
No, I want to finish my point. There is an important point to make about cots. No matter where people get their cot from, they should never put a baby to sleep on another child’s mattress, because they do not know what has happened to that mattress—whether it has been vomited or urinated on, for instance.
We talk about putting babies “back to sleep”, and about cutting the rate of sudden infant death—which predominantly happens in lower income households. There are issues here to do with families living in overcrowded housing and babies sharing beds with their parents, yet the hon. Lady is saying that new mums and expectant mums are supposed to go round hauling cots home in their eighth and ninth month of pregnancy and then putting them up. Frankly, she ought to think a little more about what she wishes for her constituents.
Alun Cairns
On a point of order, Mr Deputy Speaker. I seek your guidance on what cots have to do with the Finance Bill, and on the relevance of the points that have just been made.
Mr Deputy Speaker
The relevance is the subject of VAT, which is addressed in the Bill, but I would reiterate the guidance given before I took the Chair, which is that people must, please, keep to the contents of the Bill and show some restraint, as many Members wish to speak.
Mary Creagh
We have had a debate on the higher-rated goods, which will be permanently more expensive following the votes that we will have this evening, but I also want to talk about the cuts to Labour’s child trust fund.
Andrew George
I agree with many of the points that the hon. Lady has made on child care issues, but I wish to put something on the record for her. I understand that on children’s car seats, which have been mentioned, the VAT rate is limited to 5%.
Mary Creagh
I thank the hon. Gentleman for that clarification.
I now want to discuss the child trust fund, which is also being cut. When I visited Greenhill school in my constituency to talk about financial education, I asked 10 and 11-year-olds how much money they had saved up in their bank accounts and the answers given by those little 10-year-olds ranged from £50 to £80; that was their life savings. But those children knew that their little brothers and sisters had got £250, and in some cases £500, from the Government through the child trust fund.
Mary Creagh
I will make my point first. I bet that there is not a single Member sitting on those green Government Benches whose children’s life savings amount to £50. I shall happily give way to any hon. Member for whom that is the case.
Andrea Leadsom
Will the hon. Lady explain whether those children also knew that they had about £23,000 of debt each?
Mary Creagh
That is one of the figures put about by the Conservatives during the election as a way of frightening people about the level of debt. Labour Front Benchers have comprehensively set out that the best way to reduce the debt is by growth, and not by frightening people. Most people who have a mortgage understand that they have tens of thousands of pounds of debt—but the point is that when someone is paying off their mortgage they do not stop feeding their children, and they do not stop running their car. In effect, the Government are paying off the mortgage much more quickly than they need, and the consequences of the political choices that they are making will have huge impacts on every constituency.
For Members on the Government Benches, £500—the amount of the Sure Start maternity grant—may be what they spend on a good meal at the Fat Duck in Bray. We debated that before in the House in relation to one newspaper columnist, Stephen Pollard, when the matter was raised by a Conservative Member—I believe it was the hon. Member for Kettering (Mr Hollobone). For children on the Eastmoor estate in Wakefield, however, that £500 is a life-changing sum, and will change some of the life choices that they make.
Charlie Elphicke
I just point out to the hon. Lady that child poverty has risen by 300,000 since 2004, whereas under this Budget it will be frozen for two years. Does she not welcome that very positive fact?
Mary Creagh
Interestingly, when the Red Book refers to the effects on child poverty it talks about the next couple of years but does not mention 2013 and 2014. Thanks to the work being done by my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper), the shadow Secretary of State for Work and Pensions, we are finding that this Budget’s impact on women—in particular on poor women, low-paid women and public sector worker women, and therefore on their children—is likely to hit disproportionately hard. I leave the hon. Gentleman with that thought.
What is absent from the Budget and the Finance Bill is any mention of the poor. The changes to the disability living allowance gateway are to save £1 billion by 2014, but we need clarity about which groups of disabled people are going to be affected. The housing benefit move to the 30th percentile of average housing will have an impact on families across the country. Stringent changes are being made to the housing benefit rules to say that anyone who has been on jobseeker’s allowance for more than a year will automatically lose 10% of their housing benefit.
If that is done to people, there are three possible outcomes. The first is that the people involved find jobs—and good luck to them. I am sure that that is the stated aim of the Government’s policy. The second possible outcome is that those people cannot find jobs because a further 1.3 million people are on the dole as the public sector and private sector job losses kick in, so they are forced to borrow the money. However, we are talking about people with a low income or no income, so they will, in effect, be forced into the arms of loan sharks and will fall into debt. The third possible outcome is that these people will spend £10 a week less feeding their children, so their children will be pushed back into poverty. The arguments being made about child poverty will not wash with Labour Members, because both the second and the third possible outcomes will tip those families back into poverty.
George Freeman
The hon. Lady mentioned the child trust fund, and I think that all hon. Members would agree that establishing a culture of saving is a commendable thing. In principle, does she think it is better for children to learn to work and to save, or to learn that the way to acquire money is to be given it by the Government?
Mary Creagh
The beauty of the child trust fund is that both those things happened; this involved people who would never have thought of opening a trust fund. I count myself among them, because I had no idea what a trust fund was until I was “given it by the Government” when my son was born, but now that I understand what it is and I understand the secrets of how people save for their children in a tax-efficient way, it has enabled me to think carefully about how I plan for my children’s future. It enables families to do both those things.
Most families are using the child trust funds to put a little bit extra by. The parents who scrimp and save to put into the child trust fund will not let their children waste the money. The straw man that has been held up is that they will blow it all on their 18th birthday party, on buying fast cars and all the other things that 18-year-olds do—[Interruption.] That is certainly what has been stated by some Government Members as a reason for cutting the child trust fund; they have said, “You can’t give it to 18-year-olds because they won’t know what to do with it.” When their parents have paid into the fund they will make absolutely sure that that money, which for them is a life-changing sum, will be used wisely by their children.
Mary Creagh
I have taken one intervention from the hon. Gentleman, and I am aware that other hon. Members wish to speak.
The VAT rise in the Finance Bill will cost the NHS an extra £250 million each year, and it will be very bad for public health, too. Recent research by David Stuckler and his colleagues published in the British Medical Journal shows that social spending—housing benefit, disability living allowance and other such benefits—has more impact on tackling health inequalities than spending on the NHS. They studied 20 European countries over two decades, finding that mortality rates increased when social spending was cut. So the public health impact of cutting the housing, disability and incapacity benefit budgets will be felt by the poorest in our society in the reduction in their life expectancy.
In concluding, I wish to discuss what has happened in the past 10 weeks and the political impact that voting for this Budget will have on the Liberal Democrats. The past 10 weeks have been like a very dark episode of Doctor Who, with the Conservatives as the evil Cybermen. The Cybermen were originally a wholly organic species of humanoids that implanted more and more artificial parts into their bodies as a means of self-preservation. This led to the race becoming coldly logical and calculating, with every emotion all but deleted from their minds. They use human pawns and seek to further their number by conversion. The Liberal Democrats are the Conservatives’ hapless victims. The Cybermen have to assimilate their victims in order to drain their energy and live, but we all know that when the Cybermen have assimilated, they have only one further aim: they say to their victims, “You will be deleted.”
These are not progressive cuts. There is nothing progressive about slashing the extension of free school meals to the children of the working poor and thrusting 50,000 children back into poverty. There is nothing progressive about freezing the pay of dinner ladies, hospital cleaners and nursery workers. Why should low-paid women pay for the fiscal hysteria of markets and central banks, which presided over such colossal market failure? Why is corporation tax being cut by 1% a year for the banks when everyone in Wakefield is seeing their VAT increasing by 2.5%? Why is the annual exempt amount for capital gains tax rising each year with the retail prices index when housing benefit and occupational pensions in Wakefield will increase only by the consumer prices index?
Those are political choices. They are the wrong choices for my constituents and for those of other hon. Members. Economically, this is a deflationary Budget. It is wrong for Britain, wrong for families, wrong for pensioners and wrong for the poor. Politically, supporting this Budget will be the wrong thing for the Liberal Democrats. I urge all Liberal Democrat Members to think before they vote tonight, and before they throw away 120 years of Liberal tradition as the Tories’ new poodles. You are being assimilated. You will be deleted.
Mr Deputy Speaker (Mr Nigel Evans)
Order. Before I call the next speaker, in response to the point of order from Mr Rees-Mogg I stated that the Order Paper, as ever, was correct and that the debate could carry on for some time. However, hon. Members will also note if they look at the Order Paper that there is other business this evening. Another debate is to follow this one and it can last three hours, so I ask for some self-restraint for the duration of this debate.
Andrew George (St Ives) (LD)
I shall bear your advice in mind, Mr Deputy Speaker, because I know that many right hon. and hon. Members wish to take part in that debate, which is fundamentally important to the vast majority of Members of Parliament. I hope that I have demonstrated such self-restraint in my contributions to the debates on the Finance Bill and will do so again this evening.
It is a pleasure, of course, to follow the hon. Member for Wakefield (Mary Creagh). Her concluding remarks, in which she used fictional characters to make her point, were a piece of fiction that was very entertaining, but that is probably as far as it will go.
The Finance Bill—after all, we are debating the Finance Bill and, perhaps sadly, not the Budget as a whole—has, as the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) made clear, nine clauses. It is rather limited. There will be a further Finance Bill in the autumn and, of course, there were other measures in the Budget—the hon. Lady referred to some of them—including the public spending restrictions of which we will learn more from 20 October onwards. Those issues will no doubt be debated in the future in the House. The debate this evening is narrowly focused and has been defined by Treasury Ministers as they have brought forward a limited number of measures from the Budget.
I wish simply to make a couple of points. Primarily, I want to focus on the issues that I have raised through probing amendments to the Bill—in particular, those to do with VAT, its impact and what alternatives there might have been to the 2.5% rise proposed in clause 3. Before I do so, it is worth while to make it clear for the benefit of the hon. Lady and other Opposition Members that I shall support the Finance Bill on Third Reading, primarily because the Budget as a whole contained a number of measures for which the Liberal Democrats have been campaigning for many years, including the increase in personal allowances, the triple lock on pensions and the introduction of a banking levy. That levy is not at the level at which I should have liked it to have been, as I have made clear in earlier debates, but none the less it is a move in the right direction. I shall be encouraging Ministers to lever it up still further. Other such measures include improvements in child tax credit, protections for lower paid public sector workers and closing tax loopholes such as that on capital gains tax, which was brought in by a Labour Government. Although I want to see that increase still further, with protections—particularly for certain groups that will still use capital gains tax as a means of avoiding paying their rightful tax—it is still a move in the right direction. In view of all those measures, and in spite of my misgivings about other aspects of the Bill, I shall support the Government on Third Reading.
As I have made clear, I had a number of misgivings. The Government are well aware that I refused to support them on the increase in VAT, as the voting record clearly shows. In the conclusion to the Budget, the Chancellor made it clear that the intention was to ensure that
“the burden is fairly shared”
and that the aim was to have
“The richest paying the most and the vulnerable protected”.—[Official Report, 22 June 2010; Vol. 512, c. 180.]
I shall not rehearse all the arguments contained in the Red Book and the Institute for Fiscal Studies’ analysis of the impact of the VAT rise, but, having considered the impact on public services, on charities, on rural dwellers dependent on an old banger to get around because of the inadequacy of public transport and on poor families, I believe that the increase in VAT is regressive. That is clearly not a view held by Ministers, but it is still relevant.
Let me refer to three elements of the impact of the VAT increase on charities. First, a briefing has been supplied to me by Save the Children that states that
“we will pay more in VAT but will not be able to charge VAT on our income as other companies do. This is a real concern.”
Save the Children’s analysis of the figures presented in the Red Book points out that the deciles that are identified in the graphs include the most wealthy decile, which commences at £49,700 per annum. A lot of the very wealthy receive an income of significantly more than that. Save the Children states that
“the graph measures the impact at 2012/13 which doesn’t include the impact of the tax & benefits changes in the Emergency Budget over the whole parliament and probably fails to pick up the changes in the measurement of the uprating (RPI to CPI). The essential point is that although the highest earning households pay more, they still pay proportionately less of their household income on the tax increases than poorer households.”
In previous debates, I have said that the impact on those households with children is clearly regressive according to Save the Children.
Mencap has also provided me with a briefing on the impact that the measure is likely to have on its services for the learning disabled. Mencap provides important services and accommodation for the learning disabled and it estimates that for the 15 months from January 2011 to April 2012—that is, until the end of the next financial year—the cost to it will be £450,000, nearly half a million pounds. That figure includes non-recoverable VAT incurred by its housing subsidiary, Golden Lane Housing, which plays a significant role in Cornwall, where it provides an important service. I received the advice from one of Mencap’s trustees who lives in my constituency, Colin Rogers. His concern as a trustee is that
“as much of Mencap’s income is earned and not donated and since these earnings come from service provision which is also likely to be cut, we are potentially facing a dire financial position which can only be managed by reducing the many services which we subsidise or provide free-of-charge to people with learning disability and their carers. As a rough guide, the 12 month figure of £370,000 would each year pay for around 20 full-time community support workers”.
I hope that the Government will take the impact on charities on board.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
Is not the tragedy of the increase in VAT and its effect on charities the fact that we know that it will cost £150 million across the sector, but the human cost of the recession is now feeding into the system and we have not yet reached its peak? The pressure on services is increasing all the time at a time when costs are also increasing.
Andrew George
In the context of the extremely difficult circumstances in the economy, the VAT rise will certainly make things doubly difficult for charities, because where they depend on donation income to make up the shortfall that has been created as a result of the VAT rise, that will be significantly more difficult. A number of charities are already reporting that charitable donations have decreased in recent times and this will make the environment significantly more difficult for them to survive in.
Let me give as a local example Penwith Housing Association. Its chief executive, Andy Moore, has provided me with a briefing regarding the impact that the rise would have on that association and its management of its stock
“due to VAT being chargeable to PHA for all our repair and maintenance expenditure and many other service costs.”
He said that as it does not charge VAT on its rented homes, it has little opportunity to recover the tax. Penwith Housing Association anticipates that the cost to it will be about £182,000 a year. That money will probably have to be found through increasing tenants’ rents, but its tenants are already on low earnings. Given that tenants’ housing benefit might be cut as well, the VAT rise will create significant pressure.
In an intervention on the Exchequer Secretary in his opening remarks, I emphasised a point that I and the hon. Member for Nottingham East (Chris Leslie), who is not in his place, had brought forward in amendments that we had proposed—the possibility of introducing a sunset clause in relation to the VAT increase. That would have chimed with the Government’s claimed tax policy as set out in chapter 3 of the tax policy document that was published alongside the Budget. There was a strong sense that the Government had an opportunity to demonstrate that, as the Budget was an emergency Budget and the VAT rise was therefore an emergency measure, the VAT rise could be time-limited and that there might at least be an opportunity for a sunset clause. Ministers could have accepted the measure then or it could have been introduced on a more acceptable date. There could at least have been a promise of a formal evaluation of the impact of the VAT rise and an opportunity for Parliament properly to scrutinise both the impact of the rise and whether, in the context of the emergency Budget, the fiscal situation had improved by the time the review and evaluation took place. Parliament could then come to a conclusion as to whether it was satisfied with the measure.
I am very disappointed that the Exchequer Secretary has not accepted the proposals either for a sunset clause or for an evaluation of the impact of the VAT rise. I hope that Treasury Ministers will review this issue in due course.
Ms Angela Eagle
I am listening to the hon. Gentleman’s arguments very carefully. Will he tell us whether he is so disappointed that he will now finally consider not going into the Lobbies to support the Budget on Third Reading?
Andrew George
Perhaps the hon. Lady was not listening to my opening remarks when I said that on balance, because there are many measures that I approve of, even though I am disappointed by this particular measure, I will be supporting the Government. This is, of course, a Finance Bill and not the Budget as a whole.
I was reassured, but I seek further reassurance from Treasury Ministers, regarding the promise that the Government will not revisit the current list of zero-rated and 5%-limited VATable products and services and that they certainly have no intention of reducing those lists or in any way cutting the number of VAT-exempt, zero-rated or VAT-limited products and services such as those that we have been debating.
Andrew George
I am just bringing my remarks to a close and I know that a lot of people wish to engage in the Backbench Business Committee debate later, so I hope that the hon. Gentleman will bear with me.
It has been a pleasure to take part in the debates throughout the proceedings of the Finance Bill. I put on record my disappointment regarding the VAT measure in particular and I hope that Treasury Ministers will reflect on the debate and come forward with an evaluation in the months and years ahead.
Mr Chuka Umunna (Streatham) (Lab)
The measures in the Bill and the emergency Budget in general have been called many things. The Chancellor has described them as “tough but fair”, the Prime Minister has described them as “open” and “responsible” and the Exchequer Secretary, who is no longer in his place, has referred to the comments of the Chief Secretary on the Bill’s Second Reading. The four characteristics that the Chief Secretary chose to attribute to the Bill and the emergency Budget were “fair”, “business-friendly”, “responsible” and “unavoidable”. I shall address each of those in turn and relatively quickly as I understand that others wish to speak.
First, however, I want to consider the premise on which the Bill is being marketed to us. According to the coalition, the Bill addresses the need to reduce the deficit that was caused by profligacy of the previous Government. In Committee, the right hon. Member for Wokingham (Mr Redwood) said that “we are where we are because of the utter mess bequeathed to us by Labour in the last Government”. It seems that reference to this supposed mess has become mandatory in all interventions by Cabinet Ministers and Members on the Government side for the duration of the Bill’s passage through the House.
In the coalition’s view, the credit crunch is but a minor detail when studying the public sector debt: the liquidity crisis that took hold of financial markets from August 2007 is just a blip; central banks having to step in to provide extra liquidity from there on is a minor detail; and the collapse of Lehman Brothers in September 2008 is insignificant. In adopting that stance, they utterly fail, as my right hon. Friend the Member for Birmingham, Hodge Hill (Mr Byrne) has pointed out, to acknowledge the huge role that the international banking crisis played in relation to the state of the public finances and our economy at large.
Mr Umunna
I wish to make a bit of progress, but I might give way in a bit.
I wish to acknowledge that the Conservative side of the happy couple that is our coalition is at least consistent in its approach. The Conservatives fail to acknowledge the gravity of the financial crisis and its effect on our economy now and they failed to acknowledge the gravity of the crisis back in the autumn of 2008 when the Labour Government and others around the world took decisive action to save the financial services sector from itself and to protect the deposits of our constituents. The current Prime Minister and his Chancellor were then advocating the complete opposite—a do-nothing approach.
Let us be clear. Whatever those on the Government Benches say, no serious economist currently claims that the deficit can be disassociated from the global credit crunch I have just described. The credit crunch led the last Government to spend billions to prop up the financial services sector and to support our economy in the face of a global economic downturn that caused tax receipts to plummet and benefit payments to increase.
Gavin Williamson (South Staffordshire) (Con)
Will the hon. Gentleman give way?
Mr Umunna
No I will not; I will make some progress first, and I will give way in a bit.
What we are witnessing now is a gross and distorted rewriting of history and repainting of the picture to justify the imposition of a Finance Bill and Budget that are less about economics and all about politics.
On 23 June, in an insightful piece in the Conservative house journal, The Spectator, its political editor described the Chancellor’s Budget thus:
“The mission, as Mr Osborne sees it, is to shrink the public sector and grow the private sector—the classic goal of the modern British centre-right.”
That is what the measures in the Bill and the emergency Budget are all about.
Let us address the Chief Secretary to the Treasury’s claims that the Bill is fair. He said:
“This is a Budget that protects the most vulnerable, especially children in poverty and pensioners, while ensuring that those with the broadest shoulders take the greatest share of the burden.”—[Official Report, 6 July 2010; Vol. 513, c. 203.]
Just a few weeks ago, a Liberal Democrat leaflet was pushed through thousands of letterboxes in my constituency under the headline, “Clegg delivers on promises”, proclaiming that the Government are reducing the deficit in as fair a way as possible. It made a series of claims in relation to the Bill and the emergency Budget. First, it claimed that there will be “more money for schools”. We have seen now how accurate that claim was: consider the Building Schools for the Future debacle that we have witnessed over the past few weeks.
Secondly, the leaflet claimed that
“tax credits for needy households”
will be
“saved”,
yet the emergency Budget, in fact, freezes child benefit, thus producing a real-terms cut for more than 14,000 in my constituency who receive the payment. Thirdly, it claimed that the emergency Budget included
“a tax cut for low and middle income families by raising tax allowances”.
That neglects to mention that the increased allowances are completely outweighed by the panoply of regressive measures in the Budget—most notably, the unfair VAT rise that will be introduced under clause 3.
During the general election campaign, my Liberal Democrat counterpart and I spoke at an international Save the Children event in my constituency and we both talked of the need to reduce child poverty. Save the Children is running an excellent campaign in opposition to the VAT hike—a hike that the Liberal Democrats now sanction. I note that there is but one Liberal Democrat Member, I think, in the Chamber at present.
Mr Umunna
Okay; three.
The charity said:
“A 20% VAT rate means that the poorest parents will see their VAT bill rise to at least £1,600 a year—affecting already overstretched budgets—and driving some into the arms of loan sharks”,
as my hon. Friend the Member for Wakefield (Mary Creagh) has just mentioned.
The fourth and final claim in the Liberal Democrat leaflet is that they stopped
“Tory plans for a huge Inheritance Tax give-away for the wealthy.”
Even if we accept that claim—I do not—the omission of that giveaway from the Bill pales in comparison with the appallingly regressive overall impact of the Budget, which the Institute for Fiscal Studies and others have looked into. It has calculated that the total effect of the tax rises and spending cuts will cost the average family in the top income decile £1,135 a year. It will cost the average family in the bottom income decile £1,344—£209 more in real terms. The poorest will be 20.5% worse off, and the richest will be 1.6% worse off. So when it comes to social justice, the Government have absolutely nothing to boast about.
The suggestion made in the leaflet that those who are on low incomes should rejoice at the fairness of a Budget that places a larger real-terms burden on the poorest than the richest is an utter disgrace. What is even more disgraceful is the fact that the measures in the Bill and the emergency Budget were a choice. Whatever rewriting of history the coalition indulges in, it cannot distract us from a simple fact: the coalition Government have actively chosen to do this to my community.
Gavin Williamson
Does the hon. Gentleman not feel that the last Labour Government had any responsibility for the economic situation that we find ourselves in and that the uncontrolled borrowing had an impact and led to the decisions that are encompassed by the Bill?
Mr Umunna
I will turn to those exact points in the rest of my speech if the hon. Gentleman will wait.
Let me address the claim that the Bill will, as the Chief Secretary said, help
“businesses that we rely on to rebuild our broken economy”.—[Official Report, 28 June 2010; Vol. 512, c. 674.]
The signs are that those businesses, along with leading economic experts, do not share his optimism. A recent survey of the service sector by the Chartered Institute of Purchasing and Supply showed that confidence in the sector has been dented by the austerity measures announced in the Budget, of which, of course, the Bill is a part. The survey registered a fall in confidence between May and June this year that was the most significant drop since records began 14 years ago. Since the First Reading of the Bill, the International Monetary Fund has updated its 2011 growth forecasts, downgrading that of the UK by 0.4% on its April figures—the largest drop in the forecast of any major economy over that period. The BDO business optimism index, which measures business confidence, saw its sharpest fall since 1995 between May and June this year, and who can blame those involved?
Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)
I should like to echo my hon. Friend’s words, especially given that the Government will reduce annual investment allowances by £75,000 under the Bill, which determines that a monetarist miracle will be export-led. Given that on emergency Budget day, the Engineering Employers Federation, which represents manufacturers, said:
“Reducing the corporation tax rate over time…might be a positive signal for large companies, but not for their suppliers”,
how will that meet export-led targets that are predicted, yet not witnessed since 1945, especially when the majority of nations’ economies are contracting?
Mr Umunna
Of course, I agree with my hon. Friend. In addition, behind closed doors, some people in the Treasury share the pessimism about the state of our economy, with a leaked Treasury document showing an expected unemployment increase of 1.3 million over the next five years owing to the coalition Government’s economic policies. As well as the colossal human cost of those job losses, that will exacerbate the deficit by significantly increasing unemployment benefit payments, as I mentioned before, and cutting income tax and national insurance receipts significantly, but let me go on to the next point, as I wish to make some progress.
According to the Chief Secretary, the Bill will help to reduce the deficit and take action to eliminate the structural deficit, which is, of course, an obsession of the Government. We have already seen that their determination to do that could lead to the biggest cuts in Government spending that we have seen for many decades, but let us linger a little on the claim that the Bill is “responsible”. I have already explained how the coalition has sought to conflate public finances before the financial crash with the measures taken to mitigate the crash’s impact on hard-working ordinary people, but it is crucial that we establish what is “responsible” and what is not. The facts tell a very different story from that told by the coalition Government.
When Labour came to power, as the shadow Chief Secretary has said, public sector net debt was 42.5% of GDP. On the eve of the financial crisis, it was 36.5%, and interest payments had fallen from 3% to 1.6% of national income. A recent report by the IFS found that,
“the UK public finances were in better shape when the financial crisis began than they were when Labour came to power.”
By contrast, Germany’s indebtedness amounted to 65% of national income in 2007. In France, the figure was 63.8%; in Italy, 103.5%; and Japan ran consistent deficits, with the result that it owed 167.6% of national income by 2007. In short, the UK Government’s borrowing at that time was not of the order suggested by the Conservative party and certainly did not by any stretch of the imagination cause the economic crisis that followed.
That crisis, of course, caused the world economy to contract for the first time since the second world war. As I said, that called for decisive fiscal expansion—for billions to be injected into failing banks and into a flagging economy. How lucky we were that the then Government intervened. I for one refuse to apologise to Government Members for the bold action that the Labour party took to keep people in work, to ensure that they could still take money out of the ATM cash machines in the wall and to prevent the recession from mushrooming into a catastrophic depression.
Let it be said loud and clear that responsibility was what the previous Government did, but irresponsibility is pinning the blame for the size of the public sector debt on the previous Government and using that as a reason to hack off chunks of the public sector through spending cuts. Will Hutton, whom the Government have just appointed to head up their commission on high pay in the public sector, hit the nail on the head when he wrote in October that it was not the Labour Government
“that got us into this mess…What got us into this mess above all was the 30-year rise of Big Finance”.
However, the same people who insist that the previous Government got us into this mess propose in the Bill a corporation tax cut that will gift millions to big finance—that is what I call irresponsible.
Let me finish by examining the claim around which much of the Budget debate has revolved: that this was an “unavoidable” Budget, thus making the Finance Bill unavoidable, too. The two parties in government have made a set of choices that, I dare to venture, predate the economic crisis by a number of years. The game plan on which the Budget was based was disclosed long ago in the 2005 Conservative manifesto, the author of which happens to be the new occupant of No. 10 Downing street. The Conservatives pledged in their manifesto to slash 250,000 public sector jobs and to abolish 168 public bodies. Back then, Howard Flight, the party’s deputy chairman, was secretly recorded saying that the cuts publicly advocated by his party were a fraction of those planned. He said that the actual plans had been recalibrated into something that would be “politically acceptable” and that his party
“had to win an election first”,
but that afterwards
“you can actually get on with what needs to be done.”
We therefore cannot say that we were not warned, although people’s surprise that the Conservatives have been joined in their venture by the Liberal Democrats is wholly understandable.
Given all the shifting political sands and hidden agendas, the game of choices necessitates an eagle eye, because what stands out from the Bill and the Government’s general economic policies is not just the unfair VAT rise and the corporation tax gift to the City, as well as the disingenuous rhetoric with which they are presented, but what is absent from the Budget and the Finance Bill. Where, for example, is the plan to make the financial services sector bear its fair share of the burden? The Wall Street Journal said that the City should
“count itself lucky with the coalition government's emergency budget”.
Of course, the Government will introduce a bank levy that is forecast to raise about £2 billion, but that is a pin-prick when one considers the vast profits made in the sector. Even the IMF has proposed that the levy should raise £6 billion a year if we are properly to curb the “reckless behaviour” of the people in the industry. That additional £4 billion a year could—
Mr Deputy Speaker (Mr Nigel Evans)
Order. The hon. Gentleman’s speech is going wider than the Finance Bill itself, so will he please direct his comments to the Bill?
Mr Umunna
I was actually reaching the end of my speech, Mr Deputy Speaker. The key point that I am trying to make is that there is an alternative: a deficit reduction strategy that is based on growth and fair tax rises, as opposed to the scorched earth policy being pursued by the two parties in government. The alternative is similar to the strategy that President Obama is pursuing in the US which, in vain, he is trying to persuade our Prime Minister to follow. The alternative is to go for a more sensible timetable for deficit reduction, because as Roger Bootle of Capital Economics said last week before the Treasury Committee,
“In straightforward economic terms, I am not sure it would make a great deal of difference if the adjustment were over a longer period.”
The alternative is to avoid the overwhelmingly avoidable measures presented in this Bill—not least the VAT rise—that ultimately hit the poorest hardest. I assert that the Bill is four things: avoidable, unfair, damaging to business and deeply irresponsible.
Chris Heaton-Harris (Daventry) (Con)
I shall canter through my comments because I know that time is very short. I always try to find something for which to thank the previous speaker, so I thank the hon. Member for Streatham (Mr Umunna) for not mentioning Doctor Who. The hon. Member for Wakefield (Mary Creagh) mentioned the Cybermen at quite an uncanny moment because I was wondering which planet she was on. Her speech reflected her state of denial about the level of debt that we are in and the budget deficit that the Government have inherited. It is ridiculous that a speech in this debate omits mentioning the astronomical amount that we have to pay just to service our debt.
Bizarrely for this debate, I would like to make several points about the Finance Bill. I am interested by the Treasury’s use of dynamic modelling to reach its 28% figure for capital gains tax, and would like to see what that dynamic modelling entails. If we were to use dynamic modelling for other taxes, such as income tax, I wonder what the ideal figure would be to generate the most income but hit people the least.
I had the privilege of attending a couple of lectures given by the great economist Art Laffer—he of the Laffer curve. He shows that if people are taxed at 100%, there is no receipt, because no one bothers working, that if tax is 0%, there is no revenue because none is paid, but that there are ideal points somewhere in between. I assume that the Treasury was using a similar process in its dynamic modelling, but it would be nice to see the detail.
I welcome the reforms and cut to corporation tax. We live in a global market, so we must set our corporation tax competitively. I hope that the measures will be good for all businesses because we want them to reinvest in themselves, and our approach will leave more money in small businesses for reinvestment.
I am pleased with the measures that will directly help small businesses, because I know that small businesses and the private sector will drive us out of this economic mess with wealth and job creation. Many Labour Members think that growth in the public sector stimulates the economy, but it does not. It does soften the fall of a weak economy, but the fall still comes none the less.
Measures such as waiving the first £5,000 of national insurance contributions for the first 10 employees in a small business—alas not in London, the south-east and eastern regions, although I hope that the measure will be extended—will be truly beneficial to businesses in Daventry. The 1% reduction in small companies tax represents a 2% cut in real terms because the Labour party planned to raise it by 1%. The rise in the entrepreneur’s relief threshold to £5 million should ensure that most small business owners are not penalised heavily when they come to sell their companies.
I grew up in a small business environment, which is a meritocratic place in which long hours and hard work sometimes pay off. Most small businesses have been looking at the public sector, with its pay, holidays and pensions, with a growing sense of disbelief and occasional anger. From talking to public sector workers, I know that most of them, especially those who directly face the public, know that the Government need to better cut their cloth. They do not like the pay freeze, but they will tolerate it because they know that it is targeted at those earning more than £21,000 a year and that most people in the private sector have had no salary increase for a long time. In fact, most understand as much as anyone else why the country is in such an economic position. They will do their bit to try to help us out of the mess that we are in.
There seems to be only one group of people in permanent denial about our position—they sit on the Labour Benches. I read yesterday that it was said of the Bourbons that they forgot nothing and learned nothing, and that could easily be said of Labour Members, given the way in which they wrought havoc on our economy and the fact that they are in such denial.
It was out of concern for Labour Members that I turned to my computer search engine to try to find them help. I typed in all the necessary symptoms and found an American website: debtdenial.com. The website asks many questions, such as
“Do you only pay the required minimum”
on your accounts to avoid interest payments? The previous Government did not even manage to do that because our debt was constantly spiralling. The website also asks:
“Do you know or have a ballpark figure about how much you owe?”
The Labour Government might have known once or twice, but not on an ongoing basis. The website asks whether people are
“Afraid to apply for a loan because you don’t want to hear that you’re ‘overextended’”—
that would definitely apply to Labour Members. It says:
“If any of these apply to you, you may be in Debt Denial.”
The website goes on to list ways in which individuals can help themselves, and I shall end with a salient piece of advice:
“if you continue living in Debt Denial, you’ll never make any progress towards paying off your debts. And paying off your debts improves your credit, giving you the freedom to do more things…you’ve”
been wanting to do. I am pleased that the coalition is moving forward with many sensible measures in the Finance Bill, and I also commend debtdenial.com to Labour Members.
Toby Perkins (Chesterfield) (Lab)
The hon. Member for Daventry (Chris Heaton-Harris) was true to his word. His speech was fairly brief, but it could have been a good deal briefer, because he completely failed to understand that the Bill is simply a return to the ideological and illogical Tory mistakes of the past. It reflects a Budget that spoke throughout of the Tory obsession with public sector cuts and the mistaken belief that public sector shrinkage automatically leads to private sector growth. In fact, the Tory belief seems to be that our economy is balanced on a see-saw—that as soon as the public sector goes down the private sector goes up, and vice versa. I speak as someone who for the past five years has run a small business, and who for seven years before that worked in the private sector for one of the fastest-growing companies in the UK.
As an internet-based sports retailer from 2004 to the general election, I relied on customers from all four corners of the country and every aspect of our diverse economy. I sold to businesses and to business people, for sure, but I sold also to schools, school teachers, universities, armed forces teams and individuals, such as doctors, council workers and police officers. The VAT rise in the Bill would have taken 2.5% straight off the bottom line of my business and would inevitably have led to higher prices; it would absolutely have had to. It means not just higher prices for pensioners, the disabled and people on benefits, those who are already likely to be struggling because of cuts to their housing benefits, but a double whammy—less money and higher prices.
So far we have heard a great deal from the Con-Dem Government about the private sector’s role in the recovery, but more revealing has been what we have not heard. We have not heard how the private sector will play a role in reducing the large number of people who claim sickness-related benefits when getting back to work; how cutting manufacturing allowances to fund a corporation tax cut that will help businesses only in January 2013 at the earliest is going to help our manufacturing industries and help us to grow our way out of recession; or how the retail sector will contribute to our growth when the Government’s policies will take money out of customers’ pockets.
I know the impact that those measures could have, because if the Government take money out of the pockets of people, particularly the poor and public sector workers, they take it out of the private sector, too. They take it out of the pockets of the shop owner who would have sold a teacher a new television; they take it out of the pocket of the plumber who would have fitted a new bathroom for a social worker who, now, does not have the confidence to make that purchase; and they take it out of the pocket of the double glazing firm that was about to install a new conservatory at a doctor’s house. The idea that the private sector will flourish because of this Bill is ludicrous.
The economy is not out of the woods. The Bill stifles growth, it is bad for business and it is bad for those who rely on the public services. The Government got the answer wrong not only by failing to understand the impact on the private sector of the cuts in public sector spending, but on every level with their decisions on taxation and investment. Tory Members have admitted that this is an ideological Budget, rooted in Thatcher’s economic catastrophes. The Budget means that huge global banks will pay less tax, while the very poorest people in our society—benefit recipients and pensioners—will be worse off. The Exchequer Secretary to the Treasury was unable to provide me with any way in which the Bill will compensate pensioners, the unemployed or those who do not have children for the fact that, under the VAT rise, they will pay hundreds of pounds more a year.
To hear the Conservative party propose such measures is no surprise. Conservatives have always set out to protect privilege and wealth, as anyone who has ever studied history will know. It is what they have always done, and that is why the hon. Member for Bermondsey and Old Southwark (Simon Hughes) said:
“I have always been concerned that Conservatives first look after their own and have presided over widening inequalities and not a more just society.”
That is what he has always said. Once I held out hope for the Liberal Democrats, but hearing them suddenly claim that VAT is a progressive tax, that we need dramatic cuts now and that we should not be too harsh on the bankers, it is as if the recent general election was so painful for them that they cannot bear to remember what they spent a month arguing.
The Tory cuts philosophy was the wrong decision at the wrong time, but even if we accepted that their cuts programme had to go faster and further than they had ever let on during the election, and even if we believed that Labour’s responsible deficit reduction programme for halving the deficit in four years was not enough, we would find that the decisions in the Bill still do not make sense.
The Exchequer Secretary argued that the Government had been left without a choice, but, as my hon. Friend the Member for Streatham (Mr Umunna) revealed, there were alternatives. The capital gains tax rise was less than half that promised in the Liberal Democrat manifesto, and corporation tax was already at its lowest point for a long time and 5% less than it was in 1996-97. If there are tough decisions to be taken, and ordinary people and so many good businesses are struggling so badly, why choose to make life even more prosperous for those businesses that are already flourishing and, in some cases, contributing very little to growth?.
The previous Labour Government were securing growth to protect hard-pressed people against losing their homes, and when we realise that in this recession about 30,000 fewer people lost their homes than did so in past Tory recessions, we see just how easily the Tories would have cut people adrift. When we see that 500,000 fewer people lost their jobs than would have done so if we had followed Tory advice, we know that throughout this country there are people who can walk into work with their heads held high, knowing that when the crisis struck they had a Government who said, “Yes, we care.”
The measures that the Labour Government took are working. The predictions that the current shadow Chancellor made in his last Budget were, if anything, pessimistic. The borrowing requirement is down by £8 billion and there was a Government underspend of £5 billion. That is why even right-wing analysts such as Fraser Nelson of The Spectator have been forced to admit that the Office for Budget Responsibility did not demonstrate that measures in the Budget were inevitable, and, as Tory Members have admitted before, that it is an ideological Bill which reflects the warped view of life held by so many Government Members who have never had to struggle for anything in their lives—many of them millionaires the day they were born. Their first reaction to a crisis made in the City is to put social workers, school teachers, special needs assistants and carers on the dole; to tell people to put on a thicker jumper and holiday in this country; to cut the value of the money in people’s pockets and introduce an arbitrary tax that will hit the poorest hardest; and to do nothing—absolutely nothing—to create the jobs that might help the poor to work their way out of poverty.
Charlie Elphicke (Dover) (Con)
I shall keep my remarks brief and discuss clause 1 in relation to corporation tax.
There are many pockets of deprivation in Dover and Deal, and the rise in child poverty during the previous Parliament was a serious concern, as was the widening of the gap between the richest and the least well-off. The abolition of the 10p rate hurt and upset many of my constituents, so the rise in income tax personal allowance is extremely welcome, but what we need to do, as has been much discussed today, is to increase the nation’s trend growth rate.
On that point, I particularly welcome the reduction in corporation tax to what will be 24p by the end of this Parliament. That is incredibly important, because business, particularly international business, is very mobile and can set up anywhere. WPP, for example, has gone off to Dublin, and that should concern every Member, because the Exchequer is going to lose about £240 million in corporation tax receipts every year.
If we are to compete with centres in the European time zone, it is important also that we consider how to build in a participation exemption, as the Netherlands and Luxembourg have, and as Ireland and Switzerland have in effective forms. We need to draw international business into the UK, because that is a critical path towards expanding the amount of jobs and money that we have.
I make one brief plea. Reducing the corporation tax rate to 24p by the end of the Parliament is welcome, but, if we are to make a step change, reducing it to 19p would, in my respectful submission, be transformational. It would draw in international business and, ironically, raise corporation tax revenues. That is the international evidence, and that is the short and simple case that I put to the Treasury team—to consider going further, harder and deeper in future.
Margot James (Stourbridge) (Con)
I never cease to be surprised by some of the speeches from the Labour Benches. Some could have been made had the Labour party won the last election, because much of what our Government are doing would have to have been done whichever party had got in. Labour Members’ wholesale opposition to cuts and every single tax increase that has been forced on us is nothing short of astonishing. A BBC journalist to whom I was speaking over the weekend had interviewed all five contenders for the Labour leadership contest and only one had had the courage to admit that the public sector was simply too large and unaffordable. We are merely doing what has to be done.
The Labour party proposed spending cuts before the election; that is well known. It postponed the spending review until after the election, but it was planning 50% reductions in the capital budget and 20% reductions in revenue. However, it would not say where the cuts were coming from. Does it not concern Labour Members that they are so isolated? The OECD, the G20, the Governor of the Bank of England and even past Ministers from their own Government are acknowledging that this Budget is a good one in the circumstances. If they are not concerned by what those global organisations and City opinion leaders think of our Budget, will they be concerned about what the average man and woman in the street thinks of it?
The people whom I represent in Stourbridge, in the black country, have had to make cutbacks in their personal expenditure, as families and individuals, for a long time. They have had to prioritise the paying off of their own debt as individuals. The small businesses for which they work have had to pull their horns in. In the past two years, companies in my constituency have seen their order books fall by 50%. How can they manage such a reduction without resorting to the sort of cuts in their own expenditure that our Government are now courageously proposing as part of the Finance Bill?
The public know that the situation cannot go on. The shadow Chief Secretary to the Treasury was right to say that some of the problems were brought about by the banking crisis that precipitated the global recession. But the public also know that this country was the least prepared on entering that recession. From 2001, the former Prime Minister, as Chancellor, started upping the ante and increasing spending year on year without relief. During the years of growth, he made no provision for rainier days.
Stephen Williams (Bristol West) (LD)
My hon. Friend may be interested to learn about what happened when we sat on the Opposition Benches on the other side of the Chamber. Our right hon. Friend the Secretary of State for Business, Innovation and Skills, as Lib Dem shadow Chancellor, warned the former Chancellor of the Exchequer about the credit bubble being built up, but he was jeered and hooted at by Labour MPs, who were on this side of the Chamber at that time.
Margot James
I thank my hon. Friend for giving me the benefit of some of the history of the House before I was a Member. Many of the opinions of the Secretary of State were indeed prescient. What my hon. Friend has added to the debate is truly shocking.
The public sector is clearly unaffordable. The restructuring has been inevitable; there has been no choice on our side as far as that is concerned. Yes, we will try to make a virtue of a necessity and seek to rebalance the public and private sectors, which this country has long needed irrespective of the conditions in which we now find ourselves.
Toby Perkins
The hon. Lady mentioned the prescience of the right hon. Member for Twickenham (Vince Cable) and has commented on the size of the debt and how we got into this position. Will she also acknowledge that right up until 2008, before she came to the House, her party was arguing not for less but for more public spending in a raft of areas?
Margot James
I am glad that the hon. Gentleman intervened because I cannot understand why that point keeps being made by Labour Members. I fought the 2005 general election and our party’s policy was clear: we would share the proceeds of growth. We were not advocating spending at the same rate as the Labour party did when in government; yes, we were arguing for increases, but at a significantly lower rate than was happening under the Labour party. I should like to put that on the record.
I return to my theme that this Budget does a great public service in restoring the private sector as the driver of the growth that will get the country out of the mess that has been left to us to sort out. I want to commend a few of the key features of the Bill. The reduction in corporation tax to 20% for small and medium-sized businesses and the longer-term reduction for larger businesses are key. There is also the Work programme, which is about making work pay. We need to make sure that those who can work have the opportunity to do so—indeed, they must.
There are 50,000 more apprenticeship places and the national insurance holiday for new companies, which do not have to pay any national insurance whatever for the first 10 employees. Furthermore, the Government have abandoned the Labour party’s dangerous plan to levy an additional rate of employers’ national insurance and there has been a £250 million increase in the enterprise growth fund, meaning that medium-sized companies in this country have access to more credit. Those measures will restore the private sector. Painful measures that we are obliged to place on the public sector—with the full support, I believe, of the public—will be more than made up for by the recovery of the private sector, because, according to the Office for Budget Responsibility’s projections, employment will rise year on year. I know that Labour Members are sceptical about that, but I believe in British industry and think that our private sector, including all the small companies in my constituency, is ready for the challenge. We have at last liberated it so that it can take up the challenge. I have every confidence that through the recovery of the private sector, the country will prosper once again.
Ms Angela Eagle (Wallasey) (Lab)
We have had an interesting debate on the Third Reading of the Finance Bill, although it has gone over a lot of old ground, with no surprising new positions taken on either side. The Exchequer Secretary to the Treasury claimed again that the Budget is progressive—a claim that I shall dispute soon. The hon. Member for West Suffolk (Matthew Hancock), who is not in his place, set up a straw man to knock down and will come to realise that literature reviews do not translate into effective speeches. The hon. Member for St Ives (Andrew George) paraded his conscience around the Chamber again but told us, unsurprisingly, that he would be supporting the Budget after all, even though he admitted that it was regressive. People will note his crocodile tears. In the usual way, the speeches made by the hon. Members for Daventry (Chris Heaton-Harris) for Dover (Charlie Elphicke) and for Stourbridge (Margot James) supported their side of the House.
I commend the speech made by my hon. Friend the Member for Wakefield (Mary Creagh), who put before the House the real cost increases for women—especially those with young children—under the Finance Bill. That seemed to prompt much hilarity among Government Members, which I thought revealed more about their attitudes than about her concerns. She also mentioned the housing benefit and disability benefit changes outlined in the Red Book, and many millions of vulnerable people will be worried about those as the spending review approaches.
My hon. Friend the Member for Streatham (Mr Umunna) made an extremely good speech and put some facts about recent economic history on the record and my hon. Friend the Member for Chesterfield (Toby Perkins) pointed out the fallacy of private sector see-saws suddenly moving in to take over the spaces that the public sector has vacated. Such things are such an important part of the ideology of the Government. The hon. Member for Stourbridge at least did the decent thing by recognising that there had been a global recession, but she said that we were not prepared for it, although she knows that net Government debt before the credit crunch was the second lowest in the G7.
The Finance Bill puts into place a Budget strategy that is a huge gamble with the future prosperity of Britain. The Chancellor began by telling us that it was an emergency—that it was the “unavoidable Budget”. He has tried throughout this process to persuade the country of two things: first, that Labour somehow created the deficit all on its own; and secondly, that the only solution is to cut it further and faster than our plan to halve it over the lifetime of this Parliament would have done.
Neither of those assertions is true, and here is why. Extraordinarily, Ministers and Government Members, from the Chancellor on down, have failed to let the words “credit crunch” so much as pass their lips during the entire proceedings on the Bill. The attempt to rewrite recent economic history is one that George Orwell’s Big Brother would have recognised and admired. The fact is that the banking crisis, which started in the American sub-prime mortgage market, caused the biggest global contraction that we have experienced in the real economy since the Wall street crash in 1929 turned into the great depression and led directly to the outbreak of the second world war. Since they will never say it, let me reiterate that this crisis was not caused by the irresponsible public spending of Governments but by the greed and criminal recklessness of the banking and financial sector. Any analysis of current conditions that ignores that basic and obvious fact, even if only for the purpose of generating convenient political propaganda, risks a dangerous miscalculation of the appropriate remedy.
Ms Eagle
I will not give way because the hon. Gentleman has not been here for the entire debate; if he had been, I would have done.
We see in this Finance Bill that the Tory-led Government have made precisely that error with their deliberate, ideologically driven choice to go for a much more aggressive and reckless slash-and-burn strategy for public spending than the objective economic conditions, or even the bond markets themselves, required. The decision to opt for a balanced budget in four years is driven not by the objective economic conditions but by an ideologically driven political belief in a small state, a belief which is now apparently shared by the Liberal Democrats. Similarly, the decision to cut the deficit by imposing a 77% to 23% ratio of public spending cuts to tax rises is a choice driven not by the objective economic conditions but by the same belief in a small state apparently shared by the Liberal Democrats. It is a ratio of pain never before achieved in the UK, and it was not shared with the voters before the election. No mandate for this was established in the general election. Ministers have admitted that the cuts will be painful, but they have failed to acknowledge the scale of the pain that they have chosen to inflict. The apparent relish with which they choose to announce huge and ongoing cuts does them no credit whatsoever, and it will be seared into the memories of the millions of victims of their sadistic fiscal policy for years to come.
The propaganda techniques are chilling. Carefully chosen, extreme examples of excess in public expenditure are leaked by the Government to sympathetic tabloids to be highlighted in screaming headlines and make the case for more cuts. Government websites coarsen the debate still further by parading a stream of ignorant vitriol whipped up by sensationalist reporting, so it is suggested that workhouses are to be reopened, benefit claimants sterilised, and immigrants deported. If this is the nice face of the Tory party, then God help us, and shame on the Liberal Democrats for going along with it. The apocalyptic and absurd scares that they have issued about the UK economy resembling that of Greece—we heard it again today—have been not only fundamentally wrong but deeply irresponsible, and they have risked precipitating the very loss of confidence they purport to avoid.
This Finance Bill signals the biggest and most sustained public spending cuts in UK peacetime history, coupled with increases in taxes such as VAT that will directly take demand out of the economy just when recovery is fragile and still needs nurturing. That is why it is such a gamble. Labour Members are not the only ones who are deeply worried about the choices that have been made in the Bill. Following the Chancellor’s “austerity Budget”, the International Monetary Fund has just cut its growth forecast for the UK for both this year and the next. The OECD has criticised the decision to abolish the future fobs fund and other employment support packages as short-sighted and warned that the scale of job cuts in the public sector will slow down the recovery.
As a direct result of the June Budget and this Finance Bill, the now notoriously named Office for Budget Responsibility has had to revise upwards its estimates of job losses in the public sector. At the same time, it has revised downwards its growth forecasts and hoped that no one would notice that it excluded 550,000 people who work in state-owned enterprises from being in public sector employment, even though the Office for National Statistics classifies them as such: thus public sector job losses are likely to be even higher. The OBR’s prediction that the anticipated “recovery” will generate 2 million extra jobs in the private sector in just five years has caused widespread incredulity, because that target has never been achieved in the modern era. It has certainly never been achieved at a time when huge public spending cuts are likely to dampen employment prospects in the private sector and austerity measures are being imposed simultaneously in almost every developed economy in the world.
Kelvin Hopkins
Exactly the same predictions were made about unemployment falling because of the 1979 Budget—in fact, it went up to 3 million.
Ms Eagle
People should learn from their economic history; I only wish that this Government would.
The OBR’s heroic assumptions about export growth and business investment also strain credibility, but Sir Alan Budd will not be around for much longer to defend his forecasts, whatever happens in the real world. One thing is clear: we cannot all export ourselves out of trouble at the same time. Because world trade has been so badly impacted by the global credit crunch, the UK has experienced a 25% devaluation of its currency without any noticeable upturn in export performance. Prime ministerial trips to China accompanied by huge cuts in Government support for new industrial activity in the UK do not seem to be the right response to this challenge.
The Finance Bill contains no strategy for growth, yet growth is the best way of dealing with any deficit. In place of a growth strategy, we see a pious, dogmatic belief—often restated today—that the private sector will miraculously spring to life and fill every space vacated by the Government. This is in the teeth of massive private sector deleveraging, damaged confidence and an ongoing lack of affordable bank lending. The huge hike in VAT will damage demand at a crucial moment. This is an example of blind economic faith—it is not a serious growth strategy. The Bill contains no hint of an alternative if this blind economic faith turns out to be misplaced. There is no fallback position if the economic gamble that the Chancellor has outlined starts to go wrong. How high will unemployment have to rise before the Chancellor looks again? Why, once more, is unemployment a price worth paying?
Finally, I want to look at who is paying for the measures contained in the Finance Bill. The Chancellor has repeatedly asserted, “We’re all in this together”, but we have to judge him by his actions rather than fine words, and his assertion of social solidarity turns out to be a cruel joke. The Finance Bill and Budget measures are regressive, not progressive. They hit the poorest hardest. The VAT hike is the regressive centrepiece of a regressive budget. The stealth move from retail prices indexation to consumer prices indexation for all benefits and all pensions takes £6 billion in savings from the poorest and most vulnerable and gives at least £50 billion, and possibly £100 billion, to employer pension schemes, at the risk of employee representatives. The losses mount year on year, for ever into the future.
Analysis has shown that the Budget takes a massive 21.7% of income from the bottom 10% of the income distribution and a mere 3.6% from the top 10%. My right hon. Friend the shadow Secretary of State for Work and Pensions has shown that of the £8 billion net revenue raised by the measures before us, £6 billion will be raised from women and children, with only £2 billion being raised from men. Like Flashman in a tight spot, the Chancellor has chosen to put women and children first. He has put them first in the firing line, bearing the brunt of his tax rises and spending cuts.
This Finance Bill takes a huge gamble with our still fragile economic recovery. It gambles that a vicious bout of self-inflicted austerity will not tip us back into a recession or a long period of low growth, and that we will be able to export our way into growth at a time when a globally synchronised austerity signals otherwise. It is regressive, threatens social cohesion and hits the poorest hardest, and we cannot support it.
Justine Greening
No, I will not.
We have just heard from the shadow Minister that the Opposition are still in denial, and I shall come to that later. Before we conclude what has been a lengthy debate over the past few weeks, I wish to echo the earlier comments of my hon. Friend the Exchequer Secretary. Hon. Members throughout the House have played an essential role in scrutinising the Bill, and I thank them all for doing so.
Today we heard from the shadow Chief Secretary—the man who admitted that there was no money left—and from my hon. Friend the Member for West Suffolk (Matthew Hancock), who successfully demolished the Opposition’s case for failing to take any action to sort out the deficit. We heard from a number of Opposition Members, including the hon. Members for Wakefield (Mary Creagh), for Streatham (Mr Umunna) and for Chesterfield (Toby Perkins). I listened to what they had to say with great interest, and in many cases they violently agreed that we are in a serious situation that needs to be sorted out. What we failed to get from any of them, however, was any kind of alternative. That thread has run through not just today’s debate but the debates over the past few weeks.
We heard an important contribution from the hon. Member for St Ives (Andrew George), who throughout our debates has talked about his concerns about some aspects of the Bill. However, he has recognised that we have to take serious steps to sort out the fiscal deficit. We also heard from my hon. Friends the Members for Daventry (Chris Heaton-Harris), for Dover (Charlie Elphicke) and for Stourbridge (Margot James), who all want a Government who face up to the challenge, as do their constituents.
The Bill provides for many of the key measures in the emergency Budget, which was needed to address the fiscal crisis that we face in our country and get Britain growing. Although it was tough, it needed to be, and was, fair. When we came into government, we had to set up the Office for Budget Responsibility to get, finally, an independent review of the books. That review showed that the books were perhaps even worse than the former Chief Secretary had said.
Justine Greening
No, I will not.
The OBR said that the deficit was £12 billion larger than had previously been suggested, so our priority was to tackle that deficit. Although reductions in public sector spending will be necessary to ensure that it is at a level affordable to the public, taxes clearly have to play their part as well. As we have heard, even from the hon. Member for Wallasey (Ms Eagle), growth in employment must be led by the private sector. Reducing incentives to employers, as the previous Government would have done by introducing the jobs tax and raising small companies’ corporation tax rates, would have reduced incentives and led to our economy languishing for longer and longer, and debt building up.
Chris Williamson (Derby North) (Lab)
Is the Minister aware, though, that the Financial Times published research last month showing that 1.2 million jobs in the private sector rely on the public spending that she is going to cut?
Justine Greening
That is typical of the contributions that we have had from Opposition Members all the way through our debates. The hon. Gentleman’s party went into the election having passed its Fiscal Responsibility Act 2010, which set out 20% cuts. That means one of three things. Either Labour Members had no intention of ever reducing or tackling the deficit, in which case the Act was gross duplicity; or they went into the election standing on a platform of cuts with no idea whatever of how to deliver them, in which case it was gross incompetence; or they knew what they wanted to do but still, in spite of all the hours of debate, fail to admit to any of the measures that they were planning to take, in which case it is gross concealment. We need take no lectures from the hon. Gentleman.
Justine Greening
No, I will not. There was a time when the Labour party had something relevant to say on the economy; that time has now passed.
What we need to do is to ensure that companies in this country and across the world know that Britain is open for business. That is why the centrepiece of the Budget was providing a springboard for a private sector-led recovery to take place by reducing the rate of corporation tax year on year over the next four years; reducing the small profits rate of corporation tax, benefiting 850,000 companies; and of course taking difficult decisions on capital gains tax changes that will mean increases for higher rate tax payers while protecting entrepreneurship. The Budget was welcomed by business across the board, and it is important to bear that in mind when Opposition Members say that they do not believe that it will ultimately boost jobs.
Although we wanted to help business succeed, we also recognised the importance of protecting those most in need, and the Budget did just that. From April 2011, we are increasing the personal allowance, removing almost 1 million people from income tax. On pensions, we are taking the power to repeal the pensions tax regime introduced in the Finance Act 2010, which will allow us to bring in a fairer arrangement that will not allow the very rich to benefit from basic rate tax relief. We are re-establishing the earnings link for the state pension with a triple guarantee, making changes to the benefit system that will protect the most vulnerable people in our society, increasing child tax credits and introducing a set of measures that, despite a tough Budget, will leave child poverty unchanged.
We know that we need to take that action, because the Labour party has absolutely no alternative. We have debated the Budget long enough now for Labour Members to have brought forward an alternative if they had one, but they clearly do not. We have been honest and open about the problems that our country faces.
Justine Greening
That is what the voters expect, and what they—[Hon. Members: “Give way!”] Oh, I will give way.
Clive Efford
I am very grateful to the hon. Lady, but will she accept this one point? Throughout the debate her party has argued that the state is too big. Everyone accepts that the Budget will cut the size of the state so that in six years, it will be smaller as a proportion of GDP than it was in 1997. Does that not suggest that it is an ideological move, and on that basis does she not accept that if the Tories had been elected in 1997, they would have come in cutting?
Justine Greening
What is too big is the deficit. That is what we need to sort out. As I have said, the hon. Gentleman’s party itself recognised the need to cut public expenditure, which has to be at an affordable level.
While we have sought to engage the public in the debate about how we can recover from the economic crisis, rebalance our economy and rehabilitate ourselves from debt-driven policies, all that we have heard from the Opposition is what they do not like, and nothing about what they would do instead. They have said no to everything and yes to nothing, and they have kept quiet when asked how they would solve the problems that they have caused. It was one party that got us into this mess, and now two parties will have to get us out of it.
We have heard a lot of analogies today, but to my mind the Opposition are in denial: they are like a debt junkie. Like most junkies and addicts, they always want to solve the problem tomorrow. They want a reduction in the deficit tomorrow, growth in the private sector tomorrow, and fairness for those most in need tomorrow. We were never going to see any action from the Labour party, and over the course of this Budget debate we have heard shrill voices of despair from the Opposition Benches.
We have taken decisions that are right for this country—tackling our debt, kick-starting the private sector and taking action to take those on the lowest incomes out of income tax. Those choices are the right ones to start our country back on a credible path to sustainable recovery. We are encouraging enterprise and protecting those most in need, yet tackling the colossal debt left to us and to this country. This coalition Government are making decisions where Opposition Members did not have the courage, and I commend the Bill to the House.
Question put, That the Bill be now read the Third time.
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22:27 - The House divided: - Ayes: 0 / Noes: 0 - Question accordingly agreed to.
Mr Philip Hollobone (Kettering) (Con)
I beg to move,
That this House commends the Speaker on the action he has taken over the past year to reassert the principle that Ministers ought to make statements to the House before they are made elsewhere; notes that paragraph 9.1 of the Ministerial Code says that when Parliament is in session, the most important announcements of Government policy should be made in the first instance in Parliament; believes that compliance with this principle is essential for backbenchers to be able to represent the interests of their constituents and hold the Government to account; and invites the Procedure Committee to consider how the rules of the House could be better used or, if necessary, changed to ensure compliance with this principle and to develop a protocol for the release of information.
It is a rare privilege and honour for me to open this, the first of the Backbench Business Committee debates on the Floor of the House. We are honoured by your presence in the Chair this evening, Mr. Speaker. In this motion we do some important things. First, we commend you for the action that you have taken in ensuring that the Government get the message that important policy announcements should be made to Members of this House first and not to the wider media. In the motion, we draw attention to paragraph 9.1 of the ministerial code, which says exactly that. It says that:
“when Parliament is in session, the most important announcements of Government policy should be made in the first instance in Parliament”.
It also says that we believe that compliance with this principle is essential for Back Benchers to be able to best represent the interests of our constituents and hold the Government of the day to account. Constructively, we suggest that the Procedure Committee—I see the Chairman in his place—be invited to consider how the rules of the House could be better used, and if necessary changed, to ensure compliance with this principle and to develop a protocol for the release of information.
The Chamber of the House of Commons should be the centre of political public life in our country. It should not be an inconvenience for Ministers to come here and tell the country about important policy: it should be an honour and privilege to keep the information to themselves until they have told Members of this House. It should be a matter of professional pride, so to speak, that information is not put out into the wider ether until the representatives of the people are told first, in this Chamber. This is not a criticism only of the present Government, but a criticism of all Governments, Labour, Conservative and coalition, going back for some time.
The purpose of the motion is not only to make the point that this Chamber should be considered first and foremost in the minds of Ministers, but to be helpful to the Government so that the coalition sets a precedent by putting in place a set of procedures that will avoid the confusion that has obtained down the ages and, worryingly, has already been seen in the present Session. We need to get the system right to help all of us to represent the concerns of our constituents better.
Mr Greg Knight (East Yorkshire) (Con)
Does my hon. Friend agree that the problem has worsened with the advent of 24-hour news?
Mr Hollobone
I am most grateful for the helpful intervention from my right hon. Friend, the distinguished Chairman of the Procedure Committee. There are many benefits of 24-hour news coverage, although accuracy is not necessarily one of them—nor is undue pressure on Ministers to release information before the House is told. But that is no excuse for Ministers to fail to resist the temptation to get their message out before telling the House. I agree that it is an additional pressure, but it should not be an excuse.
The early release of information is not confined to the broadcast media age. In fact, we can go back to the infamous incident on 13 November 1947, when the then Chancellor of the Exchequer, Hugh Dalton, resigned a few hours after what he described as “a grave indiscretion” on his part. Some Members might not be familiar with this infamous case, so perhaps I can indulge the House for a moment by reminding them. There was the following exchange on the Floor of the Chamber: Mr Raikes raised a private notice question, which was the procedure in those days, and
“asked the Chancellor of the Exchequer whether he has considered the accurate forecast of the Budget proposals in a newspaper on sale at 3.45 p.m. yesterday, a copy of which has been sent to him, and if he will institute an inquiry into the source of the information.”
Very humbly, Mr Dalton, the Chancellor at the time, told the House:
“I very much regret to tell the House that the publication to which the hon. Member refers arose out of an incident which occurred as I was entering the Chamber to make my speech yesterday. In reply to questions put to me by the Lobby correspondent of the “Star” newspaper, I indicated to him the subject matter contained in the publication in question. I appreciate that this was a grave indiscretion on my part, for which I offer my deep apologies to the House.”—[Official Report, 13 November 1947; Vol. 444, c. 551.]
A few hours later, The Times reported Hugh Dalton’s resignation letter to the Prime Minister, in which Hugh Dalton wrote:
“In view of the incident which was raised to-day in the House, I think my duty to offer you my resignation”.
Meg Munn (Sheffield, Heeley) (Lab/Co-op)
That is a very interesting historical episode, and I thank the hon. Gentleman for telling us about it, but on that basis, has he worked out how many current Ministers would have had to resign?
Mr Hollobone
That is an extremely good point, and the answer is: all of them—and most of the previous Government as well. The basic point of my speech is that standards have been going downhill since 13 November 1947. Mr Dalton was clearly in the wrong, and he paid the ultimate political price, but what has been happening since is that Ministers of the Crown, under Conservative, Labour and coalition Governments, have been getting away with it. The purpose of today’s motion, in praising the Speaker for the steps he has taken, is to give the House the opportunity to say, “Enough is enough. We are going to do things differently in the future.”
Mr Wayne David (Caerphilly) (Lab)
Does the hon. Gentleman think that members of the Government who have leaked or given such information before the House has been informed were weak, or does he think that there has been a Government strategy to bring it about?
Mr Hollobone
It is probably both, to be fair. I am not moving this motion in a politically partisan way; I am moving it on behalf of my colleagues on the Backbench Business Committee and all Back-Bench Members, whatever parties they represent, in order to hold the people on the Front Bench to account for their behaviour. As a Back-Bench Member, I do not particularly care whether they are Conservative, coalition or Labour Ministers. Their first duty should be to report their new policy announcements on the Floor of the Chamber.
John Mann (Bassetlaw) (Lab)
The hon. Gentleman says he is speaking on behalf of all of us, so why is the motion pussyfooting around so much by referring the matter to another Committee? Why not propose that such Ministers be suspended? When the ceiling can take it, let us have these people suspended.
Mr Hollobone
I appreciate the hon. Gentleman’s point. I would say in answer to his question that it is a sensible way forward for the Procedure Committee to take evidence from hon. Members, and I suspect that he will be the first in the queue. The Chair of the Procedure Committee is here tonight to hear contributions from hon. Members. We can develop a sensible protocol that everyone can understand, including Ministers of Crown, and we can find a better way forward. I also say to the hon. Gentleman that the motion has been sitting on the Order Paper for some time, and if he had wanted to table an amendment, he would have been quite within his rights to do so.
Barry Gardiner (Brent North) (Lab)
The hon. Gentleman is making an excellent case, and I welcome how he is standing above party politics in order to do it. He mentioned the advent of 24-hour news. Does he similarly deprecate the fact that for once the news Galleries in this place are empty? There seems to be no appetite in the media for what the Chamber is trying to do in asserting the power of Parliament back over an overweening Executive.
Mr Hollobone
I thank the hon. Gentleman for that helpful intervention, although actually it was my right hon. Friend the Member for East Yorkshire (Mr. Knight), the Chair of the Procedure Committee, who made the point about 24-hour news media. However, the point made by the hon. Gentleman was spot on. The thrust of this motion, and the reason the Backbench Business Committee put it forward tonight, is that all too often the Press Gallery is empty. Why is it empty? It is because the media have generally heard about it all before we get to hear about it on the Floor of the House.
Pete Wishart (Perth and North Perthshire) (SNP)
I thank the hon. Gentleman for giving way—he is being generous with his time. He says that he is representing all Back-Bench Members, but he will know that we in the minority parties have famously been disqualified from standing for the Backbench Business Committee. I know that he and his colleagues have looked at this sympathetically, and the charming exercise by the Committee Chair, the hon. Member for North East Derbyshire (Natascha Engel), has persuaded us to come along this evening and participate in the debate. However, what does he have to say to me and the hon. Member for Foyle (Mark Durkan), who is sitting next to me, that would encourage us to take a part in the Committee?
Mr Hollobone
First, I agree that we have a charming Committee Chair, and she has gone out of her way to ensure that the minority parties are invited to the Committee to give their point of view. Indeed, we received a representation at a recent meeting to that effect. Certainly on behalf of the Chair I can say that the hon. Gentleman would be most welcome to attend at 7 o’clock on the first Monday of the September sitting, upstairs in Committee Room 16. We would be delighted to hear a representation from him about what business he would like to include in a future Back-Bench business debate.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
Does the hon. Gentleman not also need to recognise that the temptation that Ministers fall prey to is not merely the desire to get on the news, but the desire to present a more limited and selective account of the statement they are subsequently going to make at a point when it cannot be questioned by Members who might know quite a lot about the subject. That statement might be taken at face value by sometimes gullible journalists.
Mr Hollobone
My right hon. Friend is spot on. It is called spin. We in the House of Commons should be trying to un-spin things and ensuring that when statements are made to the House and new policy initiatives announced, we have the opportunity to fire in those questions. Actually, however, many of our constituents are beginning to say, “What is the point of having Members of Parliament, if you can read all about it in tomorrow’s newspapers?” The journalists are getting better access to Ministers about lots of policy announcements than we are in the House.
Harriett Baldwin (West Worcestershire) (Con)
I would like to make some observations as a new Back-Bench Member on the 24-hour media cycle. One of the things that strikes me is that, because the House does not sit on some days until 2.30 pm, the news media have ample opportunity to coax information out of Ministers that might be better given to the House. I, for one, would like to put it on the record that I would be very willing to come in and go home much earlier for sittings and have a much more family-friendly set of hours.
Mr Hollobone
That is a most helpful and excellent suggestion from my hon. Friend, and I am delighted that she has had the opportunity to make it. It would appear to most people outside this place that the hours we sit are in many ways absurd and certainly not family friendly. Furthermore, in many ways they are not the best hours for us to do good business in the House, and anything that would stop journalists getting information before hon. Members would need to be welcomed.
The hon. Member for Perth and North Perthshire (Pete Wishart) asked what comfort our Committee could offer minority parties. The invitation is open to the minority parties and every other Back Bencher: whatever party they might represent—this goes for independent Members too—they should come and tell the Committee what they would like to be discussed on the Floor of the House.
John Mann
It is very kind of the hon. Gentleman to invite us all to the meetings, but we elect people to represent us. If the Procedure Committee comes back with some wishy-washy, mealy-mouthed excuse of an answer to the question that has been put, how will the Backbench Business Committee represent us all properly and ensure that the issue that it has rightly raised is properly voted on by the House?
Mr Hollobone
The hon. Gentleman is talking about a hypothetical case. Knowing the Chairman of the Procedure Committee as I do—my right hon. Friend the Member for East Yorkshire—I think that wishy-washy is the last thing that any recommendation will be. I am also sure that you, Mr Speaker, will be taking a close interest in the work of the Procedure Committee and any motion that may come back to the House in due course, so I do not want the hon. Gentleman to be unduly worried about the process.
John Mann
I thank the hon. Gentleman for that, but the question of process is rather important. This is the first opportunity for the Backbench Business Committee to try to have some influence, yet the issue is being referred to another Committee of the House. We have seen this kind of thing before. If the Procedure Committee fails to come back with something sufficiently substantive, how will the Backbench Business Committee take the issue forward?
Mr Hollobone
I anticipate a substantive motion on the Floor of the House in due course to endorse the principle that we have to hold the Government to account by having a proper procedure for statements.
Mr Knight
On the point that has just been raised, it is entirely hypothetical at this stage, but I would expect that if this evening’s motion goes ahead and the Procedure Committee makes recommendations, those recommendations would come before the whole House. It would then be for the whole House to decide what to do, including the hon. Member for Bassetlaw (John Mann).
Mr Hollobone
I am sure that any motion that comes before the House will benefit from the contribution of the hon. Member for Bassetlaw (John Mann), because he has a lot to say on the issue, and quite rightly so. However, what I would say to him now is that the motion on the Order Paper this evening is not wishy-washy. We commend the Speaker on the brave steps that he has taken, we reassert the principle that Ministers ought to make statements to the House, and we note paragraph 9.1 of the ministerial code. We can vote on the motion this evening or we can accept it without going through the Division Lobbies. We will be in a far better place if the motion succeeds this evening than we were yesterday.
Andrew Selous (South West Bedfordshire) (Con)
My hon. Friend has been extremely generous in giving way. Does he agree that we will need to see a major shift in how the media do their business? It is not just the 24-hour news cycle; it seems that the local and national media expect to be given everything in advance. They ring us before we make a speech to ask us what will be in it. Does he agree that that has to change?
Mr Hollobone
That is a most helpful intervention, and I am grateful to my hon. Friend for making it. I have huge respect for those who work in news organisations. They have a difficult job to do and, by and large, they do it very well, whether in our local newspapers or as representatives of the national media. What I would say to my hon. Friend is that news is not really news anymore. In the olden days, news used to be about things that had happened; nowadays, news is about things that are anticipated will happen. Often, by the time the event actually takes place the news has moved on to something else. The broadcasters in particular, with the appetite for 24-hour coverage, are distorting the news picture and confusing a lot of our constituents.
Mr Peter Bone (Wellingborough) (Con)
I am grateful to my hon. Friend for giving way. He is making a powerful and historic speech that will go down in the annals of this great Parliament. The reason the hon. Member for Bassetlaw (John Mann) is unhappy is that there were no amendments to the motion from hon. Members, which is a shame. However, if he was minded to divide the House this evening because the motion did not go far enough, he would be giving all those Ministers who leak the opportunity to vote against it.
Mr Hollobone
There’s food for thought. My hon. Friend makes an excellent point.
Barry Gardiner
I rise simply to correct the assertion I made earlier that the Press Gallery was bereft. I have since noticed the not inconsiderable frame of one of the members of the press—I believe from the Jewish Chronicle—who—
Mr Speaker
Order. The hon. Gentleman entered the House with me in 1997, and he is aware of the normal custom that one does not refer to people outside the Chamber. I allowed a modest latitude for the hon. Member for Kettering (Mr Hollobone), because what he was saying was central to the thrust of the argument that he wished to develop, but to get into the business of identifying individual journalists is not good for the House, and it is probably not good for the egos of the journalists concerned either.
Mr Hollobone
I am grateful for your ruling, Mr Speaker. Should there be any members of the Press Gallery up there this evening, they should be commended on turning up, although as you know, the reputations of lots of members of the Press Gallery precedes them, whether they are here or not.
If you will forgive me, Mr Speaker, I got stuck in 1947, with the resignation of the then Chancellor of the Exchequer. However, to move on from that, the Library has produced some valuable intelligence on the issue of ministerial statements not being made correctly. I understand that in the 27 years since 1983, there have been 44 incidents on the Floor of the House when the Speaker or a Deputy Speaker has had to make a ruling about the pre-release of information. Indeed, I fully expect the total figure to be somewhat higher. We are therefore talking about a regular occurrence, and it is clearly difficult for any Government, of whatever colour, to get things right. That is why we now have an opportunity, with this new politics, to try to ensure that we have a protocol in place that everyone can understand and which it is far more difficult to fall foul of.
Even though the Backbench Business Committee is a new innovation, the issue of ministerial statements going wrong has been discussed on the Floor of the House and by Select Committees before. In February 2001, the Public Administration Committee conducted an inquiry into the ministerial code. Its findings make for interesting reading, so perhaps I could indulge the House for a moment by reading them:
“There is one respect in which the accountability requirements of Ministers in relation to Parliament have been weakened over the lifetime of the Ministerial Code. This concerns policy announcements to Parliament. The 1949 version of the Code provided that: ‘When Parliament is in session, important announcements of Government policy should be made, in the first instance, in Parliament.’ However, in…1997…the formulation has become: ‘When Parliament is in session, Ministers will want to bear in mind the desire of Parliament that the most important announcements of Government policy should be made, in the first instance, to Parliament.’ This represents a reduction in parliamentary accountability. We recommend that when the Ministerial Code is next revised the spirit of the original wording should be restored in respect of announcements of important Government policy.”
Basically, the Government of the day, having been ticked off, accepted that recommendation. However, my contention—and that of the Backbench Business Committee—is that despite being corrected by the Public Administration Committee in 2001, the procedure is still not clear enough to the Government of the day.
I have to say that I am extremely disappointed that the new coalition Government have got off to a bad start on the release of policy information to this House—I should also say that I would have said that whichever Government were now in power. The coalition Government got off to a bad start with the Queen’s Speech, which is an extremely poor place to get off to a bad start. The hon. Member for Rhondda (Chris Bryant) raised the matter in the House on a point of order on 25 May, when he said to you, Mr Speaker:
“You rightly used to excoriate Labour Ministers if ever we made announcements before making them to this House, so will you make sure that that lot over there do not announce things to the press—as they have done, day in, day out over the past 10 days—without first bringing them before this House?”
You, Sir, then said:
“This gives me the opportunity to say at the start of this new Parliament that I shall continue to expect, as I said two days after first being elected Speaker last June, that ‘Ministers ought to make key statements to the House before they are made elsewhere’… If they do otherwise, I—and, I am sure, the House—will expect to hear explanations and apologies as necessary.”—[Official Report, 25 May 2010; Vol. 510, c. 53.]
You have been as good as your word, Mr Speaker. The Backbench Business Committee—and, I hope, the whole House tonight—will praise you for that, because you insisted that Ministers who have not complied come to the Chamber to apologise to the House. [Interruption.] Yes, and rightly so. Why? Because we are, rightly or wrongly, elected by our constituents to be their representatives in this national Parliament; and if a Minister is deliberately or inadvertently releasing information before telling the people’s representatives, they should be called to this House to apologise. To the credit of the Ministers involved, even though they made a mistake with the pre-release of information, they have had the good grace to come here and apologise—and I now make a partisan point—unlike Ministers in the last Government, who never did so.
It is wholly appropriate for the Opposition of the day to hold Ministers to account for the release of information. That is part of the job of Opposition. However, that is also the job of all Back Benchers, whatever party we represent, and it is no use Government Members not being prepared to criticise Government Ministers because we are supposed to be on the same side. We have to think wider than that if we are to fulfil our proper roles as Back Benchers. We must have the guts to stand up and say to Ministers on our own side, if necessary, that this is not right and not the way to treat the House of Commons of the UK. We should encourage Ministers to take a professional pride in releasing information only to this House in the first instance.
Chris Bryant (Rhondda) (Lab)
The hon. Gentleman is making a very sensible speech, and I look forward to his promotion to the Conservative Front Bench in the very near future. Is not the problem the fact that there is not really any sanction? The worst possible sanction is that Mr Speaker says, “You have got to come and make an apology”, at the end of which not much happens. Would it not be better if we had a proper system of sanctions so that Ministers could, if they broke this code, be referred to the Committee on Standards and Privileges?
Mr Hollobone
The hon. Gentleman makes an excellent contribution, and I hope the Procedure Committee will take it into account. I am sure he would want to put the point that he just raised to that Committee.
Mr Hollobone
That is right: the hon. Member for Rhondda has seen things from both sides of the fence. I am sure he was very careful about the release of information when he was a Minister, and I am also sure that he appreciates how difficult it is—I understand this—for Ministers of the Crown to control the release of information when, over the years, this culture of news management has developed. In Government Departments and in political parties, there are spin doctors and advisers whose job it is to manage the news, but the message should go out to these people that they are getting in the way of our democracy. They are not the most important people in our democracy; the people’s representatives are the most important. All of us here can, in theory, bring Governments down if we have the guts to do so, and we should hold the Government of the day to account for their behaviour.
Robert Halfon (Harlow) (Con)
Would it not be a good idea to have statements delivered at the beginning of the day, so that there would be less chance of their falling into the news cycle? If they happened at the start of the day, they would set the agenda.
Mr Hollobone
My hon. Friend makes an extremely good point, which is not unrelated to the earlier intervention by my hon. Friend the Member for West Worcestershire (Harriett Baldwin). If the parliamentary day were shifted forward, it would clearly help regarding the danger of leaking information.
What we need is some iron resolve in Ministers of the Crown that when they make important decisions, they announce them to the people’s representatives first. They face all sorts of difficulties with that, but the message should go out from us tonight that we really want them to face up to them.
Stephen Pound (Ealing North) (Lab)
The hon. Gentleman is leading us gently to the place where I think he wants to take us, but on the question of meeting earlier and earlier—apart from the inevitable logic of having the House sitting just after midnight—what on earth would he do about the Sunday papers? Saturday sittings have not occurred since the 17th century, I believe, although I am sure that the hon. Member for Louth and Horncastle (Sir Peter Tapsell) will remind me.
Mr Hollobone
I do not detect a huge appetite for Saturday sittings, but if the hon. Gentleman wants to make that representation, he is perfectly entitled to do so. I recognise that there is a problem with the weekend media. Are we really saying that the media are so voracious in their desire for news and so powerful that Her Majesty’s Government are unable to resist them? If so, we are saying that our democracy is pretty hopeless.
Mr Hollobone
I do not think that would be enough, which is what is behind tonight’s motion. It is not for the Prime Minister alone to say these things; it is up to us in this House to assert our authority over the Prime Minister and other Ministers of the Crown. It is up to us collectively to say, “We are the House of Commons, rightly or wrongly, and all of us were elected by our constituents to hold the Government of the day to account.” It is not up to us, on matters like this, to take diktats from the Prime Minister. It is for us to say to Ministers, “If you have an announcement affecting the nation, we want to be told first”—not only because we were elected by the people to represent them, but because we can then question Ministers about the statements they make. If we get this right, it will raise the level and quality of statements because Ministers will know, as the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) said, that they cannot just spin things out to the media, as they have to come here and face our wrath first.
Mr David Nuttall (Bury North) (Con)
Does my hon. Friend agree that the real problem at the heart of the issue is the precise interpretation of the ministerial code, which states that “the most important announcements” have to be made “in the first instance” to Parliament? It is particularly the interpretation of “the most important announcements”, as opposed to announcements that affect the whole nation, as my hon. Friend said, that is critical. If it were to say “all announcements”, for example, there would be no doubt about it, and it would effect a change in Government policy. If that were to happen, it might go a long way towards resolving this problem.
Mr Hollobone
My hon. Friend makes an extremely good point, and I hope that he, too, makes a representation to the Procedure Committee. The difficulty that we all face is that if the Government were to make all announcements on the Floor of the House, there would not be much time left for other business—Government or otherwise. The difficulty is striking the right balance between the most important policy announcements and the others.
We saw a very good example of that today on the occasion of the urgent question about the Office for Tax Simplification. I am perfectly prepared to accept that the Exchequer Secretary had very good intentions in releasing a written ministerial statement, but as a humble Back Bencher I must express my personal view that on a day when we were discussing Treasury matters, it would have made sense for him to come to the House to make an oral statement.
The difficulty faced by my hon. Friend the Exchequer Secretary lay in the need to achieve the right balance between what is a really important statement and what is not. Today Mr Speaker rightly accepted an urgent question because he felt that it concerned a matter that he felt needed to be discussed on the Floor of the House. However, I think that if we can clarify the protocol, with the guidance of the Procedure Committee and input from hon. Members, the Exchequer Secretary, if faced with a similar situation in the future, will be crystal clear about what should be announced on the Floor of the House and what should be released in the form of a written ministerial statement. That is an illustration of the fact that the present system is not working properly.
Steve Baker (Wycombe) (Con)
I am put in mind of, I think, Pericles in Athens. He said that while only a few might originate a policy, anyone could judge it. Would my hon. Friend care to reflect on where we are more broadly in our country in terms of the internet? Nowadays, when a policy is announced anyone can indeed judge it, and can immediately start to communicate about it. Could my hon. Friend perhaps put that in the context of the House of Commons?
Mr Hollobone
My hon. Friend is clearly better educated than I, especially in the classics, and I commend him for that. He has also made a very good point. As well as 24-hour news media, we now have the internet and all its ramifications.
I do not particularly mind how people comment on Government policy announcements. I do not mind whether they do so by means of a written note, internet traffic or any other means, as long as the House hears about the policy first. I want the Press Gallery to be full. When an important announcement is made by, say, a Minister from the Department for Transport, the Press Gallery is full because members of the press want to hear the news on the Floor of the House first. When it is pre-released to the media, the Gallery is empty.
I have spoken for too long—[Hon. Members: “No, no!”] I shall take those expressions of mock affection as they were intended.
I want to end my speech not by being teacher’s pet, but by genuinely saying to you, Mr Speaker, that many of us who are in the Chamber and many Members who are not present genuinely admire what you have done with regard to statements. I want to reprise what you said two days after your election as Speaker, because I consider it to be important and a good base on which to proceed. On 24 June last year, Sir, you said:
“Just before we move on to the main business, I want to make a brief statement of just three points. First, as I said on Monday, when Ministers have key policy statements to make, the House must be the first to hear them, and they should not be released beforehand. Secondly, in statements, I ask the Front Benchers to stick to their allotted times. I also ask that the Back-Bench Members taking part each confine themselves to one, brief supplementary question. In the same vein, I hope that Ministers’ replies will be kept to a reasonable length. Finally, I always expect that those speaking in this Chamber will be heard, so that an atmosphere of calm, reasoned debate is maintained.”—[Official Report, 24 June 2009; Vol. 494, c. 797.]
It is possible that not all those boxes have been ticked—and if so, it is probably largely the fault of us Back Benchers—but your central point, Sir, about the need to ensure that policy announcements are made to the people’s representatives first on the Floor of the House, was absolutely spot on. It is the job of this motion, and of subsequent action, to ensure that we bring that about.
Alison Seabeck (Plymouth, Moor View) (Lab)
It is a pleasure to follow the hon. Member for Kettering (Mr Hollobone), who is and always has been a very assiduous Back Bencher. I am sure he can confirm to the House that he did not pre-brief the press on his speech.
We are debating an issue that is of real importance to the way in which the House, and thence our parliamentary democracy, functions. It is imperative for the debate not to be seen through the petty prism of party politics. This is not a partisan issue, and while attempts to portray it as such are understandable enough, given the general atmosphere in this place and the anger that can be generated among both MPs and our constituents when the ministerial code is broken, it would be wrong to do so.
Let me take up the theme initiated by the hon. Gentleman. A hallmark of your tenure thus far, Mr Speaker, is that you have acted to strengthen the role of the Back Bencher and have sought to reinforce the principles of the ministerial code, one of which is that important statements should be made here before they are made to the media. All too often, however, that convention is still flouted, and it is only through the granting of urgent questions that Members are able to represent their constituents’ interests in the face of an Executive who continue the age-old tradition of occasionally treating the House, and the Speaker, with discourtesy.
This is not a new problem, and I do not wish the debate to descend into a tit-for-tat event during which each side decries the other for having “started it first”. The issue has plagued the House under Governments of all colours—although I am pleased that the Liberals, who of course have not been in government until very recently, for once cannot play the “whiter than white” card. I am afraid that we are all implicated.
Announcements on the “Today” programme, to GMTV or to the newspapers are nothing new. Quite apart from the leaking of this year’s Budget, the Queen’s Speech and a raft of subsequent policies, our parliamentary history is littered with examples. In 1936—well before the 1947 leak—the Budget was leaked by Jimmy Thomas to another Conservative Member. He subsequently resigned not only his seat in the Cabinet, but his seat in the House.
Mr Bone
The hon. Lady is making a powerful speech. However, in that instance the Budget may not have been leaked. It is possible that there was an inadvertent interpretation of something that had been said. Even the suggestion that there had been a leak was enough for the Minister concerned to resign.
Alison Seabeck
Yes, indeed. It was a question of honour, and I think that we have lost a little of that.
As was mentioned by the hon. Member for Kettering, the 1947 Budget was famously leaked to the Star by the then Labour Chancellor, and the 1996 Budget somehow ended up in the hands of the Daily Mirror. As I have said, it is not a new problem; but it is a problem whose resolution is long overdue. We must take it upon ourselves, in this new Parliament, to ensure that the House is returned to the heart of substantive political life in this country.
I am not interested in the question of who has the worst track record, although it is useful to be able to draw on historical examples. I am interested in how we can bring the practice to an end. This was supposed to be the “clean slate” Parliament. A new Parliament with a large influx of new Members should have been able to start afresh. We have made many advances in the way in which we do things—I am thinking not least of the advent of a Committee devoted to Back-Bench business—but the continuation of the old way of doing things must be nipped in the bud.
The fact that Governments, Labour, Liberal and Tory, have leaked and pre-announced policy to the media in the past—advertently or inadvertently—does not give licence to the current incumbents to carry on in the same way. We are in the process of changing the balance of Parliament, so that it ceases to be a Parliament in which Back Benchers are here simply to cheer on their respective Front Benchers, and becomes one in which ministerial promotion is not seen as the sole career path, and in which Back Benchers can bring their experience to bear and ensure that their constituents’ interests are fully represented. We cannot do that if the House is not treated as the right and proper place for ministerial announcements and statements.
We all know that Ministers have a hard job to do. Working on red boxes at 2 am, as Ministers do in some of the busier Departments, is not fun, and mistakes do occur. Working in haste also leads to mistakes and poor scrutiny by Ministers of vital papers, as has happened in the last week or two. We must not mention the word “lists” too often. However, it is within the power of Ministers to prevent some of those mistakes from happening, and it is a shame—a real shame—that the Education Department’s Ministers did not check the detail of those lists more carefully. As has been pointed out, however, the Secretary of State had the good grace to apologise in person.
Back Benchers really should not have to sit by their radios every morning listening with bated breath to the “Today” programme while simultaneously channel-hopping across the various breakfast television media, simply to make certain that they know what is going on. Back Benchers ought to know that this House, and this House alone, is where statements are made, where policy will first be debated, and where their views will be heard before the media circus kicks off. The comments of the hon. Member for Kettering about the empty Press Gallery reinforce that point. If Ministers had to come to this House, those in the Press Gallery would be able to see the reaction of Back-Bench MPs and hear our constituents’ concerns being voiced directly. An empty Press Gallery is not a good sign.
Alison Seabeck
My hon. Friend is absolutely right and, if the motion is agreed to, it will be interesting to see how the Procedure Committee takes matters forward. I shall have some suggestions later in my comments as to exactly what some of the penalties might be.
Stephen Pound
My hon. Friend the Member for Rhondda (Chris Bryant) talked about sanctions, and my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) mentioned the case of J. H. Thomas. If I remember rightly, he was playing golf on the morning in question and made a joke about “Tee up”, which was interpreted to mean that there was going to be an additional duty on tea, which was correct. He was sued by the Thomas Lipton company because of the consequences for its shares. Does my hon. Friend the Member for Plymouth, Moor View agree that this is all about Ministers trying to control situations, and it is the control rather than the inadvertence that is the key to the issue? Does she also have sympathy for the point made by my hon. Friend the Member for Rhondda that this issue should, in fact, be referred to the Standards and Privileges Committee?
Alison Seabeck
I thank my hon. Friend for his, as always, incredibly well-informed comments.
Alison Seabeck
You don’t look a day over 21!
I agree that the precise nature of the sanction is an issue—and I have a proposal that may be thought of as somewhat flippant. My hon. Friend the Member for Rhondda is something of an expert, however, and I therefore think we should listen very carefully to what he has to say and to his proposals.
Sir Peter Soulsby (Leicester South) (Lab)
On the need to take this issue forward speedily and robustly, does my hon. Friend agree that it is a matter of considerable regret that the Procedure Committee has not yet been appointed, and will she join me in encouraging Members, particularly on the Opposition Benches, to make up the numbers so as to ensure that this can be dealt with properly? Perhaps my hon. Friend the Member for Bassetlaw (John Mann) might join us as a member of that Committee in order to ensure that it does, indeed, produce an early and robust response.
Alison Seabeck
I thank my hon. Friend for his remarks, and I am sure colleagues on both sides of the House will have heard what he had to say. It is to be hoped that a volunteer or two will come forward. The Committee should be set up as soon as possible, and he is right to say that it will be very difficult to proceed otherwise.
Back Benchers and the whole House ought to be the first to hear ministerial statements and policy announcements, and they should know that the only place for that will be either this place or the other place. That is a matter not only of constitutional convention and courtesy but of practicality. Members of this House should not have to be faced with phone calls from the media telling them what is going on in the outside world and asking for their views on events about which they have no knowledge. We have all experienced that and, apart from anything else, having to say, “I haven’t heard about that” is very embarrassing—nor does it give people confidence in our ability to do our job properly. That is certainly not a way to run a democracy, and I look to the Leader of the House to ensure that, in so far as his remit stretches, our democracy runs as well as it possibly can. I therefore hope he will commit to redoubling his efforts to bring Ministers to the Dispatch Box before they reach for the radio mike.
An excuse that has often been given is that the majority of the White Paper or statement was in fact revealed to the House and that only one or two of the main items have been released to the public—that is of relevance to a point made earlier about the precise wording of paragraph 9.1 of the ministerial code. That excuse is not good enough, because often the juicy bits of the White Paper or statement are leaked to the press and the House is left with the odds and sods—if I am allowed to use that term. [Interruption.] Yes, the bare bones might be a better phrase. My point is, however, that all of the contents should be saved for the Floor of the House.
Alison Seabeck
I am sure the hon. Gentleman is absolutely right, and I concur with that view. I do not imagine that any member of the Treasury-Bench team will be willing to defend the practice of pre-announcing policies or leaks to the media. If any of them are, however, then I am ready to give way and hear the rationale, but if they cannot defend the practice then they should not practise it.
Under a Labour Government, we had the release of difficult news under cover of a smokescreen of even worse news—“A good day to bury bad news” was a term used. However, that term was used by a special adviser, and although what she did was not technically out of order, she at least left her job as a consequence. Ministers need to learn some lessons from that.
John Mann
My hon. Friend has brought up a critical change that has taken place with complicity on both sides of the House, which is that the majority of special advisers appear, in fact, to be media advisers and press officers who advise on nothing special other than how to manage news. Is this not a problem that has now become deeply embedded in our politics, and which we could look at addressing?
Alison Seabeck
Yes, it is a problem, and strangely enough it is at its worst at the beginning of a new Government. When our party was elected to government in 1997, we had a lot of very good advisers who had been extraordinarily good in opposition at spinning stories out and making sure that shadow Ministers got their stories in the press. However, working with the civil service and Parliament in government involves a completely different mindset. We have to treat the two phases quite differently. A special adviser just chatting away to a media person and trying to get the nub of a story out—or spinning it out—from a Government position can have the sort of effect that we have seen, and which we are all here in the Chamber now objecting about, when a story appears in the press in advance of being announced in the House.
John Mann
Taking the Department for Transport, or whatever it might be called these days, as an example, is not the point that the concept of a special adviser suggests someone who is highly specialist and gives advice on transport, not somebody who is highly specialist and gives advice on news management? Even if Ministers are held to greater account by the House, it is that feature of special advisers that is so embedded in our system, as is the concept of their spinning to the media. After all, that is precisely what these people are paid to do.
Alison Seabeck
I thank my hon. Friend for that intervention. To be fair to special advisers and to Ministers who employ them, they are not all of that ilk; there are within government, as there certainly were within our Government, very specialist people in the particular spheres in which they work.
Unfortunately, despite the risk of being chastised by you, Mr Speaker, and your predecessors, it has been difficult to bring both the current Government and the previous one to heel on some of these issues. Although apologies have been made, sanctions should be considered. I hope that the Chairman of the Procedure Committee is listening to these comments, which I am sure will be reinforced later in the debate. What is an appropriate punishment for Ministers? Perhaps we should make them deliver the apology on their knees at the Bar of the House.
I shall stop being frivolous, because this is a serious issue and one on which the Government were elected. All parties stood for cleaning up Parliament, modernising this House and listening to Back-Bench MPs, and the Government were elected on that. It might therefore be appropriate for the Procedure Committee to consider insisting that the Prime Minister come to the House to apologise in person every time one of his Ministers pre-announces something. The thought of a Prime Minister having to come to the Dispatch Box on a regular basis to apologise for the actions of members of his team would help to focus minds. Such an approach would make him force his Front Benchers to behave, because that would not be good for his business or for his image.
Barry Gardiner
Does my hon. Friend agree that, given the extent of leaks from both parties when they have been in government, the fact that the leaks have continued signals either that the Prime Minister does not have authority over his Cabinet or that he refuses to implement that authority?
Alison Seabeck
I agree with my hon. Friend.
The motion states that we need a “protocol” that Ministers will abide by and, as Back Benchers, we should expect that to happen. As my hon. Friend the Member for Bassetlaw (John Mann) says, it has to have teeth. There will be an expectation that the Procedure Committee will take this forward and we will expect serious proposals to be made. If they are not, we should revisit this issue because it is incredibly serious. We have heard all the talk about new politics, but I think we should have some action. Let us see Ministers acknowledge the respect with which this House ought to be treated and see an end to policy announcements in the breakfast media.
Mr Greg Knight (East Yorkshire) (Con)
I welcome the fact that we are debating this motion tonight and that we now have a Backbench Business Committee in place. This reform has been a long time coming—the idea that the House of Commons should control its own timetable was first set out in the 1590s by someone called Robert Parsons. So it has taken more than 400 years since the idea was first mooted for it to become a reality. That is hardly speedy progress, even by parliamentary standards.
The call by Robert Parsons for the Commons to take control of its own agenda and assert its historic role as the fount of all public law fell on deaf ears at the time. But the call in 2009 by the Committee on Reform of the House of Commons, to which I was pleased to have been elected a member, has been more successful. I am delighted that we now have a Backbench Business Committee in place at long last.
I congratulate my hon. Friend the Member for Kettering (Mr Hollobone) on his speech and the Chair and members of the Backbench Business Committee on bringing forward this motion tonight. We have heard a number of quotes about what you have said since you took the Chair, Mr Speaker, but you have been consistent. Before you took the Chair, you said, when expressing your own views on this subject, that
“once and for all, Ministers must be obliged to make key policy statements here.”—[Official Report, 22 June 2009; Vol. 494, c. 624.]
As with so many of your pronouncements, Mr Speaker, who could disagree with that? I certainly do not. So I support the motion and, if the House agrees, I would be very pleased to see that it is properly considered by the Procedure Committee, which I chair.
I know from his interventions that the hon. Member for Bassetlaw (John Mann) does not want to see a wishy-washy report. The basis on which I support this motion and will be inviting the Procedure Committee to investigate the matter is my belief that this problem should be addressed and we need ways to deal with it. We have heard mention of the ministerial code, but one of the problems with it is that it is not policed by the House but by the Prime Minister. The hon. Member for Brent North (Barry Gardiner) touched on what has been the problem in the past—Prime Ministers have perhaps not been as attentive to the ministerial code as they should have been. The hon. Member for Rhondda (Chris Bryant) mentioned sanctions. If the House approves the motion tonight, I anticipate that sanctions will be considered as part of the inquiry that the Procedure Committee would wish to pursue.
I intend to be brief this evening, because I believe that it would be inappropriate for me to take a position on what our conclusions ought to be. If the House agrees to the motion, the Committee that I chair will deliberate, assess and then judge the appropriate way forward and will then, very likely, make a number of recommendations to the House. I have long believed that it is extremely important that one should not be an advocate if one is also to be a judge.
Mr Hollobone
It is a shame, if I may say so, that my right hon. Friend intends to make a short speech, because he is off to a good start. Would it be his intention, when his Committee meets, for this to be the first item of business to be discussed? Does he anticipate bringing back his findings to the House according to a speedy timetable?
Mr Knight
I certainly intend to suggest to the Committee that this should be the first item to be pursued and, if it takes my advice, I hope that it will agree to deal with the matter with all due speed. It is not appropriate for me to pontificate this evening on the detail of the line of that investigation. Instead, I would prefer to remain present throughout the debate to listen to and reflect on the views expressed by the House.
This is a good motion, but the subject at issue is one that, as the motion itself accepts, needs the full and rigorous examination of a Select Committee inquiry. I hope that the House will allow that inquiry to take place.
Kate Green (Stretford and Urmston) (Lab)
I am pleased to have the opportunity to speak in this debate tonight and to give the perspective of a new Member of the House who has spent the past 11 weeks trying to make sense of what has been going on. I am tremendously grateful—I know that I speak for other new Members—for the welcome that we have had from right hon. and hon. Members and from the staff of the House. However, I regret to say that that welcome is not sufficient to enable us as new Members to feel that we can do the job effectively, as our constituents expect us to from day one. As someone who knew a bit about the House before I was elected to represent the constituency that I now have the privilege to represent, I have found it difficult to navigate Parliament geographically and procedurally. I welcome this debate, not just in its own narrow terms but as the means to open up a discussion about a modern and well-informed Parliament.
All this matters so much not because of some abstract debate about the importance of the Commons, notions of procedure or ideas of self-importance—to which many of us are prone, I guess—but because this Government, in common with preceding Governments, are proposing to make massive changes to our welfare state that will have a significant impact on the lives of my constituents. Such changes to our system of social support must be fully debated with the benefit of the best information and understanding.
Already, in only a few weeks, the introduction of new legislation such as the Academies Bill and the launch of the White Paper on the national health service have revealed the scale of the changes that I have described, as will the future proposals on welfare reform and pensions reform. They are not theoretical or empty political gestures of change but fundamental changes to the quality of my constituents’ lives.
I hope that the motion will open up a debate about how we can do government better and more effectively. For me, that means that the new politics require a modern Parliament. Many of the issues that hon. Members have touched on would help us to become that more modern Parliament. Many of the parliamentary instruments and devices that we are encouraged to use are, from the point of view of the newcomer at least, opaque and unwieldy at best. My concern is that we should be well informed, that matters should be well scrutinised and that we should have time to consider properly the absolutely vital issues that we are rightly debating and addressing in the House. That means that when statements are made and legislation is brought before the House, they must be in a form that enables hon. Members to consider them properly, fully and appropriately in terms of the time available and the extent of the information that is laid before us.
That point was made repeatedly and from both sides of the House in yesterday’s debate on the Academies Bill. As my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) has said, measures that are brought forward in haste and without adequate scrutiny turn out to be poor when we have to live with them. Given the scale of the changes and the ambitions of the coalition Government, it is important that we should have time to reflect on the proposed changes. We are being asked to respond and to legislate before the detail is properly filled in. There is a lack of opportunity both inside and beyond the House for informed debate. Welcome steps have been taken to improve that—I particularly welcome knowing the date of the spending review in advance as well as the first steps that have been taken in the Budget Red Book to try to open up some of the impact assessments—but there is still a long way to go.
Robert Halfon
You mentioned that because of all the big legislation coming through, it is important that Parliament has the right powers, and of course I agree with you, but do you agree that under the last Government there were also very big legislative measures and that Parliament was then neutered by programme motions and having only one question time a week instead of two? Do you agree—
Mr Speaker
Order. The intervention is a little on the long side. May I very gently say to the hon. Gentleman that I did not mention anything and that I am not agreeing with anyone? I call Kate Green.
Kate Green
I am grateful to the hon. Gentleman for his comments. In common with all the hon. Members who have spoken this evening, I am anxious that this should not be a partisan debate. I was not in the House during Labour’s terms of government, but I was certainly aware of many of the proposals and debates that were brought forward and we often lamented how they came at us out of nowhere, without proper time for input and consideration. I certainly hope that we will start to see some changes coming from all the political parties. I know that would be warmly welcomed by informed opinion outside the House.
Robert Halfon
I thank the hon. Lady for giving way again. What I wanted to ask is whether she agreed that there has already been some progress in that we are having this debate at all, in that there is now a Backbench Committee with an elected Chairman and in that we now have elected members and Chairmen of Select Committees? In some ways, the Government are giving powers back to Parliament.
Kate Green
It is right that the House has begun to take on more powers that improve the democratisation of processes, but I do not think that is a consequence of one particular Government, as there has been pressure from Back Benchers as a whole. Also, the steps taken so far have been relatively limited. To sit back now and be complacent about what has been achieved under the first few weeks of this Government would be a very serious limitation on where I suggest we ought to go as a House.
In conclusion, I support the thrust of the motion, but I hope that it is only the beginning of the debate. I believe that I have been elected to do the best I can for my constituents, and the provision of timely, comprehensive information is key to enabling me to do that.
The Leader of the House of Commons (Sir George Young)
It is a pleasure to follow the hon. Member for Stretford and Urmston (Kate Green), who made a thoughtful speech about the need for a modern and well-informed House. On her remarks, it is indeed our ambition to have a legislative programme that is well prepared when the Bills are introduced and that is of a size that the House can easily digest, and it is our intention that the House should have an opportunity, which it did not always have in the last Parliament, to consider the legislation seriously and without undue pressure.
It is a pleasure to intervene briefly in the first debate initiated by the new Backbench Business Committee. This is the first time that the House has had an opportunity to debate a substantive motion on a subject tabled by a Back Bencher since the old system of private Members’ motions was abolished in 1995. My right hon. Friend the Member for East Yorkshire (Mr Knight) went a little further back in history to the Jesuit, Robert Parsons, to identify the source of the Backbench Business Committee. I do not want to prejudice the consensual nature of the debate by complaining too loudly of the last Government’s failure to set up that Committee. It would be uncharitable to blame even the last Leader of the House for making slow progress on an idea that appears to have been some four centuries in the making.
I pay tribute to the energetic way that the hon. Member for North East Derbyshire (Natascha Engel) has set up the Committee and hit the ground running. I said in the last Parliament that I wanted the Backbench Business Committee to set the first topical debate of this Parliament. In fact, it has done better than that and chosen a subject for a full three-hour debate, and I am delighted that progress is being made. Restoring public confidence in Parliament is one of the ambitions of the coalition. Enabling Parliament to do its job effectively is a key part of that process, and giving the Backbench Business Committee its agenda-setting powers is a major milestone in doing that.
Turning to the motion, allegations that the Government make announcements to the media before making them to the House are not new. This is my 10th Parliament, and I can remember occasions in every preceding one when one of the six Speakers who have sat in the Chair, beginning with Selwyn Lloyd, have rebuked Ministers for continuing that practice. As we have heard, Mr Speaker, you made it clear in your very first statement that
“when Ministers have key policy statements to make, the House must be the first to hear them, and they should not be released beforehand.”—[Official Report, 24 June 2009; Vol. 494, c. 797.]
I commend my hon. Friend the Member for Kettering (Mr Hollobone) on a first-class speech in moving the motion. If I may say so, he was a little bit tough on those who sit on the Treasury Bench in implying that every Minister in the coalition Government should resign because they had all leaked information to the press, but otherwise, he made his case forcefully and convincingly. There is little doubt that, over perhaps the last 13 years, we have seen a more cavalier approach to the way in which announcements are made than previously. In 1998, the then Speaker felt strongly enough about the Labour Government’s consistent and deliberate leaks that she gave a BBC interview outlining her frustration that, although successive Governments had briefed the press before Parliament, it was being done
“far more subtly and professionally”
since the 1997 election.
As my hon. Friend the Member for Kettering and, indeed, other hon. Members have said, Parliament pays a price for that process. We devalue ourselves if the news is being made elsewhere. We therefore risk losing our position as the centre of British national debate. That is surely why the principle that we are debating today is important. The hon. Member for Stretford and Urmston touched on that principle. Again, it was well put by Speaker Boothroyd who said in her farewell address:
“This is the chief forum of the nation—today, tomorrow and, I hope, for ever.”—[Official Report, 26 July 2000; Vol. 354, c. 1114.]
We are elected here to scrutinise the Executive and to hold Ministers to account on behalf of our constituents. It is therefore crucial that Ministers explain and justify their policies in the Chamber in the first instance.
Sir George Young
It was a serious offence before this debate and it will remain a serious offence afterwards.
The Government await with interest the recommendations of the Procedure Committee, especially in relation to the ministerial code, which has already been cited. Among other things, the code provides:
“When Parliament is in session, the most important announcements of Government policy should be made in the first instance, in Parliament.”
Since the start of this Parliament, the Government have made 20 oral statements and 189 written statements, which is an average since the Queen’s Speech of nearly three oral statements per sitting week and nearly seven written statements per sitting day. On top of that, we have answered five urgent questions. In this Parliament, there have already been a total of 214 announcements to the House over 30 sitting days, so I hope that the House accepts that as evidence that the Government take the code seriously.
Even with the best endeavours, as we have heard, leaks to the media can occur before announcements are made to the House and without the connivance of Ministers. For example, as the hon. Member for Plymouth, Moor View (Alison Seabeck) said, the whole of the 1996 Budget found its way to the Daily Mirror. The then Chancellor decided that there was nothing much that he could do about it and took his whole team to an Indian restaurant—a characteristic response from my right hon. and learned Friend the Justice Secretary. As my hon. Friend the Member for Kettering said, when things have gone wrong in this Parliament, Ministers have come to apologise.
The code says that the “most important announcements” should be made first to Parliament, but as we heard earlier, that gives rise to the question of what the most important announcements are—perhaps the Procedure Committee would like to address that point. However, it is worth pointing out that the code should not prevent Ministers from making observations or comments about policies that have already been announced, and nor should it mean that we cannot make speeches or give interviews outside the House. My right hon. Friend the Secretary of State for Business, Innovation and Skills was criticised last week for comments that he made about the graduate tax in a television interview, but as I told the House last Thursday, there was no policy change because the question of a graduate tax had already been referred to Lord Browne’s review by the previous Government. In my view, my right hon. Friend was taking part in the entirely legitimate debate that is developing outside the House.
Stephen Pound
Not for the first time, the right hon. Gentleman is shining the light of clarity on the particular problem before us. He talked about the seven or eight written statements that are released each day and the many oral statements, but how on earth can we come to a situation in which somebody somewhere is tasked with deciding what is “the most important”? A written ministerial statement was made today on the 2013 review of the Rural Payments Agency, but I would say that that is probably not the most important—[Interruption.] I am sorry; I mean in the scale of things to be reported to the House. Will the right hon. Gentleman consider introducing a system such as colour coding under which we could have different gradations of statement, meaning that some could be laid before the House while others would have to be presented from the Dispatch Box?
Sir George Young
I accept the argument that we need a gradation. In a sense, we have that already because we have oral statements and then written ministerial statements, and then I suppose we have press releases put out by Departments. However, it would be helpful if the Procedure Committee could shed some light on the key question of what should trigger the obligation for a Minister to make an oral statement to the House about a major announcement of policy because Ministers, more than anyone else, are anxious to stay within the rules.
The debate gives us the opportunity to stand back and think radically about statements and their role in our agenda. Going back a few decades, the Government made statements to the House because that was the prime means of distributing information to the nation. Life today could not be more different. There are more platforms than ever for the Government and others to communicate with individuals or communities, so the terms of trade have completely changed. It is right for the Procedure Committee to have a fresh look at the rules, which is why I will support the motion.
If the motion is agreed, I propose to submit a memorandum of evidence to the Procedure Committee on behalf of the Government, and at this point I would like to make a point that has not been raised before. In the past three Parliaments, such an inquiry would probably have been carried out by the Modernisation Committee. That Committee was chaired by the Leader of the House, and if that had been the route by which a recommendation had been agreed, the Leader of the House would have submitted a report to the House of Commons. One only has to think about that for 30 seconds to realise that that is entirely the wrong way to set about the issue. That is why it was absolutely right at the beginning of this Parliament not to re-establish the Modernisation Committee, chaired by the Leader of the House, but to ask the Procedure Committee to take on board agendas that the Modernisation Committee would previously have taken.
Let me briefly touch on a few ideas that the Procedure Committee might look at. The Wright Committee said that statements could be taken at a different point in the parliamentary day, and one has to ask whether 12.30 pm or 3.30 pm are the only times for statements. Is there a way of insulating time taken for statements from the time allocated to the business of the House? For example, Governments are sometimes reluctant to make statements on Opposition days because that eats into the time to which the Opposition are entitled. Could statements be shortened by having a yet tighter limit on the time that Ministers’ take, or by releasing the text and relevant papers in advance so that the House might proceed to question the Secretary of State, rather than have the statement read out?
It would also be helpful if the Procedure Committee were to consider whether the earliest opportunity for issuing written statements might be brought forward. Not everyone is on the estate by 9.30 am, but I am sure that a good number are in their offices even earlier than that, and if the timing of written statements is brought forward, it should be accompanied by a system of making those statements available to Members either electronically, by e-mail, or by posting them on the parliamentary intranet. To put that into context, Select Committees release many of their reports at one minute past midnight.
Finally, I have already given a commitment to consider new procedures for the launching of Select Committee reports on the Floor of the House. There is no reason why Ministers should have a monopoly on making statements to the House; Select Committee Chairs should also have that privilege. I had intended to write to my right hon. Friend the Member for East Yorkshire (Mr Knight), inviting the Procedure Committee to consider how that recommendation could be implemented. However, as the proposal has something of the nature of a ministerial statement, perhaps the Procedure Committee will be able to include it in the scope of the inquiry that is before the House this evening.
Sir George Young
My hon. Friend makes a good point. I think that we have done that once during this Parliament, but I agree that it would be helpful if, so far as is possible, the House were given advance notice that a Minister proposed to make an oral statement.
I hope to be able on Thursday to make further announcements about time for Back Benchers’ debates. Those debates are part of a process of moving towards a fully established House Committee, which we are committed to establishing in three years’ time. Together with other reforms that either have been recently introduced or are under consideration, they will make this Parliament one where the terms of trade tilt back towards Parliament and away from the Executive, and oblige the Government to raise their game. This Government welcome that challenge.
Ms Rosie Winterton (Doncaster Central) (Lab)
This is an historic debate, and I pay tribute to my hon. Friend the Member for North East Derbyshire (Natascha Engel) for chairing the Backbench Business Committee, and thus helping to bring forward the subject of this debate. It is an excellent subject, because it goes straight to the heart of the relationship between Parliament and the Executive—and inevitably, as hon. Members have already pointed out, the relationship between Parliament, the Executive and what are nowadays the 24-hour media.
I congratulate the hon. Member for Hollobone—[Laughter.] Sorry, not Hollobone. It is Mr Hollobone, the Member for—[Interruption.] Kettering. Mr Kettering, the Member for Hollobone—brilliant. He made a very good opening speech, and, as the current Deputy Leader of the House said before the election, Ministers should remember that
“their first responsibility in terms of information is to the House and nowhere else”.—[Official Report, 3 July 1998; Vol. 315, c. 657.]
The Leader of the House also once said that leaks were a
“short circuit of the system”.—[Official Report, 12 July 1999; Vol. 335, c. 28.]
It is also true that Members have claimed that all Governments have been guilty of bypassing Parliament. I am being entirely helpful and non-partisan when I say that the Government have managed to pack some spectacular examples into their 10 short weeks of power. As the hon. Member for Kettering said, that is not a good start, and as my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck) said, we need to remind ourselves of such issues.
I merely want to help hon. Members—particularly the hon. Member for Kettering, as he puts together his resignation list. The Home Secretary was forced to come to the House to apologise for giving the media a statement on the immigration cap that was meant for the House. The Secretary of State for Education briefed his plans for schools to the media, then, as we know, was forced to apologise for inaccuracies; I think there were five revised lists in the end. The Secretary of State for Health briefed the media on the NHS operating framework and on NHS reorganisation. Downing street seems to have briefed the entire Queen’s Speech to the media. Meanwhile, the Secretary of State for Justice briefed on prison reform and the Chancellor of the Exchequer briefed on spending cuts, financial reform and specific figures in the Budget. Today, an urgent question meant that a Treasury Minister had to come to the House to explain the structure and approach of the Office of Tax Simplification.
Adam Afriyie (Windsor) (Con)
Has the right hon. Lady got a dossier on the number of leaks from the previous Labour Government? Does she have a number to compare with?
Ms Winterton
I do not have an exact number, but I do not think that the previous Government gave a statement meant for the House—an actual, written statement—to the media in advance. Furthermore, the leaks of the specific Budget figures and the entire Queen’s Speech were pretty spectacular.
All that shows that there is much work to do. That is why I welcome the motion, and the fact that the Leader of the House has indicated his support. The motion rightly refers to the action that you, Mr Speaker, have taken to make it clear to Ministers that they should make statements to the House before they are made elsewhere. Right hon. and hon. Members’ welcome for that has already been reflected in the debate.
The motion also refers to the ministerial code and the rules of the House. I am sure that the Procedure Committee will want to look at whether the code and the relevant House rules reflect the reality of the pressure of the 24-hour media. That issue has already been touched on. How can we ensure that Ministers are not tempted to try to fit in with the media timetable rather than the parliamentary timetable? Some interesting suggestions have been made about meeting earlier, but unless we can get Ministers out of the “Today” studios, we will have to start meeting at about 5 in the morning. We need to consider that issue closely, but I certainly welcome the fact that the right hon. Member for East Yorkshire (Mr Knight) has said that the Procedure Committee will get full scale on to the matter.
We should also face the fact that there are those in the media who think that they are perfectly capable of cross-examining Ministers, so what is all the fuss about Parliament? However, as the motion says, it is essential for our democracy that Back Benchers—and, I would add, Opposition Front Benchers—should be able to hold the Government to account and quiz Ministers on what Government policy will mean for their constituents. I am not thinking of how journalists might quiz Ministers; Members have knowledge of how policies will translate at constituency level.
The fiasco over Building Schools for the Future was properly exposed only because Members of Parliament—on both sides of the House—looked closely at the numerous lists that were produced, and in many cases spotted the mistakes. That was an important part of the role of Members of Parliament in coming forward to Ministers and asking and probing them about things. I predict that exactly the same will happen in relation to some of the changes proposed in the NHS when they are examined closely in practice at constituency level. As my hon. Friend the Member for Stretford and Urmston (Kate Green) said, these are huge policy changes that will hugely affect our constituents, and Members rightly want the opportunity to quiz Ministers as soon as they are announced.
With the Conservative-Liberal Democrat Government, it is even more important for us to hear announcements here, because we have a coalition agreement that is pulling together policies from two manifestos, sometimes with a bit more put in, sometimes with a bit left out, so it is often unclear whether a policy was one that people voted for or one that was part of the coalition agreement. That adds a new dimension to what we are discussing.
We welcome the idea that the Procedure Committee should look into whether the rules of the House could be better used or changed to ensure that Ministers make statements here. Following the speech by the right hon. Member for East Yorkshire, I have great faith that he is going to look into that thoroughly, perhaps even with the help of my hon. Friend the Member for Bassetlaw (John Mann).
I hope that the Committee can also consider the issue of Ministers making statements in the House, but then retracting them outside without necessarily coming back to the House to do so. Earlier today, we heard my right hon. Friend the shadow Secretary of State for Business, Innovation and Skills raise a point of order about an example of this. In the House, the Deputy Prime Minister and the Prime Minister accused the directors of Sheffield Forgemasters of being unwilling to dilute their shareholding and said that that was one of the reasons why the Government cancelled the £80 million loan. However, the Deputy Prime Minister has since written to the chief executive of Forgemasters acknowledging that he knew that the chief executive had offered to dilute his shareholding. It seems that we have no ability to ensure that either the Deputy Prime Minister or the Prime Minister must come to the House to withdraw their previous comments. Perhaps the Committee could provide guidance on that.
I welcome the support that the Leader of the House has given to the motion. I hope that in the meantime, before the Procedure Committee makes any recommendations, he will impress on Ministers the need to come to the House before announcements are made elsewhere. I hope that this excellent debate will emphasise to Ministers that Back Benchers—and, for that matter, Opposition Front Benchers—regard this as a crucial issue for Parliament. It is not just about keeping MPs happy; it is about a vital way for us to represent our constituents. In that spirit, we should all thank the Backbench Business Committee for making this the subject of its first debate, and thank the hon. Member for Kettering for the motion before us.
Mr Speaker
Order. It might be helpful to the House if I remind Members that this debate has to conclude no later than 10.34 pm, so we have 85 minutes left. The debate will, very properly, be wound up by the Chair of the Backbench Business Committee. I have had indications from seven further Members that they wish to contribute; right hon. and hon. Members are quite capable of doing the arithmetic for themselves.
John Hemming (Birmingham, Yardley) (LD)
Thank you, Mr Speaker; I make that about 10 minutes.
What is interesting about the current situation is that if the Procedure Committee comes up with proposals for change, it will not have to beg the Government for time to have them debated but can simply pass them to the Backbench Business Committee so that it can table a substantive resolution to change the rules of Parliament. That system, which most representative bodies have, is a key change.
The Leader of the House was entirely right not to recreate the Modernisation Committee, not least because it was the wrong process: Parliament, not the Government, should run Parliament. I was on the Modernisation Committee. I like these procedural matters, and I happen to be on both the Backbench Business Committee and the Procedure Committee, not because I am a glutton for punishment so much as because procedure is the key way of enabling us to do things.
My memory may not be entirely right, but I believe that the last time the Modernisation Committee met was some time in late 2008. The Opposition’s view was that at that point Parliament was modern, so there was no reason for the Committee to continue meeting, and it ceased some time before the general election. However, we are now in a situation in which Parliament can assert itself to take power on behalf of the electorate. That is the key change. We are the voice of the people, and it is our job to do that.
Other changes will come through. One matter that the Procedure Committee considered in the previous Parliament was what we do when the Government fail to answer a written parliamentary question. Under the previous system we could either ask it again, which did not generally work very well, or put in a freedom of information request. That was an absurd situation, and the Procedure Committee decided to establish a process whereby hon. Members could go to that Committee and say, “This question has been inadequately answered.” I hope that we will consider that matter as the second item on the agenda, because I agree with the right hon. Member for East Yorkshire (Mr Knight) that Parliament has to reassert itself.
I would go a bit further than that. We need to recognise that according to article 13 of the basic constitutional law of the UK, the Bill of Rights, Parliament is here to redress all grievances. That means that we are here to speak on behalf of our citizens wherever problems exist, whether they be in this country or around the world, in the judicial system or in the Executive. Over time we might move more towards the separation of powers, or we might simply stay as we are, but it is crucial for Parliament to assert itself as the voice of the people, and in doing so, bring Parliament closer to the people.
That requires relatively nuisance-like people such as me to do things that are perhaps not exactly what our party would like us to do—especially with mine in a coalition Government—and to raise embarrassing matters. That actually strengthens the whole process of government, because when we ask difficult questions it may mean that civil servants are empowered to say to the Government, “Well, actually, this isn’t necessarily something that you should do. Perhaps if you do it slightly differently, that will be a better way of running the country.”
I have often described the way in which we run this country as like driving a car and trying to avoid a car crash by looking in the rear view mirror at the car crash that happened two years ago. Many times when things go wrong in this country there is complete quiet. Then, after a year, a lot of people make a bit of noise but nothing happens. After a bit longer even more people make a noise and there is an inquiry, which finds that there was a real disaster some years before. Parliament needs to get more upstream in that process, so that problems are raised in Parliament as they arise and the Government answer, giving the truth about what is happening.
One thing that shocked me when I came to the House from Birmingham city council was how out of date the information to which parliamentarians had access was. Even as an opposition member of the city council I was used to knowing—
Mr Speaker
Order. It is always a pleasure to listen to the hon. Gentleman, but I must ask him to focus on the terms of the motion, specifically the question of information on Government statements and ministerial accountability to the House for statements made.
John Hemming
Thank you, Mr Speaker
This is about questions and information. The reality is that we are now moving towards improving how the House holds the Government to account. Like the right hon. Member for East Yorkshire, I should avoid going into too many details on the possibilities, because I still hope to be on the Procedure Committee—if it is ever set up. If the Opposition are interested in matters of procedure and if they cannot find Labour Members to sit on that Committee, why cannot the hon. Member for Perth and North Perthshire (Pete Wishart), who is a musician, replace another musician and former Labour Member who was defeated at the election? We need to constitute the Procedure Committee.
Sir Peter Soulsby
I had the pleasure of serving with the hon. Gentleman on both the Modernisation Committee and the Procedure Committee, and I share his frustration that the latter has not yet been established. Given the importance of the matter before us, does he agree that it is vital that that Committee be established, and up and running, before the summer recess?
John Hemming
That is crucial. If the Labour party cannot find someone in its midst to sit on that Committee, it should approach the minority parties. I am sure that a minority party Member would like to do so. The minority parties often complain that they are unable to sit on Select Committees.
John Hemming
That is excellent news. If the House is to refer something to the Procedure Committee, it would help if that Committee existed. That brings me to the point made by the hon. Member for Bassetlaw (John Mann), which is that this matter requires detailed consideration—we cannot simply pass a resolution and sort everything out.
We need to identify the details and a protocol, and Ministers need guidance on what is sufficiently important to warrant this or that process. We need guidance on when information should be released and made available to the outside world and hon. Members via e-mail or the Vote Office. I do not know exactly how long it takes for information that is placed in the Library to be put on the website. Many important issues need to be considered, as we saw in connection with the Building Schools for the Future announcement, when questions were asked about when information ought to have been released. Such questions must be dealt with in great detail.
If Ministers do not wish to follow the guidance, we must think about sanctions. Obviously, we have the power under our inherent jurisdiction over contempt of Parliament to refer Ministers to the Standards and Privileges Committee. Many strange sentences have been passed for such contempt in the past, such as sitting on a horse backwards or getting locked up in Big Ben. We need not necessarily go that far, but we need some form of sanction. We need to look at all the processes that ensure that the House can operate as the voice of the people.
I have come roughly to the end of my 10 minutes. As a member of the Backbench Business Committee and a former member of the Procedure Committee, I am very pleased to see this first substantive motion. It has been driven by Back Benchers to ensure that Parliament asserts itself without having to say, “Pretty please” to the Government.
Mark Durkan (Foyle) (SDLP)
As a minority party Member, I am of course disqualified from membership of the Backbench Business Committee, but happily, I am not disqualified from participating in the debate, which so far has involved many of the Members who have worked very hard on that Committee.
The Leader of the House helped us by canvassing suggestions as to where we might go from here. It is important to use the motion not just as a “wailing wall” exercise to talk about every past transgression on statements, or to compare how many press briefings this Government give compared with the previous Government. There is guilt all around, so we need to consider how we go forward. If the motion is passed tonight, it will go to the Procedure Committee, but what will it do?
One basic problem touched on by the right hon. Member for East Yorkshire (Mr Knight) is that the ministerial code as such is deemed to be in the charge of the Prime Minister as opposed to the House. One of the things that I would want to see the Procedure Committee do is to draw up a House code of accountability that would apply to Ministers and to Select Committee Chairs if making statements or bringing serious matters— that they have investigated or have made recommendations on—to the attention of the House. A clear House code of accountability would get past the circular argument that takes place whenever hon. Members make a point of order about the lack of a statement—or the alleged inaccuracy of a statement—and then you say that it is not a matter for you, Mr Speaker. In the end, Ministers are meant to be accountable to Parliament, but there is no accountability when these things go wrong. A clear House code of accountability would help us to achieve that.
Fiona Mactaggart (Slough) (Lab)
Does my hon. Friend agree that if there were to be such a House code, it should look at mechanisms to deal with the situation in which, however inadvertently, Ministers mislead the House—as a Minister did when he claimed that my local authority had only 2% cuts—or do not answer questions when asked? We do not have a proper remedy in such circumstances, which are all too common at present.
Mark Durkan
I accept what my hon. Friend says. However, I doubt that a new House code of accountability would be able to cover all these issues. It would have to be more like a highway code than an exhaustive and comprehensive law that was specific in all cases. On the basis of case law and application, it could improve, and then Ministers would not be able to claim that they were in any doubt about what it required.
We must also be careful, as Back Benchers who want to ensure that announcements are made in this House rather than being pre-spun to the press and elsewhere, that we do not end up complaining that too many statements are being made and we do not have enough time to spend on substantive legislative business. For another couple of months, I will carry on serving in another Chamber, and that is a common complaint there. We have too many set-piece statements that do not amount to very much and people find it hard to see anything key, important or new in them. Those three words have all been used at various times to describe the test for whether statements should be made in this House.
I sat on the Benches opposite during the last Parliament and heard many statements that did not contain much new. It might have been that the Prime Minister wanted to identify himself with a policy, but the policy itself was not new, and at times we wondered why statements were being made. While we want to press the point that statements should be made in this House rather than being presented through the media or at other set-piece events, we do not want to end up in a ridiculous situation.
The Leader of the House made some useful suggestions. We should not always have oral statements with up to an hour of questions. Often the questions become repetitive and, just as Minister’s statements are accused of spin, so too the questions and the replies can be accused of counter-spin. It cuts both ways. Are there intermediate arrangements that we could have between a written statement, which involves no questions or time for questions, and an oral statement accompanied by a lengthy opportunity for questions? My hon. Friend the Member for Ealing North (Stephen Pound) referred earlier to a possible gradation of statements. As the Leader of the House suggested, if a statement were available in writing, it could then be the subject of questions without the statement being rehearsed in the House.
Stephen Pound
When I made that intervention, I may have unwittingly caused offence to certain Members representing rural constituencies. The point I was trying to make was that a review such as the 2013 review of the Rural Payments Agency surely is not in the same scale of immediacy as some of the other statements, such as on the implementation of the Bribery Act 2010. Does my hon. Friend accept that we could have a code of prioritisation on this, perhaps even a hierarchy of needs?
Mark Durkan
I fully agree with my hon. Friend, although as always the question will be: who makes the judgment, who makes the call? However, so long as people think that an honest judgment has been made and a fair call attempted, the House would be broadly satisfied. It should always be the case that, if a written statement is made without the chance for questions, there should perhaps be a business slot early in the following week in which people can, if they want to, ask questions about a statement. Perhaps there should be an opportunity for questions to be asked about all the written statements made in the previous week.
I do not understand why the House does not sit until half-past 2 on a Tuesday. I understand the argument on the Monday—that Members are travelling from constituencies and want to spend the weekend with their families in their constituencies—but I do not understand why we wait until half-past 2 on a Tuesday. There should be more early-day business, perhaps on Tuesday, and in fact one window for early-day business could be specifically for ministerial statements. That might be an opportunity for people to have a round-up of free-ranging questions about matters that were the subject of written ministerial statements the previous week, and Ministers would have to be available on that basis.
As I understand it, in the Scottish Parliament, Ministers have to be available to answer questions on a fairly free-ranging basis. We could have a special question time slot—it could be done Westminster Hall-style—in the Chamber almost as a special committee of the House, if we do not want to transgress on to other things. There are ways and means to ensure that, even if a statement is tabled in the first instance as a written statement, we can ask questions about it and hold people to account, so that the procedure of the written statement is not abused. That applies to some of the issues raised by other Members about the hours of the House and the times at which we sit.
It is important to have better advance notice of statements. Again, the Leader of the House was helpful when he said that perhaps more work could be done to ensure that there is advance notice of oral statements. I sympathise with my hon. Friend the Member for Stretford and Urmston (Kate Green) who spoke as a new Member on this point. It is bizarre that we can find in our papers all written ministerial statements, which we cannot question, for that day, but nothing about oral statements, unless we have been listening to the radio and have guessed what topics are likely to be the subject of oral statements. If we could have more advance notice, it would help us in our preparation of questions.
We need to ensure, however, that we have a good balance in what we ask of the Government, because we do not want the business of the House to become dominated by set-piece statements and questions. We also want live debates and good interaction in those debates. I appreciate why the Backbench Business Committee has singled out this issue for the first debate under its lead—it is correct in the light of recent experience and also experiences in the previous Parliament. However, with everybody making accusations, we should bear in mind one of the wisest adages I have ever heard about politics: irony in politics is just hypocrisy with panache. Hearing many of the complaints that each side of the House is making against the other about what different Governments have done reminds me of that. We need to remember that Back-Bench Members are not free from sin either.
Jane Ellison (Battersea) (Con)
Thank you, Mr Speaker, for allowing me to make a brief contribution to this debate, as the only member of the Backbench Business Committee from the new intake—a representative, if you like, of what the hon. Member for Stretford and Urmston (Kate Green) called the geographically and procedurally lost in this House. The other reason why, as a new Member, I stood to serve on the Committee was that, like many new Members, I fought long and hard to get to this place. It is the greatest honour of my life to be here representing the people of Battersea. I want this House and this Parliament at centre stage, at the heart of national life.
In the brief time that I have been here, I have been struck by the breadth of knowledge that exists among Back-Bench colleagues in all parts of the House. It would do much for the reputation of this place if that knowledge were given wider prominence, which is something that might be more possible if the attention of the nation and the media were focused more on the statements to which Back Benchers can respond. Instead, much of that knowledge and expertise is heard at times when very little attention is paid to the House.
A number of Members have referred to the demands of the 24-hour rolling news media. The situation is difficult, because although it would be very easy—and right—to condemn policy leaks to the media, the practicalities of delivering on that are not that straightforward, as we discussed a little bit in our Committee. Although it would be tempting—some Members this evening have been very tempted by this—to dream up draconian punishments for Ministers on the spot, what we need is a well-thought-through, workable protocol that Ministers understand and, crucially, can use to drive a culture change in their private offices and Departments. This issue is not just about Ministers; it is about a whole culture of government. We need to ensure that the mantra is changed from “In the Loop” to “In the House” —[Interruption.] Hon. Members heard it here first.
Let me close by making a point that I do not think has been touched on in the debate so far, concerning the responsibility of the Opposition. This point would be the same whoever was in government or opposition, but to some extent it has been a little too easy to sit and nod, and to see this issue as an open goal or a way to kick the Government of the day. However, if the new approach is to work, it will also make demands on the Opposition. I will leave hon. Members with this thought: we will know that the new approach is working when a journalist says to an Opposition Front-Bench spokesman, “We’ve heard that such-and-such might be announced today, and we’d like you to comment,” and the shadow spokesman says, “I will wait for the Minister’s statement and respond in the House.” I commend the motion to the House.
James Morris (Halesowen and Rowley Regis) (Con)
As another new Member, I want to reflect on some of the fundamental principles that the motion that we are debating represents. It raises some fundamental questions about the nature of our parliamentary democracy and the role of Parliament in modern society. Why is this evening’s debate and the motion moved by my hon. Friend the Member for Kettering (Mr Hollobone) so important? All hon. Members would recognise that the gap between this place and those who elected us here—between Parliament and ordinary people—has grown into a chasm over the past few years. That is why this debate is so important.
In my first few weeks as a Member of Parliament, I have spent time reflecting on what my constituents want me to do in this place. Clearly, the people of Halesowen and Rowley Regis want me to stand up for their interests. However, having spent time on the doorstep during the election, I believe that there is also a sense among our constituents that, despite all their cynicism about Parliament, they want this place still to be the place where big decisions are made and where the life of the nation is debated. They want us to hold the Government of the day to account and to ask difficult questions that probe and challenge them. I believe that, despite their reservations, our constituents want Parliament to reassert its role as the custodian of the national interest, which is why I believe this evening’s debate is so important.
However, I recognise that, as other right hon. and hon. Members have said, there are difficult challenges with reinstating the principle that Ministers should come to Parliament to make their key announcements. As other hon. Members have pointed out, we are living in an information age, when information is spread around the world and around this country at high velocity, and where social networking sites can instantly produce informed—or sometimes not-so-informed—debates about the issues of the day. We have Twitter and blogs, and, as others have pointed out, we have a 24-hour media culture that demands instant comment. It is insatiable in its desire for instant comment.
Modern democracy and this Parliament sit in a world that is moving forward at a frenetic pace. Some developments of the information age that impact on the processes of Parliament are positive. We have a more informed public, for example—a public who are better able to access the workings of government. We have a much higher degree of transparency about the workings of government and Parliament, but there is much more to do.
I welcome my hon. Friend’s motion. It raises questions about how to reinforce and develop the traditional role of Parliament in the context of the modern world that I have described. Parliament must still play—it has to—its traditional role of holding the Executive to account. It is in the nature of the debates we hold in this House—tonight’s is a particularly good example of Parliament in action, where there is some degree of cross-party consensus about the issues—that the very act of having elected representatives interacting in a civilised way can act as a check against this frenetic pace of the debate going on in the outside world where information moves around so quickly.
I conclude by recognising, as I think all hon. Members would recognise, that we cannot turn the clock back to some kind of golden age in which Parliament is, as the Leader of the House said, the main channel of communication out to the nation. Those days have gone. However, Parliament needs to reassert its traditional role—I view this as an important part of my role as a new MP—as the place where important matters are debated and where the Executive are held to account. That is why I will support my hon. Friend’s motion.
Stephen Pound (Ealing North) (Lab)
Any debate that runs the gamut from Pericles to Jimmy Thomas, those two great statesmen, has to be fascinating, but I think we are in the unusual situation of all agreeing on the problem, but none agreeing on the terms of the solution. It is part of the legend of this building that when that glorious fresh, clean and energetic Government of 1997 swept into power, we set up something called the Modernisation of the House Committee, which after a very short time was suspected of going so native that there was a move to set up a “Modernisation of that Modernisation of the House Committee Committee”! Whether that happened or not, I do not know, but change was slowly achieved.
What we need to ask ourselves is: what would be the consequence of a self-denying ordinance linked to a structural series of procedures—a protocol—on the Floor of this House? We need to realise that Ministers would immediately lose control of the agenda; they would actually lose control of news management—the one thing that Ministers hold close to their breasts and near to their hearts, the one thing that they love above all, which is to control the information grid. They would lose it.
I invite hon. Members to picture the scene, lean back and close their eyes; it is something that often happens when I am speaking, but on this occasion, they can do so with my approval. The Minister rises at 3.30 in the afternoon. She or he starts to make a statement. In simpler days, that statement would be followed by comments from the Opposition, and then, when the Liberal Democrat stood up to speak, everyone would leave. When they arrived at St Stephen’s entrance, they would find the place surrounded by the rapacious reptiles of the press, who would have been interviewing people on the Minister’s statement while the Minister was still speaking.
We need to arrive at a point at which a self-denying ordinance is accepted. I am no friend of the tradition of Cromwell, the butcher of Drogheda, and in any event he experienced a degree of failure in forcing the principle on his own people; but were we to achieve that, at some stage—be it on the “Today” programme, Nick Ferrari’s programme on LBC, or any other medium—a Minister of the Crown would have to say to an interrogator, “I cannot answer that question, because I have not made a statement to the House.”
The thought of my ever becoming a Minister is a flight of fancy too far, but were I ever to be in such a position—and I have to say that on occasion my mind has roamed in that way—and were a constituent to ask me, “What will you say tomorrow about the terms of reference for the Commission on the Funding of Care and Support?” I would have to say to that constituent, “Sorry, I cannot tell you, because I must make a statement to the House.” A lot of constituents would ask, “Who comes first, parliamentarians or the people?” That is the degree of the disconnect between us and the public at the present time. So if we are to do this, we must somehow divide the day-to-day reports, the annual reports and the regular reviews that could be placed in the Library from statements of this particular kind.
We must accept that at some stage a parliamentarian—a Minister—will do the unheard of, the unprecedented, and say to an interviewer on the radio or television, “No, I cannot answer that question.” Once that has happened, a whole new set of terms of reference—new terms of trade—will have been established, and we will be moving in a different direction. Until we have done that, there will always be the pressure—and sometimes it will be unbearable—to imply that the Minister does not know the answer to the question, when in fact the Minister is rightly saying, “I do know the answer to the question”, but it would be inappropriate and disrespectful of Parliament for that Minister to give that answer there and then.
That is why I have concluded, reluctantly, that we must consider the issue of sanctions. I rather like one idea, although I do not necessarily favour the decapitation of the entire Front Bench suggested by the bloodthirsty Member for the constituency formerly known as Kettering, but now for ever to be known as Hollobone Central. You, Mr Speaker, know more about the ways of this building than most. I cannot recall the last occasion on which a miscreant Minister was dragged to the Bar of the House. Dragged to the bar, maybe, but not to the Bar of the House. What better, what more salutary example could there be of the power of Parliament for the people—not for Parliament, but for the public, for the people—than some shivering Minister trembling at the Bar, looking around sheepishly, aware of the dreadful calumny that has been perpetrated, and excoriated by Members on all sides? Would that not be delicious?
I think we must seriously consider that option, or perhaps another. It was suggested earlier that placing someone backwards on a horse would be entirely acceptable. Indeed, listening to one of my speeches might be painful enough. However, we must accept that the problem is here for all to see. The solution is for us to define. We have some way to go tonight before we define it, and I fear that when we do define it, we cannot do so in isolation from the issue of sanctions.
This has been an extraordinary debate. Whatever happens from this day on will be different, because tonight marks a watershed. I salute the new Backbench Business Committee and its magnificently able, intellectually brilliant and gifted Chair for leading us in this direction. Things will never be the same again; but how they will be, and what they will be, is up to us tonight.
Glyn Davies (Montgomeryshire) (Con)
Thank you, Mr Speaker, for calling me to make my maiden speech in this very important debate on both the role of Back Benchers and, most importantly, how we can protect the power and authority that this Chamber has had throughout several centuries of our history.
First, I must say that I am very relieved that I managed to arrive here to make my maiden speech without incurring any serious injury. The first time I sought to catch your eye, Mr Speaker, was during the Queen’s Speech debate. I moved on quickly, however, because my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) had secured a debate in Westminster Hall on an issue of interest to me, and I quickly wrote to tell you, Mr Speaker, that I would like to speak in it, but then, unfortunately, my hon. Friend had to go to hospital for a couple of weeks. I hope that that was not a result of my desire to speak, but I suspect that it might have been because a fortnight later I asked if I could speak in the debate on the emergency Budget only then to finish up in hospital myself for a week. I am relieved to arrive here undamaged on this occasion, therefore.
It is a convention that Members refer to their constituency in their maiden speech, and I would like to do that. Montgomeryshire is a beautiful constituency, and I have lived there all my life. Indeed, although my family encouraged me to move away, I always resisted because I simply love Montgomeryshire, especially its uplands. That love is what led me to become president of the Campaign for the Protection of Rural Wales for the last few years, a position I have had to relinquish since becoming a Member of this House.
Montgomeryshire is also a culturally diverse constituency, where the Welsh language plays a very important part. It is probably the dominant language in a third of the constituency. When I was elected as a Member of Parliament, my first seven words were in the Welsh language. I said:
“Dur i’n falch gael fy ethol fel Aelod Seneddol dros Sir Drefaldwyn.”
Well, perhaps that is 10 words, Mr Speaker, but I knew I might be testing your patience, and I should hasten to explain that that just means that I am very proud to be elected to represent Montgomeryshire as a Member of Parliament. I thought that that was the right thing for me to do in that constituency.
A second convention is that the Member making their maiden speech should refer to their predecessor, and I would like to make reference to more than just my immediate predecessor. I was doing some research and I discovered the most incredible coincidence. I thought I was the first person in my extended family ever to have any interest in politics, yet I discovered that in 1880 a certain Arthur Humphreys-Owen, a Liberal Member, owned the house where I live. He was followed by Lord Davies of Llandinam, a very great man in Welsh history, and he in turn was followed by Clement Davies. Some current Members might remember him; he was a great leader of the Liberal party. It is said in Montgomeryshire that many of the Liberal Democrats there voted for me because it was an opportunity for them to vote yet again for a Davies, and that that probably contributed to quite a substantial part of my majority.
My immediate predecessor was Lembit Öpik, and I want to pay tribute to him. He was a man of great talent in many, many areas of activity—and I must say that in some areas he achieved a level of excellence that I am sure I will not be able to match. He served his constituents very well, however, and I wish him well in his new chosen careers.
I am often asked in the constituency how I have found being a Member of Parliament. Like my hon. Friend the Member for Battersea (Jane Ellison), who is no longer in her place, I have said that it is a wonderful experience to be here; it is a wonderful experience for me to be speaking in this Chamber, representing the people of Montgomeryshire. That is a great thrill, as is being part of what happens in this House.
That brings me to the debate in which we are engaging at the moment. Since I have been here, we have seen some amazing things happen. We have seen two of the great parties of Britain come together to form a dynamic coalition, rising phoenix-like from the ashes and smouldering embers of the Labour party—I am sure that it will be able to recover. It was a dramatic event to have been here in the presence of and to have witnessed.
I sat at the back of this Chamber watching and listening to the statement on the Saville inquiry. I was in some sort of enrapture, because it was a most wonderful occasion. I am certain that it was the sheer power of the words and the speeches that brought that hugely damaging issue to a conclusion that is to the benefit of us all. The reputation and presence of this House, and its historical context in which we speak, helped to solve what was a dreadful scar on our history.
This is a very special place, and I think we probably all know that. Several Members, including the hon. Member for Ealing North (Stephen Pound), who spoke before me, have made reference to the issue of where we go from here. Dealing with that is the next step, because there is general agreement across the whole House that there is an issue that we need to address. I must say that I think it is a matter for the Procedure Committee. We must await its response and take what it says seriously, because dealing with this matter is complex.
There is a temptation for us to move into the realms of various punishments, but I am not going to do that. What I will say—this is the only comment that I wish to make on this matter—is that to be asked to apologise in this House for committing something that we all consider to be a serious misdemeanour is a serious punishment. If I ever became a Minister and such a punishment was visited on me, I would consider that to be a huge blow. All the other punishments would be small in comparison with the damage I would feel to my reputation if that happened. So I do not think that we should underplay this.
I have come to this House to represent the people of Montgomeryshire and my constituency, and to represent Wales, the nation that I love. I have come here to do what I can to protect and enhance the reputation of this House. Contributing to this debate and supporting the intention espoused so eloquently by my hon. Friend the Member for Kettering (Mr Hollobone) at its outset is what I really want to do.
Chris Williamson (Derby North) (Lab)
I pay tribute to the hon. Member for Montgomeryshire (Glyn Davies) for making his maiden speech in what is, in many ways, an appropriate debate in which to get one’s spurs. I congratulate him and say well done on that. I particularly enjoyed his tribute to his immediate predecessor; I think that the whole House enjoyed those comments. I was also struck by his reference to Clement Davies, because of a perhaps little-known historical fact. He was leader of the Liberal party at the only time in history when two different party leaders with the same name have fought a general election—I am referring to the great Clement Attlee and Clement Davies. Support for the Liberal party was perhaps somewhat less then than it is today, but perhaps at the next general election its support will return to its rightful place, where it was in 1945.
This is an important debate, and a number of hon. Members from across the Chamber have said that a real problem needs to be addressed. I am a new Member—only elected in May this year—but I have been struck by the number of occasions on which Ministers have been admonished by you, Mr Speaker, and by Opposition Members for repeatedly giving statements to the media and then coming to the House. They have had to apologise for that on at least one occasion. I know that the hon. Member for Montgomeryshire said that that is a particularly strong censure for Ministers and something that he would not wish to put himself through, but it seems as though the current crop of Ministers are not as concerned by the course of action that they might need to take to right the situation. There has seemingly been a willingness to continue merrily along and to give statements to the media despite what has been made very clear by Mr Speaker and by criticisms from the Opposition.
I hope that following tonight’s debate, Ministers will take the issue more seriously than they have so far. As a new Back-Bench Member, I believe that the sanctity of Parliament should be paramount and that Ministers should come here before they make statements elsewhere. It undermines my role, in many ways, if I am contacted by the media on issues such as Building Schools for the Future when we have had five different versions of the list of schools that will be affected around the country. I understand that the latest list is inaccurate, too. The way in which that whole issue has been handled leaves a lot to be desired and many hares have been set running. In my constituency, people’s hopes have been raised and dashed and raised and dashed and that is not a professional way of going on. Something needs to be done about that.
Chris Skidmore (Kingswood) (Con)
Does the hon. Gentleman accept that the Secretary of State came to the House and apologised on that matter, which does not seem particularly relevant to our debate? It was rare for shadow Ministers, when they were in government, to come and apologise and I think that we should accept that that was a genuine apology which was received very well in this House.
Chris Williamson
I am grateful to the hon. Gentleman for his intervention and I freely acknowledge that the Secretary of State came and apologised, but that brings me back to my point. Is an apology or the need to make an apology a sufficient deterrent? Surely what we want on both sides of the House is to ensure that there is no need for Ministers to come and apologise. As the Secretary of State has been so willing to make an apology on five separate occasions, that undermines the value of that censure on a Minister. If we go back 20 or 30 years, perhaps an apology from the Minister might have been a more significant deterrent than it seems to be today. We need to find an alternative mechanism to ensure that these sorts of concerns and problems do not arise in the future.
I come from a local government background and there is a long-standing tradition about such issues in local government. As a former leader of Derby city council, I know that my most significant announcement as leader would be about the budget and the setting of the council tax, and it would be routine for us to embargo the statement that I was going to make to the council chamber. Perhaps that is something that we ought to adopt in this House: Ministers’ statements could be embargoed and that embargo could have some legal force. Perhaps that would be a way of ensuring that the House is treated with the gravitas that, in my view, it deserves.
Mark Durkan
Does that not raise the point that if we took up the Leader of the House’s idea of having clearer advance notice of oral statements, the protocol should be that as soon as notice of a statement were given, an embargo would kick in? We would probably then need to change the civil service code as well to prevent leaks and briefings taking place at civil service level rather than from Ministers or Members of the House.
Chris Williamson
My hon. Friend makes a particularly cogent point. That would certainly be a valuable way forward.
I know that all new Governments have a political agenda and want to get their legislation on to the statute book, but I have been struck by the breakneck speed at which the new Administration are seemingly determined to railroad legislation through the House. Perhaps that is one reason why there have been so many leaks to the media. The House is not being given sufficient time to scrutinise legislation. This is a cross-party point; I have heard hon. Members on the Government Benches express similar concerns. The Academies Bill is a case in point: there are significant reservations on the Opposition side, but there are also reservations on the Government side and it is regrettable that measures are being railroaded through by the new Administration despite those concerns.
A cross-party consensus on finding a better way forward seems to have emerged. How long has this Parliament been sitting now? I have been elected for about 10 weeks and I do not know how many times you have been called on, Mr Speaker, through various points of order, to admonish Ministers for making statements before coming to the House. That simply cannot go on; it just is not good enough. We have to find a better way of doing business in the Chamber. I hope that we can find cross-party consensus on that, and I hope that Ministers will take this issue more seriously than they have hitherto. I hope also that they will take the possibilities on board, particularly given the comments of my hon. Friend the Member for Foyle (Mark Durkan) about giving embargoes legal force and changing the civil service code.
John Hemming
I understand that Select Committees frequently issue their reports under embargoes and obviously it is a contempt of Parliament to publish them prior to the embargo. How does the hon. Gentleman think the Opposition would perceive a situation in which the Government issued something under embargo, thereby constraining them from commenting on it?
Chris Williamson
Clearly, Opposition Members would have to pay cognisance to that. If we were to adopt the embargo approach, there would need to be discipline on both sides of the House. If we are to acknowledge that Parliament is paramount and that we should get statements before they go to the media, a degree of discipline would be required on both sides. I believe that there is a way forward.
John Hemming
Is the hon. Gentleman suggesting that the embargo would rest merely within Parliament, which is, in a sense, what currently happens with statements, or that documents could be issued to the media with an embargo on them?
Chris Williamson
Such details would need to be worked out. That might be a way forward, but could we trust the media with an embargo? I am not sure. We would need to consider the issues, work out the detail and find an appropriate way forward by which Parliament would not feel that it was being held in contempt on occasion by the way in which Ministers conduct themselves. As I have said, the strong cross-party consensus on this matter means that the will is definitely there. I simply hope that Ministers will take our concerns on board and that the House can find a better way of doing business so that we do not have the problems that we have seen far too much of in the short time that I have been a Member of the House.
Mr Peter Bone (Wellingborough) (Con)
It is a great pleasure to follow the hon. Member for Derby North (Chris Williamson), who made some interesting points. In some respects, I wish that he had been here in the previous Parliament, because his frustration would have been extreme.
I have been very impressed by all the speeches made by new Back Benchers. It is a great tribute to them and a safeguard that this Parliament really will be the home of democracy. It would be wrong not to acknowledge your presence here tonight, Mr Speaker, for the whole debate, thus giving it added impetus. That is much appreciated, as is the fact that the Leader of the House has stayed here for the whole debate, as has the shadow Leader of the House, who, in one of the most helpful comments, praised my hon. Friend the Member for Hollobone Central for introducing it. I always regard him as my hon. Friend the Member for Kettering (Mr Hollobone), and he introduced the debate in absolutely the right style and manner. In years to come, people will look back to his speech as a reference on this very important matter.
My right hon. Friend the Member for East Yorkshire (Mr Knight) has also stayed here for the whole debate. Of course, we hope, as the Backbench Business Committee, that we will kick the football to him to look at when his new Committee is formed. While I am praising hon. Members who have spoken previously, it would be wrong of me not to mention my hon. Friend the Member for Montgomeryshire (Glyn Davies). We go back a very long way from my time in Wales. I am pleased to see him in the House, and he will be an active and able Member.
Probably the last hon. Member to speak tonight will be the hon. Member for North East Derbyshire (Natascha Engel), the new Chairman of the Backbench Business Committee. She has got off to an absolutely flying start, and I should like formally to congratulate her on what she has done so far.
It is a great privilege to speak in the first debate to be held by the Backbench Business Committee on what is an historic night. For the first time, it has been left to Back Benchers in Parliament, not the Executive or Opposition Front Benchers, to decide what should be debated in the House on a substantive motion. The hon. Member for Bassetlaw (John Mann) may yet still divide the House, which would be even better, because we would know the number of hon. Members who support the other view to that taken by the Committee.
The motion that we have chosen to debate goes to the heart of readjusting the balance of power between the Executive and Parliament. I want to declare that I will be equally rude to Labour Front Benchers and the Labour Government and to the Conservatives. I will blame them both in equal measure, so there is no partisanship in that.
Under the last Labour Administration, power was increasingly removed from Back Benchers and instead handed to an arrogant, dismissive and control-freak Government. That started under the Blair Administration, with his concentration on public relations and presentation, and got worse under the Brown Administration, when the need to control every minute detail was the rule of the day. As a result of that and other recent events, public opinion of Parliament is at an all-time low. Something clearly needs to be changed.
The big question for the House is whether anything has changed with the new Government. Are they any less interested in PR, presentation and spin? At the very best, the jury is still considering its verdict. I say that partly because I will be highly critical of the Government’s failure to put Parliament first in certain respects—in particular, leaking information to the press and other media in advance of announcing it in Parliament—but on the plus side, we have two extraordinary parliamentarians in the Leader of the House and the Deputy Leader of the House, who believe in putting Parliament first and have demonstrated that not only by their statements, but by their actions. It is also quite clear that the Prime Minister believes in making the Executive more accountable to Parliament and increasing the role of Back Benchers. Clearly, the decision to set up the Backbench Business Committee was a prime indication of the Government’s support for Parliament.
There are other areas in which the Government have put Parliament first. The Prime Minister made the remarkably self-confident decision to give up the right to choose the date of the next general election, which removes a massive advantage for the Government. Equally, his decision to allow Government Back Benchers—I am delighted that the Chief Whip is on the Front Bench to hear this—to table amendments when scrutinising the details of a Bill in Committee and then to vote in the way in which they think fit, rather than according to the party line, will empower Back Benchers enormously. That will no doubt occasionally lead to the Government losing a vote, but that should be regarded as a victory for Parliament, not a defeat for the Government.
The Government have also supported reform of the Select Committee system, meaning that the Chairs are elected by the whole House rather than appointed by the Whips. Equally, the Government’s desire not to programme Bills is a significant advance. Back Benchers will now be able to question the detail of Bills, whereas whole sections of Bills were not discussed during the last Parliament because of programme orders. However, there has been some backsliding on that commitment.
The motion sets out that the most important Government policy announcements should be made to Parliament first, not leaked to the media in advance while Back Benchers are left completely in the dark, because otherwise how are we supposed to ask the most searching questions and properly represent our constituents? It is embarrassing and wholly unacceptable if the local radio station rings up to ask, “What do you think about the statement?” when I did not even know that there would be such a statement and it then tells me what is in the statement so that I can comment. Of course, that has happened under not only this Government, but the previous Government. It makes a mockery of the legislative process when the Press Gallery is packed for relatively unimportant and therefore unleaked announcements, but entirely empty for the most important statements.
There was an exception to that under the previous Government because the right hon. Member for Blackburn (Mr Straw) had a tendency not to leak statements. I remember one occasion on which his statement was not leaked in advance, and the House and the Press Gallery were packed. Actually, the statement was on a Government U-turn, but that showed what could happen if statements were not leaked.
We have heard about the history of Chancellors being fired for leaks and people teeing up on the golf course suddenly to find that they were fired, but I will not go over that. We have also heard many references to your statements, Mr Speaker, on the fact that Parliament must hear statements on important policy first. I remember that the previous Speaker was sometimes so red in the face with rage that Ministers had leaked in advance that I thought that his blood pressure would go through the roof. However, he did not have the success that you have had, Mr Speaker, at getting Ministers to the Dispatch Box to apologise. It was to the great credit of the Home Secretary and the Education Secretary that they did so, but that shows part of the problem, as several hon. Members have said, because however grovelling the apology is, it is not enough to stop the leaking—it continues.
I have spoken to several Ministers and ex-Ministers. They did not want to go on record this evening, but they explained the thought process behind leaking information. It is partly to ensure that the press comments on the particularly juicy bits that Ministers want to get into the media, but it is also because of the news cycle. Ministers want to get information out for the weekend papers and radio programmes, so they leak it then. On the day of the announcement, they ensure that the statement is again leaked. Then, they appear in the television studios and give interviews on it. It was very hard for previous Labour Ministers to deny that they had leaked a statement when I had seen them on the television discussing it several hours earlier. Finally, they get the benefit of the statement and the comment afterwards, and, until we find a solution—a threat, if the House likes—in order to stop them doing that, it will not end.
I have been very taken by some ideas tonight. The idea from the hon. Member for Bassetlaw (John Mann) of stringing them from the roof was quite novel, but I think that we are against capital punishment. The idea from the hon. Member for Birmingham, Yardley (John Hemming), who is sitting by the Bar of the House, had some attraction as well. I do not know whether the Mayor of London has entered into this debate, but he had Parliament square cleaned last night so that none of the tents and protesters is now there. That large open space is now available, and it was suggested to me that, if we put a large stocks there and the Speaker said that a Minister had to stay in them for several days, that would—I fear, at an instance—stop the leaking. However, I then remembered that it would be against European Union law—although that is another reason why we should go ahead with the idea.
John Hemming
It is against the European convention on human rights, which is to do with the Council of Europe, not the European Council.
Mr Bone
The hon. Gentleman is quite right, but I did not want the truth to get in the way of my having a go at the European Union.
Earlier, we commented on how the matter was taken more seriously in the past, and the better way forward is to refer it to the Procedure Committee. However, I should like to suggest some more practical measures on how we might deal with Ministers who continue to leak.
First, if the Procedure Committee or another Committee thinks that a Minister or their Department had leaked, that Minister should have to go and see the relevant Select Committee. If the Department leaks again, perhaps, Mr Speaker, you could demand that the Minister make a statement. If they leak again, perhaps we could have a yellow-card system. I think that I read somewhere in a newspaper about a yellow and red-card system that had much merit. So, with a yellow card the Minister would be on their last warning, and then they might have a red card, meaning that they would have to resign as a Minister forthwith. That, I hope, would really end the leaking. If we had such a system, or if the Procedure Committee had an ultimate sanction, that would stop the leaks. That is what the debate is about. It relates to a serious proposal to put this mother of Parliaments at the heart of democracy, and until we stop such abuse of Parliament we will never really do our job of scrutinising the Executive.
Sir Peter Soulsby
Does the hon. Gentleman agree that it is important that the Procedure Committee deals with leaks as well as with statements? That is a very small point, but the motion before us refers specifically to “statements”. Does he agree that it is important that we also have the opportunity to ask the Procedure Committee to look at leaks as well?
Mr Bone
I am grateful for the hon. Gentleman’s intervention, and I entirely agree. I hope that the Procedure Committee will consider a wide range of measures affecting Back Benchers and then make recommendations that the Backbench Business Committee might put on the Order Paper. The great advantage of the new system is that we do not have to wait for the Government to put such business on the Order Paper; we as Back Benchers can do so.
My solution might sound overly harsh, but it is time to stop pussyfooting around the issue, because it is simply unacceptable that Ministers inform the media before Parliament.
Chris Skidmore
The hon. Member for Leicester South (Sir Peter Soulsby) just mentioned the difference between leaks and statements, and that is important. The Minister is ultimately responsible for the statement to the House, but there is a difference between the Department and the Minister, because they are not always in total control of their Department in terms of who is leaking what information. I should be interested to know my hon. Friend’s views on leaks and who is responsible for them. Is the Minister ultimately responsible, or would my hon. Friend allow some leeway because somebody else in the Department might be?
Mr Bone
Absolutely not. The Ministers in this Government are completely on top of their Departments and the idea that anyone would dare to leak without their authority is not acceptable.
Let us take a situation as an example. Something is leaked and comes before the Select Committee. The Minister explains that it was not him who leaked, but Joe Bloggs at the Department—who, by the way, has now gone. But if it happens again and again and a fourth time, the Minister really should resign. If we are serious about the issue, that is what should happen.
Sir Peter Soulsby
Does the hon. Gentleman agree that it is important that Ministers take responsibility not only for the overt statements that they make themselves, but for the covert leaks made on their behalf?
Mr Bone
The hon. Gentleman is right. The one thing that this Government have been bad at is leaking covertly; the previous Government could teach this one a lot about that, although I hope that this Government would not take lessons from them.
We have heard a lot about the 24-hour news cycle, and we should take advantage of that. The Order Paper should show that there is to be a statement, for example, on Lords reform, and there should be no leak of that statement. We would know that it would take place on, say, Tuesday at a certain time. I guarantee that the House and the Press Gallery would be packed and that Sky News and BBC News 24 would cut into their programmes and switch their broadcasting to the House to see what was being said. That is the situation that we can and must achieve.
I shall finish now, because most Members want to hear what the Chair of the Backbench Business Committee has to say.
Natascha Engel (North East Derbyshire) (Lab)
I cannot begin to say what a pleasure it is to wind up this debate. It is absolutely historic; it is the very first time that Back Benchers have chosen the subject for debate in Back-Bench time. The number of Members who are here and who have taken part in the debate, when there is a one-line Whip and they could have gone home, is testament to its enormous importance to everybody in the House.
This debate has been historic not just for Back Benchers and those on the Backbench Business Committee but for the hon. Member for Montgomeryshire (Glyn Davies). We all enjoyed hearing his maiden speech. I was delighted that a maiden speech was made in Back-Bench business time, so I thank the hon. Gentleman very much.
This debate is important because it goes to the heart of what we are trying to do on the Backbench Business Committee—that is, address some of the frustrations and anger that Back Benchers have felt for years and years. We want, as Back Benchers, to do our job better, and the job that we want to do is hold the Executive to account. That is important because if we do our job better, the Executive do their job better. It is an absolute win-win; when the Executive do their job better, they make better law and Parliament looks much better to the outside world.
This debate is all about carrot and stick; that is also what the Committee is about, and I hope that we will develop the theme in the future. The carrot is that we would all, especially Back Benchers, do our job better and that we would get rid of the frustration and anger at our feeling that our power to hold the Executive to account, which we should be able to exercise, is being taken away from us. We can do that job and have a better Parliament.
The stick is something that we hope to give today to the Procedure Committee. I thank the right hon. Member for East Yorkshire (Mr Knight), its Chair, for being here throughout the debate and taking note of everything that has been said today. Perhaps he will come back as quickly as possible with the stick—suspension from the ceiling, birching or lynching; we are open to everything. He can bring back the stick and we can have a proper debate about how we as Back Benchers can hold the Executive better to account.
I thank all Members who have taken part in the debate and made sure, with some notable exceptions, that is has been sensible. [Laughter.] I am not looking at anyone. We need to start looking at the role of the media and the role of Parliament and at why, over so many years, the problem has got worse and worse. I think that there have been some very sensible suggestions that the right hon. Member for East Yorkshire will take away with him and discuss with the Procedure Committee.
We have been talking about Back-Bench time and Back-Bench business for 400 years. The fact that we are, for the first time, having such an important debate about our modern Parliament is testament to the importance of why we, as a Backbench Business Committee, need to make a massive success of this.
I thank Members from the new intake who have contributed, especially the hon. Member for Battersea (Jane Ellison), who serves on our Committee, and who gave us the soundbite of the evening—“Not in the loop but in the House.” That was a fantastic soundbite. I very much thank all Members who have taken part in this debate and in such an absolutely massive, historic event.
Question put and agreed to.
Resolved,
That this House commends the Speaker on the action he has taken over the past year to reassert the principle that Ministers ought to make statements to the House before they are made elsewhere; notes that paragraph 9.1 of the Ministerial Code says that when Parliament is in session, the most important announcements of Government policy should be made in the first instance in Parliament; believes that compliance with this principle is essential for backbenchers to be able to represent the interests of their constituents and hold the Government to account; and invites the Procedure Committee to consider how the rules of the House could be better used or, if necessary, changed to ensure compliance with this principle and to develop a protocol for the release of information.
BUSINESS OF THE HOUSE
Motion made, and Question put forthwith (Standing Order No. 15),
That, at this day’s sitting, proceedings on the Motion in the name of Sir George Young relating to Use of the Chamber (United Kingdom Youth Parliament) may be proceeded with, though opposed, until any hour.—(Miss Chloe Smith.)
The House divided: Ayes 139, Noes 10.
Use of the Chamber (United Kingdom Youth Parliament)
(13 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)
I beg to move,
That this House welcomes the work of the United Kingdom Youth Parliament in providing young people with an opportunity to engage with the political process; notes that the House agreed on 16 March 2009 to allow the Youth Parliament to meet once in the Chamber; recalls that this meeting took place on 30 October 2009; and accordingly resolves that the UK Youth Parliament should be allowed to meet once a year in the Chamber of this House for the duration of this Parliament.
I am glad that it is now past 10 o’clock.
Philip Davies (Shipley) (Con)
On a point of order, Mr Speaker. Will you confirm that a Division on the motion would be deferred, but that if the closure were moved tonight, a Division on it would take place here and now? Many people watching these proceedings would think it quite strange that we would have a Division on a closure motion, but that there would be no Division on the substantive motion. Will you confirm that?
Mr Speaker
I am grateful to the hon. Gentleman; his point of order helpfully confirms the factual position. In the event that there were a closure motion, it would, as with all closure motions, as he perceptively interprets, be subject to an immediate vote. In the event that the decision on the substantive motion is a matter of dispute when the voices are collected, a deferred Division will be held tomorrow. The hon. Gentleman therefore, as usual, has an exquisite understanding of procedure. That fact is now known not only to me but to all Members of the House here present.
John Hemming (Birmingham, Yardley) (LD)
Further to that point of order, Mr Speaker. Would I be right in assuming that if insufficient Members voted on the closure motion, that motion would fall?
Mr Speaker
There are requisite numbers for these matters, but I tend to take the view of the late Lord Whitelaw that it is advisable to cross a bridge only when one comes to it. Rather than speculate on the hypothetical, we will address that matter when we get there. The hon. Gentleman need not allow his brow to furrow or make himself anxious. He is too big a man for that.
Mr Heath
It is splendid that there is so much careful consideration of the procedure that accompanies this motion.
The motion would allow for the UK Youth Parliament to sit in this place for its annual meeting this year, and annually for the rest of this Parliament, repeating the successful exercise of last October. It is probably not in order for me to say at this stage how much I appreciated the debate that we have just had under the auspices of the Business Committee, but the Government would now expect debates of this nature to be scheduled by that Committee. However, because of the time constraints on the House agreeing this motion and the availability of time before the summer recess, the Government have decided to facilitate the House in reaching a decision by providing time after the moment of interruption.
Mr Christopher Chope (Christchurch) (Con)
Can the Deputy Leader of the House explain why we need to do this before the summer recess? If he knew a week ago that we needed to do it before the summer recess, why was it not put on the Order Paper below the line so that we had advance notice of the Government’s intention?
Mr Heath
I have just said that the Government are facilitating a process. This is not Government policy: it is for the House to determine. I see no reason why we should not debate this issue tonight. We have plenty of time to debate it tonight—possibly as much time as any Member could reasonably expect to debate an important issue such as this. It is important that we take a decision, for the obvious reason that if we could not decide, we could not allow the UK Youth Parliament to make use of the facilities at the time when we would invite them to do so if this motion were passed. It would therefore seem to be entirely sensible, even within the constraints of procedure in this place, to table a motion to agree to invite the Youth Parliament to use the facilities and, if that is agreed, for it then to do so—rather than the other way round.
Philip Davies
The Deputy Leader of the House claims to be facilitating a debate and says that he believes there is no reason why a debate should not take place. If that is the case, can he explain why yesterday the Government tried to get this motion through on the nod at the end of the day, without any debate? If the Government were so keen on facilitating a debate, why did he not schedule a debate in the first place?
Mr Heath
May I let the hon. Gentleman into a secret? If the House agrees on an issue, we do not need to take up debating time. If the House agreed on a matter, it would be sensible not to schedule a debate on the Order Paper, because we could use the time for more important things, such as those statements that hon. Members have said they want to hear in the Chamber. We could ensure that Ministers come here to explain their policies, and have more time for legislation, rather than debating matters on which the whole House agrees. But it would appear that there are some in the House who do not agree, which is why we are happy to provide time for the debate this evening.
Last time we debated this matter, I was on the Opposition Benches and supporting the hon. Member for Worsley and Eccles South (Barbara Keeley)—no, it was not her; it was the hon. Member for Rhondda (Chris Bryant).
Mr Heath
I beg the hon. Lady’s pardon. It was her who put forward the motion. I said then that if we were to decide in the future that the first occasion had been a great success in building confidence in democracy, and an understanding of democracy, among the young in this country, we might repeat the experience. I hope that hon. Members who were in the House during the previous Parliament and who actually saw the debate—I attended the whole of it—would agree that those tests were met, and that the experience should be repeated. I hope that new Members in the House, who worked hard to ensure they could take their seats, will feel it right to encourage young people to express themselves and take part in the process of politics, and I can think of no better way of doing so than this particular suggestion.
Simon Hughes (Bermondsey and Old Southwark) (LD)
May I help my hon. Friend, and colleagues on both sides of the House who were positive about the experiment last time, by saying that the feedback from the young people who participated, particularly some brilliant young women, and brilliant black young women, was that it had transformed their lives and that they had left this place reinvigorated to argue for British democracy in a way that I honestly do not think any of us envisaged? So I hope that there will be no backwoods objection to that fantastic innovation made only a few months ago.
Mr Heath
I am most grateful to my hon. Friend for those comments, because they are well founded and speak for the experience that many of us have had in speaking to young people who were involved that day. Let us remember that the debate took place at a time when Parliament’s reputation was severely damaged, and when young people were increasingly disaffected with politics and society. I do not think that any hon. Member would argue that either of those problems has gone away, but I believe that we are making progress. In 2005 the turnout for 18 to 24-year-olds was estimated at 37%. Five years later, turnout is believed to have risen to about 44%. It is only by continuing and increasing young people’s engagement with politics that we can continue to see those numbers grow.
For those who either watched it or were present, last year’s debate showed us young people from across the country discussing the issues that they felt were most important—youth crime, cheaper transport, free university education, job opportunities for young people, and lowering the voting age to 16. Without trespassing on the territory of the Backbench Business Committee and the hon. Member for North East Derbyshire (Natascha Engel), may I say that if those suggestions were put to her Committee, they would not be out of order as matters of vital importance to the House.
Philip Davies
Was I hearing the Minister correctly when he tried to claim that the increased turnout among young people at the last election from 38% to 44% was due to young people having a debate in the Chamber last year? Is that really what he is claiming? I thought that his party was claiming beforehand that it was the televised debates with all the leaders that were encouraging young people to turn out. Has he changed his mind, or is he just coming out with a load of guff and a spurious argument?
Mr Heath
The hon. Gentleman was correct neither in the figures he quoted me as saying nor in the causal connection, which I did not seek to make. So the simple answer is: no, he is not correct.
I shall deal with some of the objections that might come up during the debate, because they came up at length last year. Last year’s debate by the UK Youth Parliament was the very first time that anyone other than Members of Parliament had sat on these green Benches.
Mr Heath
I hear the word “outrageous” from a sedentary position behind me. The fact that last year’s debate was the first time that anyone other than a Member of Parliament had sat on these green Benches seemed to be the issue for some hon. Members. They held the view—and obviously still do—that to sit on these Benches is a privilege that can be exercised only by Members who have been elected to this House. In my view, that is to confuse the institution of Parliament, which is an enormously important institution to this country, and the fabric of the building. The two are not identical. Were it to sit in another chamber, this Parliament would still be the Parliament of the United Kingdom, just as much as it is when it sits in this Chamber. This Chamber in itself does not constitute the Parliament of the United Kingdom.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Would my hon. Friend also allow this Chamber to be used by the pensioners’ parliament, the Muslim parliament or any other body, and basically be rented out?
Mr Heath
I am glad that the hon. Lady has raised that issue, because it was the next objection that I thought might be raised. Her argument is what I would characterise as the slippery slope argument: that because we have allowed the UK Youth Parliament to sit in this Chamber once, and because we now propose that the experiment might be worth repeating, there is no way that we can prevent any Tom, Dick or Harry, from anywhere in the country, from coming in here and, by precedent, using this Chamber. However, that is patently not the case, because the decision is taken by this Parliament.
However, there is another reason, which is this. The UK Youth Parliament fulfils two criteria that no other organisation in this country can fulfil. First, its members are elected democratically; secondly, it comprises citizens of this country who, by statute, cannot seek election to this House. Therefore, I believe that the UK Youth Parliament has a unique position, and we have a clear function in encouraging young people to take an interest in politics and become involved in the political process.
Emma Reynolds (Wolverhampton North East) (Lab)
Should we not celebrate the fact that young people are interested in sitting on these Benches, rather than having a go at them, in a cheap fashion, from the Back Benches?
Martin Horwood (Cheltenham) (LD)
May I briefly congratulate Oliver Warne, MYP, on his re-election to the Youth Parliament? Does my hon. Friend agree that he and the other youth MPs conducted the debates in this place last year with enormous dignity, good sense and restraint, which is something from which some Members of this House could perhaps learn?
Mr Heath
My hon. Friend is absolutely right. One of the other objections raised is that if we allowed members of the UK Youth Parliament in here they would be swinging the Mace round their heads, swinging from the chandeliers and causing mayhem—after all, they are youth; some of them probably wear hoodies. I have to say that, in all honesty, that was not the experience last time—not by a long way.
John Mann (Bassetlaw) (Lab)
I thank the hon. Gentleman for so generously giving way again. I recall one of the Tory backwoodsmen with whom he is in such happy coalition these days saying that those young people would come in here and put chewing gum on the seats and use penknives to carve them up. Could he report back to the House on how many such incidents occurred?
Mr Heath
Of course no incidents of that kind occurred at all. Indeed, the behaviour of the young people in the Youth Parliament was impeccable in every sense. Indeed, there were staff and Officers of the House who confided in me after the event that they had had real reservations about the invitation being issued. They had been worried about what would happen, but they were astonished at the maturity, good sense, good manners and proper behaviour of those young people—young people who engaged in debate that was often of a higher quality than what we hear in this Chamber on a normal working day. That is a testament to the maturity and good sense of those young people.
Adam Afriyie (Windsor) (Con)
It seems to me that we have effectively formed a Backbench Business Committee this evening, but I wonder whether in future it would be better if this sort of issue were brought forward by the Backbench Business Committee rather than in Government time. There were great results from what took place here, which I do not think many of us would deny, but this is not really prime Government business. Would it not be better dealt with by the Backbench Business Committee?
Stephen Williams (Bristol West) (LD)
Does my hon. Friend recall that in the previous Parliament, it was somewhat embarrassing that the House of Lords allowed the UK Youth Parliament to sit on their red Benches, which is what shamed us into allowing it to sit on our green Benches? This House made rather a spectacle of itself in the last Parliament and we made ourselves very unpopular. We are in grave danger of doing exactly the same thing again, and looking increasingly out of touch.
Mr Heath
I think it is always a matter of concern when the House of Lords looks comparatively youthful, progressive and forward thinking in comparison with the elected House, so I absolutely agree with my hon. Friend.
Let us deal with some of the apparently very important logistical questions raised in last year’s debate. They were clarified then, but it is worth repeating them for the avoidance of any doubt. The rules of order that the UK Youth Parliament will follow in this Chamber will be the same as our own. As I suggested earlier in response to the intervention by the hon. Member for Bassetlaw (John Mann), there are strong arguments for us to follow its lead in how we interpret procedure rather than it following ours.
The Mace will not be in its place and the Speaker’s Chair will not be occupied by anyone other than Mr Speaker or the Deputy Speakers. As for broadcasting, the rights will remain with us. I believe that the parliamentary broadcasting unit should be encouraged to film the proceedings, and I am sure that the broadcasters will need no encouragement to show it.
Jo Swinson (East Dunbartonshire) (LD)
I should declare that I am a trustee of the Youth Parliament. I would like some clarification from my hon. Friend as to whether the transmission of proceedings will be live or, as I have heard in some reports, there will be a delay. Given that so many have noted that the Youth Parliament was exceptional in its proceedings, it should not be required to have a delay in its live broadcasting.
Mr Heath
I am grateful to my hon. Friend, who has played a large part in championing the role of the UK Youth Parliament in this House and elsewhere. I cannot answer her question because it is not within the gift of the Deputy Leader of the House—despite my manifest powers of persuasion. I will inquire and write back to my hon. Friend, but I am afraid that I do not know the answer without making further inquiries of the parliamentary broadcasting unit.
Mr James Gray (North Wiltshire) (Con)
I entirely support the use of the Chamber for the Youth Parliament, but I am puzzled by one piece of logic. Why is the hon. Gentleman content for the Prime Minister’s Chair to be used by the UK Youth Parliament, while the Speaker’s Chair is somehow regarded as sacrosanct? Why should that Chair not be used equally by the Youth Parliament?
Mr Heath
For the very simple reason that this appeared to be a bone of contention last time we debated it, and rather than have yet another argument with colleagues who felt otherwise, it was felt appropriate for the Speaker’s Chair not to be occupied by anyone other than Mr Speaker or the Deputy Speakers. We will keep to that protocol, because there is no objection on the part of the UK Youth Parliament to it. Indeed, how could it object, when it is here at our invitation? There is no reason for changing the protocol.
At the end of last year’s debate, Rhys George, a Member of the Youth Parliament for the South East, rose on a point of order to say:
“I would like to say thank you to all the MPs who voted overwhelmingly for us to be debating here today for the first time. Without them, we would not be here and the people of Britain would not be able to see what we mean and what we are trying to do to benefit young people.”
Mr Speaker was in the Chair at the time, and he rather deftly avoided noting that this was not, in fact, a point of order or a matter for the Chair. I am not sure that he would have been quite so tolerant had it been raised in our normal business.
I believe that this is a matter for the whole House. We must decide whether we want to continue to encourage young people to be involved in politics. We must decide whether we want to give them an opportunity that will be theirs perhaps once in a lifetime, and which I think will make a lasting impression not just on them personally but on the people whom they represent and the people to whom they report back—the people who know that they have had that opportunity. I hope that Members will join me in supporting the motion and welcoming the UK Youth Parliament back to this place to continue its excellent work.
Barbara Keeley (Worsley and Eccles South) (Lab)
The question of whether young people engage in politics should concern Members because of its potential impact on the fabric of democracy in future years. Labour Members are very proud that in March 2009, the Government set the very good precedent of tabling a motion to allow the UK Youth Parliament to sit in the Chamber at a time when the House was not sitting.
Mr Philip Hollobone (Kettering) (Con)
The hon. Lady has made the point that the Government established a precedent. However, in our last debate on the subject it was made clear to the House that it would not be a precedent: that it would be a one-off for the annual meeting of the UK Youth Parliament on its 10th anniversary. Is this not the slippery slope that many of us feared?
Barbara Keeley
I would not call it a slippery slope, but I will come to the point that the hon. Gentleman has raised.
As some Members have observed, the meeting that took place last October was a great success. These Benches were packed with 300 young men and women, many from ethnically diverse backgrounds, and it was a fantastic debate. One of the young people described how she felt about it, saying:
“It is an outstanding example of how democracy among young people is alive and kicking. Tackling debate topics such as tuition fees, transport, crime, the economy AND lowering the voting age really shows that anyone who thinks young people aren’t interested in politics is extremely misinformed.”
We want to encourage young people to see democracy as important, and to see the House of Commons as relevant to their lives and to the future. It would be very odd for us not to continue to let young people use the Chamber when we are not using it—on a Friday, during a weekend, or when the House is in recess. It would be very odd indeed for us to say now, after all the success of the debate last October, that we were raising the drawbridge on the use of Parliament by young people. Instead, we should be opening the windows to the breath of fresh air that they will bring in.
Kerry McCarthy (Bristol East) (Lab)
Does my hon. Friend agree that if, after the great success of last year’s experiment, we turned around and said, “No, we are not letting you in here again,” that would send entirely the wrong signals to the young people?
Barbara Keeley
It would indeed. Members are clearly concerned about the issues affecting young people. We regularly discuss in the Chamber the same issues that the young people discuss themselves, and it is important for us to hear their angles and views as well. The engagement of the UK Youth Parliament—whose members are themselves elected from all parts of the country, often on a bigger turnout than some Members here—is very important.
Barbara Keeley
I hope that I speak for all Labour Members when I say that we support the motion.
Madam Deputy Speaker (Dawn Primarolo)
Order. Has the hon. Lady finished her speech?
Madam Deputy Speaker
In that case, given that the hon. Member for Shipley (Philip Davies) is on his feet, he has the Floor.
Philip Davies (Shipley) (Con)
Thank you, Madam Deputy Speaker. It is a poor show when, although it is apparently so important for the Youth Parliament to sit in this Chamber, the main Opposition party can find only about two minutes’ worth of things to say about it. It clearly cannot be all that important to them if they have nothing to say in support of it.
Philip Davies
The hon. Lady would not give way to me, but because I am of more generous character than she is, I will give way to her.
Barbara Keeley
I thank the hon. Gentleman.
It is easy for Labour Members, because we are unanimous on the subject. It is the backwoodsmen on the Government Benches who are raising all the objections.
Philip Davies
The hon. Lady talked—very briefly, I must say—about the views of young people, and the importance of their perception of the House of Commons and its relevance to them.
May I tell the hon. Lady something that she might want to bear in mind when considering what people think of the House of Commons? It comes back to something that my hon. Friend the Member for Kettering (Mr Hollobone) said in his earlier intervention, which was not dealt with particularly well. The hon. Lady started off by saying that the previous Labour Government set a precedent with last year’s debate.
Barbara Keeley
To clarify that, my point was that moving the motion was a precedent, not that the debate itself was a precedent.
Philip Davies
We are very grateful in this place that we have our Hansard reporters, and we can all read tomorrow what the hon. Lady actually said. We certainly heard that she said that it was a precedent.
The hon. Member for Bristol East (Kerry McCarthy) said that it was an experiment last time. However, if anyone wants to cast their eyes back on the account of last year’s debate, they will see that it was made abundantly clear by the Government and others who supported the principle that the debate was a one-off.
Therefore, the hon. Member for Worsley and Eccles South (Barbara Keeley) and those supporting her stance are saying that what the young people in the Youth Parliament should learn from the House of Commons is that we cannot believe a word anybody in this House says, because they say one thing one year and they then go and completely reject the solemn promises they made at that time. If that is the kind of message they want to give to young people, that is very interesting.
Stephen Gilbert (St Austell and Newquay) (LD)
Given that no previous Parliament can bind a future Parliament, perhaps it is not the young people who need to do their homework about this place. Does my hon. Friend not agree that that decision was for that Parliament to take, and what we do in this Parliament is for us to decide?
Philip Davies
The hon. Gentleman is absolutely right. However, I would point out that those people who were here in the previous Parliament and who said that the debate was a one-off—that it would only take place once and it would not be repeated—should bear that in mind when they come to decide how to vote on the issue tonight, unless, of course, they want to go against absolutely everything they said.
Martin Horwood
I was in the last Parliament and in fact I hope that it does set a precedent. I am slightly confused, however. In a spirit of honesty and transparency, will the hon. Gentleman clarify whether or not he opposes the use of these Benches by the UK Youth Parliament?
Philip Davies
Of course I do. The hon. Gentleman must have been living on Mars for the past year. He said he attended last year’s debate; I spoke for about an hour and a quarter on the subject then, although I cannot remember the exact length of time. He claims he was present, but I made it blindingly obvious that I am against this. For the benefit of the hon. Gentleman, who obviously cannot remember the debates he takes part in, I will try to rehearse tonight some of the same arguments I made then so that he can get a better understanding that I am actually opposed to this.
Steve Baker (Wycombe) (Con)
I thank my hon. Friend for saying that, as I was going to ask him to rehearse those arguments. Also, does he agree that this is possibly the most vibrant, passionate and sincere debate we have had in this Parliament, and that that is, perhaps, a case for ending the system of whipping?
Philip Davies
I am sure my hon. Friend’s comments will have been noted diligently by the Whip on duty, my hon. Friend the Member for Scarborough and Whitby (Mr Goodwill). Some of us in this House believe that all votes are free votes really, and that, at the end of the day, Members can vote entirely as they please. They might want to take heed of what the Whips are encouraging them to do, however, as I must say to my hon. Friend the Member for Wycombe (Steve Baker) that usually their advice is very sound, but occasionally it is not, and I suspect that on this issue it may not be quite as sound as it usually is.
I am sure my hon. Friend’s suggested innovation will be taken seriously by my hon. Friend the Member for Scarborough and Whitby. Indeed, he is sitting in his position on the Front Bench and writing diligently as I speak, so I think the name of my hon. Friend the Member for Wycombe has gone in the book. I wish him well for his future career, but I fear it may be as elevated as mine.
Simon Hughes
I have no desire to encourage the hon. Gentleman to speak for a long time, but may I just ask him a question? I understand why backwoods Conservatives might have been against this before we tried it the first time, but given the success of what happened and the clearly positive response, can he not understand that it is bizarre, extraordinary and very sad that he is continuing his opposition as the Youth Parliament itself was clearly far more successful than his argument a year ago?
Philip Davies
I look forward to hearing the hon. Gentleman outlining at length his measure of success for that particular debate. We can have a debate at length this evening about what the measure of success is for the Youth Parliament sitting here. It was clearly more successful than I thought it was and perhaps even more successful than he thought it was, because the Deputy Leader of the House told us that the turnout at the election was so much higher. That was something that I had never thought of as a measure of success, but clearly it was; it had nothing to do with any of this.
Mr David Nuttall (Bury North) (Con)
Mention has been made of how much the young people enjoyed the experience and benefited from it. Does my hon. Friend agree that that was probably due in no small part to the fact that they had heeded the debate and thought that the occasion they were taking part in was unique? It now turns out that it was not as unique as they thought.
Philip Davies
My hon. Friend makes a very good point. A system of overkill may well be in operation here; these debates may become ten a penny to members of the Youth Parliament and they may not treat them as seriously as they did last time. That may or may not be the case—I guess time will tell.
Philip Davies
I will give way in a second to my hon. Friend, but I wish to finish the point I was making to the hon. Member for Bermondsey and Old Southwark (Simon Hughes), who said that my position was extraordinary, given that this was such a success last time.
Philip Davies
I will happily give way to the hon. Gentleman, but would he say that the Youth Parliament debate that took place in Westminster Hall in a previous year was a success? Or was it a great failure? I think that it was a success, but perhaps he thinks it was a failure. If it was a success, why can they not go back to Westminster Hall? They had a very successful debate there before. They had a very successful debate—he mentioned this or perhaps one of his hon. Friends did—in the House of Lords. Does he say that that debate was a failure and that they therefore have to come in here because it failed in the House of Lords? Or was it a success? They do not really need to come here to have a successful debate. We have proved in this House on many occasions that they can have very successful debates elsewhere.
I might add that when we were debating this last time round and we were asking why they could not go back to have their debate in Westminster Hall, the argument given by the proponents of this was, “They have already been there once and they do not want to go back again.” When we asked why they could not go back to the House of Lords, we were told, “They have been there once and they need somewhere different.” Why does not the same argument apply on this occasion? They have been here once and presumably they want to move on to somewhere else. I can think of nowhere better than the European Parliament, where I am sure they would be welcomed with open arms.
We say that we are trying to improve the quality of debate in the Parliament in which they speak. It may well be that the Deputy Leader of the House is right in saying that they improve the quality of debate in this Chamber and the decision-making qualities in this Chamber, but believe you me, if they were to have a debate in the European Parliament, they would transform the quality of debate that takes place over there and the quality of decision making. Perhaps they ought to go somewhere else. Perhaps they ought to go to Buckingham palace, because they have not been there before for a debate. They seem to want to go to somewhere only once, so why are we now presuming that they want to keep coming back to the same place year after year?
Emma Reynolds
Everyone in the Chamber knows of the hon. Gentleman’s enthusiasm for the European Parliament, but does he agree that our Parliament is a remarkable institution and it is not comparable to sitting, speaking and standing in Westminster Hall? We should be proud of the fact that young people are interested in the politics of this country. I regret the cynicism expressed by some, but not all, hon. Members on the Benches opposite and the fact that they take such a distasteful approach to this matter. Why are they not proud of the fact that young people want to come here to debate things and look at how our Parliament works? Why are they ashamed of that?
Philip Davies
I am very sorry that the hon. Lady takes that view. I am sure that all the members of the Youth Parliament will have tuned in late at night to watch this debate to see their fortunes unfold before them. What they will probably be slightly concerned about is that in this Chamber that they all cherish there are people such as the hon. Lady, who is clearly so intolerant of anyone who happens to have a different opinion from her. I thought that the whole principle of free speech and free debate in this House was that we accepted each other’s arguments and respected them equally and that although we might come to different points of view, we would respect them. I perfectly respect the hon. Lady’s point of view, but it is just a shame that she seems so intolerant of anybody who happens to disagree with her. I am not entirely sure that that is the kind of lesson we should be teaching the members of the Youth Parliament.
Emma Reynolds
I am perfectly respectful of people who have a different view from me, but I also respect that young people have different views from one another and want to take the opportunity to debate them in this place. This is the first of the hon. Gentleman’s speeches on this subject that I have listened to and I ask him to forgive me, as I have not listened to hours of his former speeches on it. Why is he ashamed of this place being used when we are not using it? What does he oppose? Why does he not think that young people should use this place when we are not here? I do not understand his argument.
Philip Davies
If the hon. Lady did not keep intervening, we might get on to the arguments so that we could outline them for her. She is far too impatient—she obviously wants to get on with it. I want to get on with it, too, but I am trying to be generous with people who want to intervene. I shall try to outline the arguments, but I am surprised that she seems to think that the only place that a debate of the Youth Parliament can take place is in this Chamber. Why cannot a debate of the Youth Parliament take place in other forums? They can have a very good debate in Westminster Hall and in the House of Lords. Why do they have to be here to have a debate? That is the point that the hon. Lady is making, which I do not really follow.
Mr Chope
Does my hon. Friend accept that one of the big complaints at the meeting of the Youth Parliament last year was that debates were truncated? The Youth Parliament member for Christchurch, for example, was not called and so he was unable to participate. Would it not be better if the Youth Parliament met not just one day a year but several days each year, so that there was time for every member of the Youth Parliament to participate and to stand on their feet in this wonderful Chamber?
Philip Davies
My hon. Friend makes a very good point and he is living proof that people can change their mind in this place. He seems to be articulating the view that we should have more Youth Parliament debates in this Chamber, an argument with which I am sure that many hon. Members would agree. Many might agree with it secretly because they do not want to let the cat out of the bag now, just like last year when they did not want to let the cat out of the bag that this would be an annual occasion. They now do not want to let the cat out of the bag that they want this to happen more than once a year—in fact, that they want it to happen a few times a year. Perhaps it could happen every week, or every Friday that we did not sit. Perhaps that is what they really think, but they do not have the courage of their convictions to say so.
Barry Gardiner (Brent North) (Lab)
How would the hon. Gentleman respond to the suggestion that his speech inadvertently presents the only decent argument against the Youth Parliament’s sitting on these Benches, namely that the quality of their debate so far exceeded his that they would put him to shame?
Philip Davies
I have no doubt that Members of the Youth Parliament will put my speeches to shame and I equally have no doubt that they will put the hon. Gentleman’s speeches to shame, too. The only difference is that I know it and, perhaps, he does not. The same rules still apply.
Dr Thérèse Coffey
I am hosting a visit of all the members of the Youth Parliament from Suffolk tomorrow, and is it not a crying shame that the authorities of this House would not find it fit to find tickets for Prime Minister’s Question Time, because they said that they could not accommodate members of the Youth Parliament? And yet they seem happy to say that we should have them here. I believe that this place is special for setting the legislation of this country, and yet apparently it would be a better use of their time to watch more debates in the Committee Rooms or in Westminster Hall. Is it not a crying shame that they have been denied access to see Question Time?
Philip Davies
My hon. Friend makes a very good point. It comes down to the point about what we can do in this House to encourage younger people to participate in politics and become active in politics—I am sure that that is something with which we all agree. I hope at a later point to discuss matters to do with the cost of this event. The Deputy Leader of the House was going through all the rigmarole about what will happen, but he did not say how much it will cost. Perhaps we ought to think about whether that money could be better spent out in each Member’s constituency on trying to encourage younger people to participate in politics, rather than on this grand gesture. My hon. Friend makes a very good point. Perhaps we should take stock and think about what we can do to encourage people to participate in and get excited about politics. She has hit the nail on the head.
Stephen Pound (Ealing North) (Lab)
I was sceptical about the Youth Parliament but the cure for my scepticism was seeing it in action and realising that at least one future parliamentarian was almost certainly there on that day. The Stormont Assembly has been doing this for years and not only are there absolutely no problems in Stormont but Ministers respond to the Youth Parliament in the Northern Ireland Assembly. As with many issues, we could look across the water and learn from them.
Philip Davies
The hon. Gentleman makes a fair point for which I have a lot of sympathy. If Ministers are so enthusiastic about the Youth Parliament sitting here, I am sure that they will have no objection to volunteering their time to respond to its debate in the way that he suggests. I am sure that that would be a worthwhile innovation. He is known for his ingenuity and his innovations, and I am sure that that one might catch on. He is certainly right that we could learn a great deal from our friends in the Province who often have more sensible views on things.
Mr Heath
Just in case the hon. Gentleman thinks that he is genuinely suggesting an unusual innovation, let me tell him that the acting Leader of the Opposition, my right hon. Friend the Leader of the House and I were all present for the entire day at the last meeting of the UK Youth Parliament and that the acting Leader of the Opposition spoke in the debate. I would certainly think it a privilege to attend this year if it is the will of the House that its meeting should take place in the Chamber.
Philip Davies
It is a red letter day for the Youth Parliament, because not only do we seem to be on the verge of allowing its members to use the Chamber again, but the Deputy Leader of the House has offered to play a full part in their proceedings. I am sure that that promise will have been bagged by them and that they will look forward to that with excitement.
The hon. Member for Brent North (Barry Gardiner) said that he was concerned about the quality of my speech, but my generosity in dealing with interventions has meant that I have not yet started. However, I intend to do so now.
Barry Gardiner
I assure the hon. Gentleman that it was not the quality but the width of his speech that I was worried about.
Philip Davies
I am sure that the House is grateful for that clarification.
The first point that I want to make is that the debate is not about the merits of the Youth Parliament. One weakness of the argument put forward by those who support the motion is that they try to characterise the debate so that if you are in favour of the motion you are in favour of the Youth Parliament and that if you are against it you must be against the Youth Parliament.
Madam Deputy Speaker
Order. The hon. Gentleman is a very experienced Member of the House and I know that he does not mean to drag me into what is an obvious disagreement among some in the Chamber. Given that he is so keen on procedure, I know that he will want to stick to it exactly.
Philip Davies
I apologise, Madam Deputy Speaker.
Surely it is not sensible to suggest that people who support the motion must be in favour of the Youth Parliament and that those who are against it must be against the Youth Parliament. Nobody could be more supportive of the UK Youth Parliament than I am.
Emma Reynolds
If the hon. Gentleman is so supportive of the UK Youth Parliament, why will he not let it use the Chamber when we are not here?
Philip Davies
Once again, the hon. Lady springs up like a jack-in-the-box. [Hon. Members: “Jill-in-the-box.”] Indeed. I am not entirely sure whether there is a wasp on that Bench or something else that is prompting the hon. Lady to jump up at every opportunity. If she will allow me to advance the arguments, she might learn why I think as I do. I am very proud of the fact that I spend an awful lot of time meeting people who are members of the Youth Parliament in my area. I am very proud of the fact that I went to visit Bradford council chamber, where an excellent debate took place involving the Youth Parliament in my locality, and I thoroughly enjoyed listening to those arguments and that debate. I am all for engaging with members of the UK Youth Parliament.
Andrew Percy
If it is fine for Bradford city council chamber to be given over to the Youth Parliament, why it is not fine for the Chamber to be given over to it?
Philip Davies
If Bradford council is happy for the UK Youth Parliament to use its chamber, that is a matter for it. Perhaps it had this kind of debate before it allowed it to do so; and equally, as someone who believes in democracy, if the will of the House is to allow the UK Youth Parliament to use the Chamber, I will respect that decision, just as Bradford councillors presumably respected the decision of the majority there.
Jo Swinson
When did the hon. Gentleman last meet his local members of the Youth Parliament? What was their view of whether they should use the Chamber for debating? What was his response to them?
Philip Davies
The hon. Lady makes a good point. I met those members straight after their election. I made a point of contacting them all when they were newly elected to their positions. We all had a meeting in Shipley, and the interesting point, which is the one that she was making, is that not one of them mentioned the fact that they wanted to hold a debate in Parliament. In fact, all the times that I have met members of the Youth Parliament in my locality—
Philip Davies
I am dealing with the hon. Lady’s intervention. Even if she wants to intervene again, she may at least listen to the answer to the first one. She asked what view members of the Youth Parliament had of meeting here and what my response was to that. My answer—it is perfectly clear, although it might not be the one that she wants, but it is the answer to her question—is that not one of them mentioned that they wanted to hold a debate in the Chamber. In fact, when I visited their debate at Bradford council chamber, not one of them mentioned doing so either.
Philip Davies
I am still dealing with the hon. Lady’s previous intervention. The wasp appears to have moved places. If holding a debate here is so important to all the Youth Parliament’s members, perhaps she will explain when she comes back for a second bite of the cherry why none of them mentioned it to me.
Jo Swinson
Perhaps the Youth Parliament’s members are not as avid readers of Hansard as everyone else and had not read or heard the hon. Gentleman’s previous more-than-one-hour peroration on this issue. Given that he had spoken for more than an hour, I find it strange that he did not mention that to the Youth Parliament’s members when they came to meet him and that they had no response to it. Will he confirm that he met them after he had made his hour-long speech in the Chamber and that he chose not to mention it?
Philip Davies
I did meet the Youth Parliament’s members after I made that speech in the Chamber. I have never hidden my views on the issue. I have no idea what the hon. Lady does, but I know for a fact that she is an incredibly diligent local MP. She can learn nothing from me about being a good constituency MP, but I will explain my approach just for clarity. When I meet local members of the Youth Parliament, my approach is to ask them about the issues that they are interested in and to ask them to tell me about the things that concern them. Clearly, her approach, which is obviously better than mine, because she is a diligent constituency MP, is for her simply to lecture them about what she thinks. I did not think that that was an appropriate way to deal with them, so I allowed them to raise the issues that they were concerned about, and those issues happened not to include holding a debate here. In fact, many of them were much more interested in local issues, such as crime and job opportunities, and debates about going to university, tuition fees and so on. Not one of them felt that holding a debate in the Chamber would be revolutionary to their lives.
Barbara Keeley
The debate is not about the Shipley youth council or the West Yorkshire youth council, but about the UK Youth Parliament. Young people want to meet young people from other parts of the country and to debate issues with them. If this was just a local matter, one could appreciate that they would feel the way that the hon. Gentleman suggests, but it is not; it is a UK-wide Youth Parliament.
Philip Davies
No one is arguing that the UK Youth Parliament should not have a national meeting, but that is not what is before the House. We are discussing where it should have its meeting. I am sure that the hon. Lady will concede that the Youth Parliament members could meet in Westminster Hall or the House of Lords. If her prime purpose is that they should meet, that is not an argument for why they should meet here.
Stella Creasy (Walthamstow) (Lab/Co-op)
I am grateful to the hon. Gentleman for giving way in this waspish debate. He is making a long and pained contribution about why the UK Youth Parliament is important and the many issues that it considers, but he has not set out why those things cannot be considered in the Chamber. He makes a strong case about the many things that young people talk to him about, and I would be worried if the only thing that they discussed was the use of this place, but he has not explained why that should be ruled out. He needs to be clearer about why not this place, rather than why somewhere else.
Philip Davies
The problem with the hon. Lady’s intervention is that I have been able to speak for only a few seconds before people like her have tried to intervene. I have generously taken hon. Members’ interventions to allow them to have their say, but that has prevented me from setting out my argument. The solution to her dilemma is for her to allow me to continue my speech without intervening because she may then hear my arguments. It appears, however, that she is not interested in listening to anyone else’s point of view because she has already made up her mind. She might wish to pass on that lesson to members of the UK Youth Parliament, but I am not sure that it is particularly healthy.
I am all for the UK Youth Parliament and for encouraging young people to participate in politics, but is it not sad that the best way that the assembled brainpower of the House can think of to get more young people involved in politics, engaged in the political process and inspired to want to become MPs is to allow them to hold a debate once a year in the House of Commons Chamber? Is that the depth of our imagination?
Mr Nuttall
My hon. Friend touches on the crucial point that simply holding a debate—a one-off debate or annual debates—in the Chamber runs the risk of taking away these people’s lifelong interest. Does he agree that one’s interest in politics over a long time is driven by the desire to sit on these green Benches?
Madam Deputy Speaker
Order. May I remind Members of the procedure of the House? Interventions are supposed to be brief, not speeches in their own right. I know that everyone is really interested in the debate and that the hon. Member for Shipley (Philip Davies) has said that he would like to make progress on his main points, so if interventions were a little briefer, that would help.
Philip Davies
I am grateful to you, Madam Deputy Speaker.
My hon. Friend makes a fair point in the sense that the people who proposed using the Chamber last time round argued that the Youth Parliament could not go back to the House of Lords or Westminster Hall because, having already been there, its members were bored of them. The logic of that argument, as my hon. Friend says, is that the more time they stay here, the more bored of it they will become, so they might feel less inspired to want to come here as MPs because they have already done so.
Representing one’s constituency in Parliament is a tremendous privilege. Everyone in the Chamber will have worked incredibly hard to achieve what for many is a lifetime ambition of representing their constituency in Parliament. It is a great privilege finally to take one’s seat. Why would we want to undermine that achievement by allowing people who have not gone through the rigmarole of getting here to take their seats in the Chamber? To come back to the point made by my hon. Friend the Member for Suffolk Coastal (Dr Coffey), why is the UK Youth Parliament, worthy as it is, so special? If the argument is that young people do not feel that there is sufficient focus on their issues and, therefore, such a debate gives them an opportunity to advance them, I should argue that many of my constituents feel that pensioners’ issues are not particularly well covered in Parliament.
Philip Davies
I will in a moment.
Why should the National Pensioners Convention not be allowed to use the Chamber? What is so special about the UK Youth Parliament to the exclusion of any other group?
Philip Davies
I shall give way to the hon. Member for Wirral South (Alison McGovern), because she caught my eye first.
Alison McGovern
Does the hon. Gentleman believe that the privilege and specialness of being a Member is the act of representing our constituents or the act of sitting on these seats?
Philip Davies
The hon. Lady seems to advance the argument that these seats are no more than furniture and that they of are no importance. She nods her head, so she clearly agrees that we are sitting on furniture that is neither here nor there. That may be her view, and it is perfectly respectable, but I do not share it. When she shows her constituents around this place, does she say to them, “We’ll not bother going into the main Chamber, because it’s just a row of seats, a few benches, a bit of furniture, to be honest. We’ve got furniture all over, and these seats are no more important than any other, so we’ll miss out the Chamber and go somewhere else because we’re not interested”? I suspect not, because these seats represent a bit more than what she just indicated—furniture.
Philip Davies
Of course. I shall give way to the hon. Member for Chippenham (Duncan Hames) in a second.
Mr Gray
I disagree with my hon. Friend, but he is making a fine speech. The hon. Lady is being wholly illogical, is she not? If she is arguing that these Benches are merely bits of furniture and it does not matter who sits on them, why are they so special to the Youth Parliament? It could equally well sit in Westminster Hall, the House of Lords, Church House or anywhere else. The point about this Chamber is that it is an incredibly special place; it is an incredible privilege to be here; and, therefore, for the young people it is an incredible privilege to come here. To try to contend that these Benches are merely nothing seems to me to miss the logic of the argument altogether.
Philip Davies
My hon. Friend makes a very good point, and, although we approach the issue from different perspectives, I applaud at least the consistency of his argument. He is absolutely right to suggest that those people who say that, on the one hand, it is a special gesture to allow the UK Youth Parliament to sit here and, on the other, that it is just a row of benches, directly contradict themselves.
Philip Davies
I shall give way first to the hon. Member for Chippenham, because I promised him that I would.
Duncan Hames
The hon. Gentleman’s first argument, therefore, rests on his own sense of self-importance. However, on his question about what is so special about the UK Youth Parliament as opposed to the other candidates who might use this Chamber, does he accept that many of its members were not even entitled to vote in the elections in which we all stood as candidates, and, indeed, were not eligible to be candidates themselves?
Philip Davies
The hon. Gentleman makes a perfectly reasonable and fair point, and I do not decry his position, but I ask him to reflect on the fact that prisoners are not allowed to vote in elections. Is he saying that we should hold a debate here just for prisoners? The royal family are not allowed to vote at elections, so perhaps he is suggesting that we open up the Chamber so that they can have a debate. Members of the House of Lords are not allowed to vote, so perhaps we should open it up to them if they get bored of their Chamber. The UK Youth Parliament became bored of its chamber and we allowed its members in here, so perhaps the hon. Gentleman is suggesting that, if the House of Lords gets bored of its Chamber, we should make room for its Members on these Benches.
Is the hon. Gentleman really saying that anybody who does not have a right to vote in elections in this country should be eligible to hold a debate here? What about all foreign nationals? They are not allowed to vote. Should we have an annual debate for foreign nationals in this Chamber because they have the misfortune of not being eligible to vote in elections? I respect the hon. Gentleman’s point of view, but his argument is nonsensical.
Gavin Barwell
After half an hour, we have come to the absolute crux of my hon. Friend’s argument. He said that the work that all of us had done to get here was undermined by allowing other people to sit in this Chamber. Is he really suggesting that he, himself, and his status as an MP have been undermined by what happened last year, and that all other Members have been similarly undermined? To do him credit, it seems to me that based on his performance tonight he has not changed at all.
Philip Davies
I am not sure whether to take that as a compliment or an insult, although knowing my hon. Friend as I do I shall take it as a compliment. He would not wish to suggest anything else.
The point that I am making is that the motion is wholly illogical. It makes absolutely no sense whatever, because all the justifications for allowing the Youth Parliament to sit here are justifications for allowing lots of other organisations to do the same. The hon. Member for Worsley and Eccles South and the hon. Member for Bermondsey and Old Southwark made the great point that one of the great features of the Youth Parliament debate last year was that so many people from ethnic minorities took part. If that is the rationale for allowing it to be here, presumably the hon. Lady will advocate that the Muslim Council of Britain should have its meetings here. If we want lots of people from ethnic minorities here, the council would be a prime candidate.
Barbara Keeley
In raising the point about ethnic diversity, the hon. Gentleman misses the point. The point is that the UK Youth Parliament, through its work and how it elects its members, is more diverse than this House. That is impressive.
Philip Davies
That may well be the case, but is the hon. Lady really suggesting that any organisation that happens to have a more diverse make-up than the House should therefore be entitled to have a debate here? That is the logic of her position. The make-up of the Youth Parliament may well be more diverse, but that is no argument for allowing it to have a debate in this Chamber.
Julie Hilling (Bolton West) (Lab)
Does the hon. Gentleman not realise that the UK Youth Parliament is elected on a system based on constituencies? Each local authority area has a certain number of places at the Youth Parliament. The young people fight elections against other young people, so they have some legitimacy as members of that Parliament. What would be better than for the UK Youth Parliament to come to the mother of Parliaments and sit here to debate for one day? I cannot understand why some Government Members are resistant to that.
Philip Davies
The hon. Lady raises a perfectly valid point, and I do not wish to decry it. If her argument is that we should allow all organisations with democratic legitimacy to debate in the House, it is perfectly reasonable—I am sure that all my local parish councils will look forward to their day in the sunshine, when they have their debate. I suspect that many people in my parishes feel that national significance is not given to all the issues that they debate. Perhaps members of my local authority in Bradford will look forward to their day in the spotlight when they can have a debate here. If the hon. Lady’s argument is that all organisations with some democratic accountability should have a debate here, it is perfectly valid, but she still has not given any reason why that should apply only to the UK Youth Parliament.
Martin Horwood
I must first apologise to the hon. Gentleman for having forgotten his speech from last year; I cannot think what erased it from my memory.
Is not what makes the UK Youth Parliament so special that it is so closely modelled on this place? As the hon. Member for Bolton West (Julie Hilling) pointed out, it has contested elections for constituencies closely modelled on our own and the procedure is based on ours. UK Youth Parliament members have therefore expressed great respect and gratitude for this place. Does the hon. Gentleman not think it a bit mean-spirited and churlish for us not to return the compliment?
Philip Davies
I do not accept the premise of that argument; the basis on which Youth Parliament members are elected is not exactly the same.
Mr Peter Bone (Wellingborough) (Con)
My hon. Friend is making a powerful speech as usual. I had not intended to intervene, but on the last point I should say that the difference between the Youth Parliament and this Parliament is that we are allowed to stand under party labels, whereas Youth Parliament members cannot. It is not the same as this Parliament.
Philip Davies
My hon. Friend is right about that technical difference between the Youth Parliament and this one. I am not sure that that negates the point made by the hon. Member for Cheltenham (Martin Horwood); any Parliament should be made up as it sees fit. However, I do not particularly accept his premise to start with. He is scrabbling around trying to find what is different about the UK Youth Parliament as opposed to any of these other worthy bodies.
I will tell you, Madam Deputy Speaker, what is different about the UK Youth Parliament and its relationship with this Chamber. What is different is that we have, in my opinion, the sight of a lot of very sad people trying pathetically to ingratiate themselves with young people in their constituencies, which is absolutely painful to behold. They think that this is a trendy course to follow. If they want to try to look trendy with their constituents, they will argue that they want to have the UK Youth Parliament sitting here so that they can go back and say, “I’m trendy, I supported you.” It is frankly rather pathetic. That is the only difference between the UK Youth Parliament and all these other bodies, however hard hon. Members scrabble around for differences between it and anything else.
Steve Baker
I am not sure that there are that many young people in my constituency judging from many of the meetings that I go to. I think that my hon. Friend is being quite disingenuous towards those of us who are taking this debate very seriously. I came here this evening to hear what he had to say, in all seriousness, to persuade me that I should not vote to let young people come and sit here for one day to express their respect for British democracy. I must say that after all I have heard from him, I am increasingly persuaded that we should let young people come and sit here.
Philip Davies
My hon. Friend is perfectly entitled to take that view. He said that he wants to listen to the arguments; well, I have got on the record only one paragraph of my speech because I have been dealing with hon. Members’ interventions. My hon. Friend is a very diligent local MP, but I am sure that if he looks a bit harder, he will find some young people in his constituency, and then he can ask how many of them are desperate to come and have a debate in this Chamber. I think he will find that that is not near the top of their list of priorities. I could be wrong.
Philip Davies
I give way to my hon. Friend, because I promised him earlier and forgot.
Adam Afriyie
It seems to me that my hon. Friend is going through a tick-box list of variables and characteristics of the various different organisations, and then going through the arguments one by one and trying to discount each individual argument, or arguing that that single variable is not the variable on which we should make the judgment. In sophisticated argument, and in making sophisticated judgments, one takes multiple variables and judges them all together in the round, not one by one. As he goes through each of the variables, he is agreeing that that variable is pretty much true or valid, but then saying that that on its own it does not seal the decision to make the judgment. I put it to him that if one is a little more sophisticated, one makes the judgment by taking all the variables and saying, in a combined fashion, that that therefore tips the judgment in favour of allowing them to be here.
Philip Davies
I applaud my hon. Friend’s honesty. In effect, he appears to be accepting the point that I have been making in dealing with interventions—that there is nothing unique about the UK Youth Parliament and its composition that means that it should uniquely be able to use this House—but exercising his judgment in believing, taking everything into account, that theirs is a different and special case compared with everyone else. That is a perfectly valid point and a perfectly respectable argument, but I am delighted that he appears to be agreeing with the thrust of my argument that there is nothing unique about the make-up of the UK Youth Parliament that means that it should uniquely be able to do this.
Andrea Leadsom (South Northamptonshire) (Con)
Does my hon. Friend accept that at this hour, and bearing in mind how many hon. Members have now left the Chamber, it seems a little unfair to be monopolising the debate when he has been such a strong proponent of a clear, honest and open debate about this very important subject? Does he agree that there may be others in the Chamber who wish to look at this more as an opportunity for young people to promote democracy and to understand their democratic rights, and less about his desire to keep this Chamber specifically for the benefit of its Members?
Philip Davies
My hon. Friend makes a curious point. She says that I am monopolising the debate, but what I am actually doing is giving way to Members who want to intervene. It seems strange to make the case that I am monopolising the debate by allowing Members to intervene. If I were trying to monopolise it, I suspect that I would not allow any interventions.
If my hon. Friend looks at the motion on which we divided earlier, she will see that she supported a motion to allow this debate to last until any hour. I think I am right in saying that she walked into the Aye Lobby to vote for that. It is no good voting to allow a debate to continue until any hour and then complaining when it lasts until any hour. I suspect that in future, she might wish to vote no so that the debate does not last until any hour. I am sure she will look more closely at the Order Paper in future.
Andrea Leadsom
I would just make the point that the motion that we carried earlier was not to allow my hon. Friend to speak until any hour.
Philip Davies
I think I am right in saying that it was to allow any Member to speak until any hour. I will be delighted to allow my hon. Friends to speak until any hour later on. I am sure, Madam Deputy Speaker, that if anything I have said so far had been out of order, you would have told me so. From the fact that you have not, I suspect that you are content that the things I am saying are relevant to the debate.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I am exceedingly grateful to the hon. Gentleman for giving way. May I ask him a question on what I think is the crux of his speech? Does he believe that these green Benches and the right to use them belong to us as Members, or does he believe, as I do, that they and all of Parliament belong to the people who send us here?
Philip Davies
The hon. Gentleman may feel that, in which case tomorrow during Prime Minister’s questions he will presumably invite one of his constituents to sit in his place. It is not the case that by definition, any of our constituents can come and sit themselves here on these Benches. In fact, he may have noticed that usually, as he gives his constituents tours, there are signs up on the seats saying, “Please don’t sit here”. He appears to be on the verge of supporting the principle that some of his constituents can come and sit on these Benches but others cannot. There is plenty of time for the debate, so I am sure he will wish to tell us in his own words why he believes that and why some of his constituents are second-class citizens.
When a young person comes to me and asks me to talk about Parliament and politics, I always tell them that when a politician is given a problem to solve, their solution will always incorporate two ingredients. The first is that they have to be seen to be doing something, which is the bane of politicians’ lives. I long for the day when a Minister stands at the Dispatch Box and says, “Well, actually, that’s got nothing to do with me. It’s for other people to sort out for themselves.” They never want to underestimate their importance. The second ingredient is that their proposals must not offend anybody. If hon. Members have not already worked that out for themselves, I ask them to look out for what happens whenever a politician is given a problem. If a politician can find a solution that incorporates looking as though they are doing something and not offending anybody, they will jump on it at the first possible opportunity.
That appears to be what we are doing this evening. We want to engage more young people in politics, so what is being proposed is, “We have to look as though we are doing something, so we should let young people sit in the House of Commons Chamber. That does not particularly offend anybody, so let’s go for it.” However, that does not deal with why young people are so disengaged with the political process. If any Member really thinks that this sticking plaster will mean that young people will start turning out in droves at elections or engaging in the political process all of a sudden, I believe they are mistaken.
Bob Blackman (Harrow East) (Con)
I am grateful to my hon. Friend for giving way so far into his speech. As parliamentarians, we exist to inspire people to come here—I think we would all accept that. Knowing that this debate was coming up, I spoke to the representatives of my area, who were desperately looking forward to the opportunity to come here and have their say. Did he consult his representatives, and what did they have to say?
Philip Davies
I do not doubt that my hon. Friend had good reason to be asleep when I dealt with a similar intervention earlier—I am sure that my speech sends everybody to sleep. It might seem a long time ago, but I remind him that I said that I had spoke to the MYPs in my area, and they did not mention that they wanted to have their debate in the Chamber.
Bob Blackman
I rise again to ask a specific question. Knowing that this debate was coming up, did my hon. Friend consult the people who are elected to come here and have their say? The point is that young people who have fought elections for the opportunity to come here are keen to take it up, and we as parliamentarians should not stop them.
Philip Davies
My hon. Friend’s experience may be different, but his intervention would have been better directed at the Deputy Leader of the House—[Interruption.] If the hon. Member for East Dunbartonshire (Jo Swinson) will control herself, I can finish my point. If my hon. Friend were so desperate for every hon. Member to speak to their MYPs before the debate, he should ask the Deputy Leader of the House why the Government tabled the motion this morning without any warning. He is quick off the mark—as ever—but if he wanted all hon. Members to hold a wide consultation with their MYPs, he should suggest that his and my hon. Friends do not support the motion tonight, but allow themselves to take stock and revisit the situation at a later date. If that is his suggestion, I will not disagree with him—it would be a perfectly valid argument—but if he is worried that there has been insufficient consultation with MYPs, he should address that to the Deputy Leader of the House, because the motion was put on the Order Paper only today.
Jo Swinson
Far be it from me to suggest that hon. Gentleman did not begin writing his speech before today given that it is has lasted nearly an hour, but the motion was on the Order Paper yesterday. Given the medium of e-mail, the fact that he is such a strong supporter of the Youth Parliament and that he is speaking at such length, I am surprised that he could not find time in the past 48 hours to consult MYPs from his area.
Philip Davies
The reason we are having this debate tonight is not the fact that the Government have given it time, but the fact that they were unable to sneak the motion through at the end of play yesterday without any objection. As the hon. Lady is so keen to debate such matters, I am surprised that she was not here last night to object to the motion going through on the nod. If she wants to give a lesson and set a good example to MYPs, she should advocate debates. Why was she not up complaining that we were setting a bad example by simply nodding a motion through at the end of play without debating it? I am slightly concerned that she is not doing enough to set a good example to MYPs.
James Wharton (Stockton South) (Con)
Does my hon. Friend genuinely believe that those MYPs who have stayed up to watch the debate tonight will be amazed by the proceedings, the quality of the debate, and how we spend time to debate such motions when other important matters of the day go by undebated here, or are given rather less time and significantly less attention?
Philip Davies
I am certain that MYPs who are avidly watching tonight will have been impressed by my hon. Friend’s intervention, and that he has enhanced their opinion of the House. However, I hope he is not suggesting that we should not debate this motion. If he thinks that the debate should not be till any hour, I presume that he did not vote for previous the motion. The Government could have tabled a motion to limit the debate so that it could last only an hour, an hour and a half, two hours or three hours, but they did not do so. It appears—I am sure he will correct me if I am wrong—that he voted for the debate lasting till any hour. Given that, I am sure that he will happily live with the consequences. Perhaps in future he will not listen so avidly to the Whips when they tell him how to vote. He may be signally disappointed again in the future.
Geoffrey Clifton-Brown (The Cotswolds) (Con)
I have listened carefully to my hon. Friend’s concise speech for nearly an hour and he has taken a fair few interventions. He has made two germane arguments. The first is that this gathering could take place anywhere other than in this Chamber and, second, that it sets a precedent. If it does set a precedent, we will have to have another debate and a full chance to debate it. I would be grateful if he would now address himself to the actual harm that he sees in allowing the members of the Youth Parliament to debate in this place when the Chamber is not being used for the legitimate business of this House.
Philip Davies
The point is that I am a Conservative—as is my hon. Friend—and the principle of Conservatism is embodied in the saying, “If it is not necessary to change, it is necessary not to change.” As a Conservative, I believe that the onus is on those who propose change to make the case for that change. The case for no change does not need to be made. The point that I am making in my contribution—if I am allowed to get on with it—is that the case for change is a poor one. All of the arguments that have been given are spurious and do not stand up to much scrutiny. I urge my hon. Friend to ask other people to make the case for change, because they have not done so thus far.
We were told earlier that allowing members of the Youth Parliament to sit here will inspire them to get involved in politics. That is one of the arguments that was made last time. It was said that we must allow the UK Youth Parliament to sit here, because if we do so they will be inspired and become interested in politics. That is a curious argument because, by definition, those people who are members of the Youth Parliament are already interested in politics. That is why they are there. If our motivation is to try to inspire more young people to get involved in politics, we should be asking those young people who are not members of the Youth Parliament to come and have a debate here, because that might encourage them to get involved in the Youth Parliament. Why would we want to limit the opportunity to those members of the Youth Parliament who are already interested in politics?
Mr Nuttall
Does my hon. Friend agree that what is likely to inspire young people is not so much where their organisation meets, but the strong opinions of someone who is prepared to stand up and speak out for the things that they really believe in—as he is doing?
Philip Davies
My hon. Friend is absolutely right. Unlike all the previous interventions that I have taken, he has pre-empted a point that I wished to make myself.
Stella Creasy
I thank the hon. Gentleman for giving way, because obviously we have not heard much from him this evening. Will he clarify that there are some instances in which he would allow young people to use the Chamber? In which case, it would appear that his objections are to the UK Youth Parliament rather than to young people sitting in this Chamber. That would be a useful clarification of his views.
Philip Davies
The point that I am making is that there is no logic to the case for allowing only the UK Youth Parliament to use this Chamber. If people take the view that no one else should be allowed to use the Chamber, it would be a sensible and rational point of view. If someone takes the view that anyone should be allowed to use the Chamber, that would be an equally valid point of view. For the life of me—[Interruption.] The hon. Lady makes an intervention, but she does not seem to be particularly interested in the argument. I can only reiterate that she must have already made up her mind.
The argument that has not been made, and which the hon. Lady must make later, is why the UK Youth Parliament alone should be allowed to use the Chamber once a year for the duration of the Parliament, and why she wants to exclude every other organisation from using the Chamber. Why is that the case? Why is she making that point? It is the point that I, for the life of me, cannot understand. The Minister did not set out particularly well why the Government believe that only the UK Youth Parliament should be able to use the Chamber.
Barry Gardiner
The hon. Gentleman asked the difference between the Youth Parliament and any other. He has heard—although he may not have listened to it—the response given three times this evening: every other group has a right to stand for Parliament, but those in the Youth Parliament do not, by virtue of their age. They are precluded from doing that. That is why they should have the opportunity to come and debate these things here.
Philip Davies
The hon. Gentleman seems to think that members of the UK Youth Parliament are unique in not being able to vote or stand for Parliament at a general election. That, I am afraid, is not the case. They are not unique. No young people have the opportunity to participate in general elections, not just members of the UK Youth Parliament. As I made clear earlier, the royal family do not have the opportunity to vote in elections. [Hon. Members: “Sit down!] Well, this is a repetition of an intervention. Does the hon. Gentleman not accept my point? Prisoners do not have the opportunity to vote or stand for Parliament. People who are bankrupt do not have the opportunity to stand for Parliament. Again he has failed to say why the UK Youth Parliament is unique. Yet again, he has spectacularly failed to answer that point.
Philip Davies
I am grateful to my hon. Friend, who certainly is not the antithesis of Conservatism. I am checking whether the Whips are still writing notes, because it would be helpful if they have noted that I am not the antithesis of Conservatism: that would be helpful for my career prospects. I am grateful that he made the point that I am the antithesis of Conservatism. Thank you for that, Madam Deputy Speaker.
My hon. Friend the Member for Bury North (Mr Nuttall) made the most salient point: younger people do not vote at general elections, not because we do not allow them to use the Chamber or because we do allow them to use it, but because we do not inspire them to vote. The onus is on us. [Interruption.] I note the laughter from the Liberal Democrat Benches, but the point I am making is that what inspires people to vote in elections is people who stand up and have clear views and beliefs and are prepared to stand on matters of principle. That is what inspires people to vote. Perhaps Liberal Democrats might wish to consider that.
It is delusional to pretend that we can carry on as we always have done and trot out the same meaningless stuff that will not offend anybody, or that we can go around saying nothing worth while or meaningful and hope that nobody notices, while claiming that allowing the Youth Parliament to sit in the Chamber will inspire young people to vote. Young people do not want to vote because they never hear arguments and ideas; they never hear a battle about ideas. I was lucky enough to be brought up to be interested in politics in the 1980s, when there was a clear difference between the main political parties. Whichever side of that divide one happened to be on, it was perfectly clear where we were. I was a great admirer of Margaret Thatcher as Prime Minister. She was the person who inspired me to enter politics. No doubt lots of Opposition Members felt exactly the opposite. They knew exactly which side of the fence they were on.
The problem that we now have with inspiring young people to vote is that when they listen to debates, they are not entirely sure which side they agree with, or even which side sticks up for their principles. Indeed, when Tony Blair was the leader of the Labour party and my right hon. Friend the Member for Witney (Mr Cameron) was the Leader of the Opposition, it was sometimes difficult for young people who were just getting interested in politics to know which side of the political divide they were on, or which way they should vote in an election. My point is that if we want to inspire young people to go out and vote in elections, the onus is on us to start having a battle of ideas and stand up for what we believe in, rather than just saying what we think might be popular or politically expedient.
To all those people who have been grandstanding in here about how important it is for the Youth Parliament to sit in this Chamber, let me say this. I hope that they will go away from this debate and think about what else they can do. Part of that battle might be about standing up and saying something controversial or unpopular every now and then—standing on a point of principle, arguing their point of view and trying to change public opinion, rather than just trying to follow it and saying “motherhood and apple pie” things, in order to get a nice little press release in their local papers. That is not what inspires young people to get involved in politics, and if people think that they can cover all that with an annual debate in this Chamber, they are sadly mistaken.
Other people may want to have debates in this Chamber—other people whose issues do not—
Madam Deputy Speaker (Dawn Primarolo)
Order. This may be a good opportunity to remind the hon. Gentleman and the House of Standing Order No. 42, and to draw hon. Members’ attention to the need not to allow their contributions to become somewhat tedious through repetition of the same arguments. I hope that in continuing the debate this evening, the hon. Gentleman and others will pay attention to that Standing Order.
Philip Davies
I am grateful to you, Madam Deputy Speaker, although I am not entirely sure to what in my speech you were referring. I am certainly open to clarification, but I hope that you will also accept that if an intervention is repetitive, I will still want to answer the question. If other Members mention a point that has already been mentioned, I will feel obliged to deal with it, but perhaps you could give me some guidance on that point.
Madam Deputy Speaker
Order. The hon. Gentleman has been speaking for a long time, and as he has pointed out, he has done his best to stay in order. However, staying in order does not include questioning the Chair with regard to the proceedings. I therefore hope that he will now continue to make the important points that he says he wants to make to the House, but which he has not already made.
Philip Davies
I am grateful to you, Madam Deputy Speaker. I take your intervention, which I absolutely accept, as a signal not to accept any more interventions. I will try to work on that basis, so that I can set out the arguments that I wanted to set out, but which I have been deterred from setting out by lots of people wishing to intervene in my speech. I hope that other people are just as generous when they make their speeches.
One of the arguments put forward for the Youth Parliament last time was that having its debate in this Chamber would raise its profile around the country. Hon. Members might have done some detailed survey work on that, but I would be interested to see all the opinion polls that show that the public now have a better grasp of the UK Youth Parliament than they did last year, before its debates took place. That was supposed to be one of the key measures of success last year, so I was surprised that neither the Deputy Leader of the House nor the shadow Deputy Leader of the House—nor, indeed, any of the many hon. Members who have made interventions—made the case by saying where it is clearly stated that the UK Youth Parliament’s profile is now much higher.
If we want to raise the profile of certain issues—youth issues may well be one of them—perhaps we can also raise the profile of other issues. I do not understand why we need the Youth Parliament to have a debate in this Chamber in order to raise its profile. Why would a debate held elsewhere not also raise its profile? I hope that Members who are in favour of the motion will deal with that point.
I would also like to talk, Madam Deputy Speaker—[Interruption.] Oh, Mr Speaker, I apologise. I want to deal with one of the interventions made by a Liberal Democrat Member who spoke about members of the UK Youth Parliament being unique in not being able to vote. The Liberal Democrats might like to have a word with their hon. Friend the Member for Taunton Deane (Mr Browne) who in last year’s debate made the same point that I have—that many people, including prisoners, do not have the right to vote. If my point of view is so unacceptable, Liberal Democrat Members might like to speak to the hon. Member for Taunton Deane.
Philip Davies
I think that is absolutely right, which brings me back to the thrust of my argument. What is so special about the UK Youth Parliament? Why is it so much more important than any other organisation? That is a particular point.
I want to move on to the point about cost. The Minister did not mention the cost. I hope that he will. I will certainly give way to him if he wants to make it clear. What estimate has been made as to how much it will cost for the House authorities to open up the Chamber for a day for the Youth Parliament? In last year’s debate, the figure bandied around—I have no idea whether it was accurate or not—was between £30,000 and £40,000. If the Minister would like to confirm or deny those figures, I am sure it would be particularly helpful. If that is an appropriate figure, I think that we should be discussing whether that is a necessary use of public funds in this age of austerity, and whether the money could be spent in a better way.
The views of members of the Youth Parliament were mentioned earlier by the Minister. Perhaps I can issue a challenge to him. He might like to go out and speak to young people in his constituency and ask them how they would like to see £30,000 to £40,000 spent for the benefit of the Youth Parliament. Would they want it spent on having a debate here? The answer may well be yes—I do not know—or would they prefer the money to be spent on other ways of engaging young people to take part in debates and engage in the political process? Is there no better use of money to deliver what we all want at the end of the day—more young people engaged in political activity and debate?
I was issued a challenge earlier about whether I had asked my MYPs about their views on having a debate here, but I would issue the same challenge to all hon. Members. Have they asked their MYPs how they would like to spend the money that is to be spent on this debate if they had a choice? If we ask people, “Would you like a Rolls-Royce?”, most will say yes. If we say, “Would you like a Rolls-Royce if you had to spend the rest of your life living in a tent to pay for it?”, they might say no. Before we say to people, “Would you like a debate in the House of Commons Chamber?”, we should put the pros and the cons and the costs to them, and then ask them for their view. It might well be a different view. Young people are just as sophisticated as other people here. They may well weigh up the pros and cons and come to a different opinion if all that is put before them.
Bob Russell (Colchester) (LD)
I would like to ask the hon. Gentleman a very simple question. In this age of austerity, in which he is anxious to ensure that money is not wasted, has he pondered the cost to the public purse of his antics over the last hour or so?
Philip Davies
I am not entirely sure what antics the hon. Gentleman is referring to. If he means giving way to lots of interventions, I would be very disappointed if he thought that that was some kind of antic. I thought that the whole point of a debate in this Chamber was that when people are making a speech and other people wish to intervene, they give way and allow them to make their point. If the hon. Gentleman is saying that he does not think that that is an appropriate thing to do in a debate, I find that very disappointing. I think I have been very generous in giving way to people’s interventions in order to allow them to make their point. I would not give way if people were not seeking to catch my eye. I hope that the hon. Gentleman is not suggesting that we should curtail this debate, too, in order to save costs. If he is, I should point out that I did not observe him in the No Lobby when he was invited to vote for a motion to keep the debate going “until any hour”. I presume that, like many others, he voted to allow it to last “until any hour”. If he does not want it to last until any hour, perhaps he should not have voted for that a few moments ago. Again, he has not thought through the consequences of his voting.
Mr John Leech (Manchester, Withington) (LD)
In the current age of austerity, would the hon. Gentleman also suggest that we ban visitors from the House of Commons to save money?
Philip Davies
I knew that it would be a mistake to give way to the hon. Gentleman. Perhaps we can have a chat in the Tea Room later and he can tell me exactly what his intervention meant, because for the life of me I could not understand a word that he was saying. I am sure that that is a reflection on me rather than on the hon. Gentleman, however, because I know that he always makes pertinent points.
Caroline Lucas (Brighton, Pavilion) (Green)
One of the reasons why many of us would like to curtail this debate is that it is no longer shedding any light on what we are supposed to be discussing. The hon. Gentleman has asked several times what inspires young people. May I suggest that what inspires them is debates about things that really matter—debates about withdrawal from Afghanistan, financial cuts and Trident—not debates about things that simply should not be controversial? I know a young person who is watching the debate now, and I know that he is horrified that we are sitting here at 12.20 am thinking that this is a good way to spend our time. May I please suggest that we do curtail the debate?
Mr Alistair Carmichael (Orkney and Shetland) (LD) claimed to move the closure (Standing Order No. 36).
Question put forthwith,
That the Question be now put.
Philip Davies (Shipley) (Con)
On a point of order, Mr Speaker. Is it in order for hon. Members to vote at a certain point in the evening for a debate to last until any hour, and then for those same Members to vote a few hours later for a closure motion?
Mr Speaker
The hon. Gentleman asked whether that was in order, and the simple answer is yes. If there are no further points of order, we shall proceed to the presentation of public petitions. I call Mr Peter Bone. [Interruption.] Order. I know it has been a long evening, and I am grateful to hon. and right hon. Members for their forbearance and good humour. May I just appeal to hon. and right hon. Members who are leaving the Chamber to do so quickly and quietly, because others will want to hear, as I certainly do, the presentation by Mr Peter Bone of the public petition in relation to the matter on the Order Paper.
Petitions
Mr Peter Bone (Wellingborough) (Con)
Good morning, Mr Speaker. I am delighted, at just after half-past midnight, to present this petition from the residents of Rushden in Northamptonshire and the surrounding areas, which concerns the redevelopment of a hospital site. Some 25% of the people in Rushden petitioned me to have an NHS facility on that site, but the local NHS has decided to put houses on it.
The petition states:
To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
The Humble Petition of residents of Rushden, Northamptonshire and the surrounding areas,
Sheweth that the proposed redevelopment of the Rushden Hospital site for housing is unpopular, ill-advised and detrimental to the residents of Rushden; that over 25% of the residents of Rushden petitioned the House of Commons for a new outpatient facility in the town, the majority wanting the new facility on the Rushden hospital site; that the proposal to build housing on the site instead of an NHS facility is unacceptable and the impact on the surrounding roads of a large housing development and the density of the development and the proposed cut-through to the Greenacre Drive Estate is wholly detrimental to local residents.
Wherefore your Petitioners pray that your Honourable House urges the Secretary of State for Communities and Local Government to urge the Department of Health to withdraw the planning application and further urges him to request that the District Council of East Northamptonshire and the County Council and the Primary Care Trust work together to provide a suitable health facility on the site.
And your Petitioners, as in duty bound, will ever pray, etc.
[P000844]
Mr John Leech (Manchester, Withington) (LD)
I would like to submit a petition on behalf of hundreds of the children, parents and friends of Cavendish primary school in West Didsbury in my constituency. They have signed a petition in support of the 1GOAL Send My Friend to School campaign, which calls on world leaders to ensure that all children around the world will have a primary school education by 2015. I suspect that this is the first time that a petition has been submitted on the Floor of the House in the form of a scarf.
The petition states:
The Petition of the constituents of Manchester Withington and others,
Declares that world leaders have promised that all children will have a primary education by 2015, but with only five years left to go there are still 72 million children missing out on an education completely.
The Petitioners therefore request the House of Commons to urge the Government to act quickly and decisively to ensure that the goal of all children obtaining a primary education by 2015 is indeed obtained.
And your Petitioners, as in duty bound, will ever pray.
[P000845]
Dangerous Dogs
(13 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Angie Bray (Ealing Central and Acton) (Con)
I am grateful for the opportunity finally to raise this difficult issue, which is not just a continuing problem for many of my constituents who find their visits to local parks and their movements on the streets and even on local buses blighted by intimidating dogs and their owners. This is a growing problem, and I am certain that it affects countless others in urban and suburban areas. I have been talking to the Royal Society for the Prevention of Cruelty to Animals and I have discovered that Ealing is the ninth-worst borough for this problem. According to some of the statistics, it seems to be the fifth-worst, so it is little wonder that so many of my constituents have wanted to raise their anxieties with me. I know that Ealing council takes the problem extremely seriously and that it is in discussions with a number of organisations to plan a way forward.
We need to be very clear about this issue because there are different aspects to what is quite a complex matter. One aspect is the dogs that are simply out of control. Not long ago, on Acton green, almost outside my house, a Rottweiler attacked a pet that was being walked there and injured it quite seriously. The Rottweiler had been rescued by a lady who had no intention of setting it on anything, but she clearly had not learned how to manage it properly. The RSPCA thinks that the best way forward in such instances is to give those owners some education in an early intervention to try to teach them how to be more responsible. I am sure that that is the right way forward. Getting the RSPCA lined up with specific cases may be a little difficult, but that is a discussion for another night.
I want to deal with an issue that is in many ways far more serious: dogs that are intentionally trained by their owners to be nasty and intimidating. That growing menace is always about young—almost always—men with large fierce dogs attached to a lead and usually fitted out with full studded collars. They are called status dogs, and that is all about machismo or certainly about displaying potential aggression. The dogs accompany those owners pretty much as a weapon, but, crucially, whereas carrying a weapon such as a knife involves a certain penalty, owning such dogs does not, which is exactly why they are the growing weapon of choice at the moment. Sometimes, drug dealers will use those dogs to protect themselves as they trade and perhaps to enforce their trade, particularly against rivals. Other people may train the dogs for fighting. Unfortunately, dog fighting is a lucrative sport, although rather a grotesque one. Other people are simply demonstrating who is boss on a piece of local territory.
Innocent members of the public who go into parks with their families and pets to enjoy a day out do not know whether those dogs will be let off their leads at any stage, and if they are, they do not know whether they will then run after them and attack them, their pets or, worst of all, their children. Frankly, it is absolutely unacceptable that, instead of being able to enjoy their day out, they must spend their time looking over their shoulders.
What can be done to tackle this menace? I am not expert in the field and it will be for others who are to find the right solutions. My purpose is to urge the Department for Environment, Food and Rural Affairs to get moving on the issue as quickly as possible.
I have received some ideas from the organisations that I have spoken to. First and foremost, I do not believe that going after dog breeds is the right way forward. I have my doubts about the Dangerous Dogs Act 1991. Pit bulls may look vicious, but they are not necessarily born vicious. Like any other dog, they are just born; what happens next can turn them into something altogether more unpleasant. The problem with pit bulls, of course, is their physical size and strength. If an owner sets out to turn them into something nasty, they turn into something quite lethal, but that is not how they start out. My contention is that we should be targeting not dangerous dogs, but dangerous owners.
Jane Ellison (Battersea) (Con)
I want to support that view. I represent Battersea, and Battersea dogs home is a great source of expertise. It says that those dogs come through its doors as the victims of irresponsible back-street breeding and irresponsible ownership. It is a tragic sight to go to the dogs home and see many dozens of abandoned dogs that have little chance of being re-homed because someone bred and treated them irresponsibly.
Angie Bray
I thank my hon. Friend for that intervention. I know Battersea dogs home well. In fact, I got my first rescue dog from Battersea dogs home, so I know what fantastically good work it does. It is very much involved in the discussions about how we can get more responsibility into dog owning. I look forward to hearing more from it about what it has to say.
Obviously, we must find out how we can best get rid of the threat in our open spaces. Who can do that? Obviously, we have the police and safer neighbourhood teams. Councils employ park rangers and dog wardens. Of course, the problem is one of resources. The Metropolitan police have also set up a status dog unit, which has been fully supported by the deputy Mayor of London, Kit Malthouse, who is doing a lot of work in this respect. The new unit is operating effectively throughout London, but it is still relatively small, so we need to think about how we get resources into addressing the problem. My local police are frank in telling me that if someone says that their dog has been attacked by another dog, the police will not intervene—they say that dogs fight each other—because they do not have the necessary resources. However, as I have pointed out, the problem is that if a dog is attacked today, that might be a child tomorrow.
Given the question of resources, I am wary about bringing back the old licensing system, which probably cost more than it raised. An annual round of licensing would impose an additional tier of bureaucracy on owners, and the trouble would be that the good guys would get the licences while the bad guys would ignore them. I am also aware that we must look after our pensioners, who often depend on animals for company more than anyone else, so I do not particularly want to impose anything on them. However, I might be persuaded of the case for a one-off dog licence—a life licence—that would involve making a payment when the ownership of a dog was taken up, provided that the revenue was properly ring-fenced for policing dangerous dogs.
Jake Berry (Rossendale and Darwen) (Con)
Last weekend, I visited Pets Corner on Bank street in Rawtenstall, which is a town in my constituency. Pets Corner will microchip dogs for less than £10. Does my hon. Friend agree that as the cost of microchipping has fallen to such an extent, and given that, unlike a dog licence, it is a whole-life solution, now might be the time to consider compulsory microchipping?
Angie Bray
We should consider microchipping because it offers a good approach to encourage more responsible dog ownership. Whatever else one says, it means that the owner is indelibly linked to the dog and will therefore be much more concerned about how it behaves, especially if they have to take responsibility for that. Microchipping has an important part to play and I welcome the fact that many rescue centres, including Battersea, send out all their dogs with microchips, which means that we know that they are properly registered, which is an important step forward. However, given that much of the problem is due to people who think that they and their dogs are beyond the law, I suspect that that will not be the whole answer to dealing with awful dogs.
I have been given a couple of straightforward, simple ideas that could really help without increasing the need for resources. The first, which was put to me by my local police, is the introduction of a new type of court order that would be attached to the sentence of anyone found guilty of any kind of crime involving violence or drug dealing. I am not saying that the order should apply to the first offence, but it might apply to a second and it almost certainly should apply to a third. The court order would provide that a person found guilty of such a crime would be banned from being in control of a dog in a public place for x years—I leave it to others to decide the time, but I would suggest about five years. The police say that they know their local criminals, so if they saw those people out and about with a dog, they would find it easier to know that they should intervene quickly. I purposely talk about being in control of a dog rather than owning one because the order would mean that those people would not be allowed to have any dog with them over that time period, including if they were walking their grandmother’s poodle. That approach would allow the police to intervene on people with a violent record.
My second simple idea, which I know that Ealing council is considering—I am sure that other local authorities are also considering it—is to attach conditions on dog ownership to tenancy agreements. Those conditions could range from banning dogs from certain properties, which would be a good idea for tower blocks, to limiting ownership to only one dog. The conditions could certainly deal with dogs that are a nuisance to neighbours. If neighbours complain about a dog, it should be easy to ensure that either the owner agrees to get rid of the dog or they have to move out. The microchipping rules would help with that, too, because if dogs that run amok are microchipped it is much easier to find out who owns them.
I appreciate that those measures will not deal with the whole problem, but they would at least begin to provide people with some reassurance that the worst owners were being targeted, and that their ability to use intimidating dogs to threaten their community was being removed.
I am a long-standing, enthusiastic dog owner. I have had two rescue dogs. The first came from Battersea dogs home and the second from the Blue Cross, and both were difficult dogs to begin with. One in particular had had a bad start in life and had been badly treated by their owner, and both were tricky, but my partner and I devoted a lot of TLC to them and in the end they turned out to be very nice dogs. The reason why I mention this is that, importantly, dog ownership cannot be taken lightly. It requires a certain amount of dedicated time in which the dog must be socialised as well as cared for. The dogs that I have been largely concerned with in this debate are those that receive none of that TLC. They endure a life of cruelty and training to turn them into something lethal. Their owners have absolutely no sense of responsibility towards the communities in which they live, and it is precisely those people whom we need to target.
I know that the issue is already under consideration at DEFRA, but we do need more urgency. During these summer months, in particular, when people want to be out enjoying their open spaces, it really is offensive when they have to share quite limited space with someone who is setting out to make them feel nervous and intimidated. That is a real blight on people in London, in suburbs and in urban areas throughout the country, and we really need to lift that blight as soon as possible.
Stephen Pound (Ealing North) (Lab)
I congratulate the hon. Member for Ealing Central and Acton (Angie Bray) on securing this Adjournment debate about a subject that is of increasing importance not just to those of us in the suburbs, but to people throughout the country.
Last Sunday afternoon I was delighted to be present at the Framfield allotment association, and I met a brindle Staff that had been rescued from a dog-fighting ring. That dog had been saved, and it revealed a gentle sweetness of character, but, had it remained with those who tortured it to torture other people, it would have become the slathering beast that they wished it to be. Dogs can be rescued, but importantly, we are faced with a problem that revolves around three areas.
First, dogs are used in the commission of crime. They can be used to force someone to hand over their possessions. People are threatened with the dog, which is a weapon in that criminal activity, and they are also used in many cases to guard drug dealers or drug stashes.
Secondly, there is dog fighting, but the Metropolitan police force has been very proactive, and the hon. Lady tangentially referred to Inspector Jenkins of Ealing police station, who has been closely involved in dealing with that.
Thirdly, there are the dogs that are simply brought up in chaos. One can walk into a small flat on the sixth or seventh floor of a tower block and see eight or nine dogs running wild, and that is cruel to the dogs, vicious for the children who live in the flat and destructive to the community.
The problem is evident; the solution is one that we have to address. I have always admired the Minister, but I have some sympathy for him in this case. We are asking DEFRA to be the lead Ministry, but the subject moves into the Home Office’s jurisdiction and a number of others. It is a truism that we in this House enter into legislation involving dogs with considerable trepidation, because our track record is not brilliant, but we are at the stage where we need a lead Minister, a lead agency and a lead Ministry to pull together those various strands. We need a solution to the problem of the ordinary family enjoying an al fresco afternoon and meal while quietly picnicking in, say, Pitshanger park, a piece of land that abuts both our constituencies, when suddenly a dog comes bursting through to the delight of the people who are supposed to be responsible for it. That is threatening, bullying, vicious and dangerous, and it destroys young children’s trust in open spaces and the open air.
We need to have a solution to the problem at the time. The hon. Lady is absolutely right; we have the police, the safer neighbourhoods teams, the dog wardens, the RSPCA and so many other agencies. We need to draw up an established protocol, hopefully Government led, which can pull together those agencies and link up with the other issues. I mentioned the Home Office, but the Department for Communities and Local Government is also relevant. Most council property and registered social landlord tenancies contain the clause that the tenancy will be nullified if its terms and conditions are not kept to. Although not all of them specifically exclude dogs other than companion animals and guide dogs, all—almost without exception—will have a clause saying that the tenant or their agents are enjoined not to cause annoyance or nuisance to neighbours. The dogs that we are discussing are demonstrably that.
We have laid the problem before the Minister, and we look to him with confidence to provide the solution. The extent and scale of the problem is exemplified by this meeting across the Chamber; just as the hon. Member for Ealing Central and Acton and I meet in Pitshanger park, we meet across the Chamber today. The problem being debated is increasingly serious and, sadly, we are at the stage where a child could be seriously hurt. A whole community is being threatened. We look with confidence to the Minister for a solution.
The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)
I congratulate my hon. Friend the Member for Ealing Central and Acton (Angie Bray) on securing this debate on an important subject. I assume that it is her first Adjournment debate, and she has got off lucky; my first Adjournment debate was called at 3.15 in the morning, so this is early by comparison.
I fully understand the importance of the issue that my hon. Friend raises. Members who, like me, represent more rural constituencies do not see the problem as much as my hon. Friend and the hon. Member for Ealing North (Stephen Pound) do. Nevertheless, we are very aware of it. I respond directly to the challenge of the hon. Gentleman: the issue of dangerous dogs falls squarely within the remit of the Department for Environment, Food and Rural Affairs. He is right about cross-cutting with other Departments. My noble Friend Lord Henley is directly responsible for that part of the Department’s activities, although, as I shall try to demonstrate, there are areas on which we work closely with other Departments.
We take the issue seriously—so much so that the coalition agreement makes an explicit commitment to tackling the problem. Both hon. Members said that there are many strands to the problem. There is the irresponsible ownership—at the lesser end, but still a serious issue—and there is the clear problem of dogs being used to intimidate and as part of the commission of crime. Furthermore, there is organised dog fighting. All those issues have a knock-on effect on the welfare of the dogs, let alone all the other problems that they cause society.
Most of us find it difficult to understand why people would want to keep a dog, particularly one of the more vicious breeds, as a status symbol. The need that those people feel to have such a dog alongside them to bolster their image is probably a sign of their inadequacy. Nevertheless, it happens and we have to address it.
Many suggestions have been made. As hon. Members must be aware, the previous Government commissioned a consultation on the problem. That period has finished and we are analysing the results, which we will publish. I was pleased to hear my hon. Friend say that she does not necessarily believe that the issue requires more legislation. She made a couple of suggestions, which I shall come to. As I shall try to describe, there is a plethora of legislation on the matter—too much, some would argue. It is often a matter of enforcement. The Dangerous Dogs Act 1991 has become a bit of byword for hasty legislation, but the reality is that in the 19 years since it was passed nobody has come forward with a comprehensive alternative.
Martin Horwood
I am grateful, given the hour. Is the Minister aware of the Bill proposed in another place by my noble Friend Lord Redesdale, which is intended to tackle some of the issues to do with ownership and microchipping, while shifting comprehensively away from the specific list of obscure breeds towards the deeds and behaviour of the dog, and indeed the owner, which seems to get to the crux of the issue that the hon. Lady rightly identified? What is his view of that proposed legislation?
Mr Paice
We are very much aware of Lord Redesdale’s Bill. My noble Friend Lord Henley is looking at it very carefully and trying to work with Lord Redesdale on it. We have our doubts about some aspects, but I recognise that it is a noble attempt to try to deal with the problem.
Part of the problem has been the lack of enforcement across the country. We clearly want to see better enforcement, and we have provided better guidance and funding for training in police forces. Both hon. Members who spoke referred to the Metropolitan police, who have their specialist status dogs unit to target the problem. That has resulted in more dogs being seized year on year in the London area. I understand that between April 2004 and April 2005, just 42 dogs were seized, by 2008-2009 the figure had risen to 719, and it is expected that in the past year up to April 2010 the figure will have been 1,100. That dramatic increase demonstrates the importance of the issue.
My hon. Friend the Member for Ealing Central and Acton referred to council housing leases and social landlords. Earlier this year, the Department for Communities and Local Government published guidance for social landlords entitled, “Tackling anti-social behaviour: Tools and powers—toolkit for social landlords”. That includes the powers available under current legislation for social landlords to tackle dangerous dogs. More recently, DEFRA facilitated the production of guidance for magistrates courts designed to help to speed up cases involving dangerous dogs. Last year, DEFRA issued widely welcomed guidance aimed at enforcers of the legislation. It was written in association with the police and the RSPCA, as well as some local authorities, to set out the law in detail and provide advice.
I want briefly to refer to the existing legislation and then address some of the points that may take us forward. The 1991 Act provides the police with powers to take action when any dog becomes dangerously out of control in a public place or a place where it has no right to be. Offences under that legislation have risen considerably. The Act also prohibits the keeping of certain types of dog. I understand what my hon. Friend and the hon. Member for Cheltenham (Martin Horwood) said about the problems of specific breeds. However, the fact is that in 2004, 17 people were successfully prosecuted for that offence, and by 2008 that figure had risen to 115. The maximum penalty for keeping a keeping a prohibited type of dog is six months imprisonment, a fine of £5,000, or both.
Importantly, the police have also said that the prohibition of certain types of dog is useful in tackling organised dog fighting, as it is predominantly pit bull terriers that are used. I hear the point made by my hon. Friend about the problem being the owner, not the dog, but there is a bit of a caveat to that—certain dogs are far more predisposed to aggression. Why else does everybody want to use a pit bull? Clearly it is easier to use them; we do not see many fighting chihuahuas around the countryside.
Mr Paice
No, I cannot, I am sorry. I am really tight for time.
The 1991 Act strengthened the powers available to magistrates courts to place controls on dogs under the Dogs Act 1871. Those controls can be about muzzling a dog, keeping it on a lead, excluding it from specific places or having it neutered. The maximum penalty for failing to comply is £5,000.
The Offences Against the Person Act was passed back in 1861 but is still valid because of the point that the hon. Member for Ealing North made—it can be used in a situation in which people use a dog as a weapon. The maximum penalty is five years in prison. There is also the Animal Welfare Act 2006 and the Clean Neighbourhoods and Environment Act 2005.
The consultation that was carried out recently addressed a range of issues, such as extending the current criminal offence in the 1991 Act of allowing a dog of any type or breed to become dangerously out of control to private property where a dog has a right to be but where it may well still be a danger to young children. There is also the serious problem of attacks on public workers, particularly postal workers, in gardens or drives. It also invited comments on whether the prohibition of certain types of dog should be repealed, as we have discussed, or extended to other breeds.
The idea of compulsory insurance was given short shrift. The then Government put the matter in the consultation and rightly decided quickly that it was not the right way forward. People’s advice and views were requested on the introduction of dog control notices, and the Royal Society for the Prevention of Cruelty to Animals has indicated that improvement notices have been successful. It considers that dog control notices could also work well.
Some people advocate compulsory microchipping. At the moment, our view is that as with licensing, the people whom we are trying to address would not do it. One could argue that dogs found without a microchip would be destroyed, but we would end up with the serious problem of having to destroy a large number of dogs. Again, the majority would be paying for the sins of the minority.
Finally, my hon. Friend proposed that anyone convicted of a violent or drug-related offence should not be allowed to have control of a dog. That is clearly a matter for the Home Office, and I will try to ensure that it is aware of the suggestion and gives it the consideration that it merits.
The Department for Environment, Food and Rural Affairs and the whole Government take the matter very seriously. We are aware of the concerns and I am grateful to my hon. Friend for drawing them to the attention of the House. I promise her that we will not let the matter slip.
Question put and agreed to.
Westminster Hall
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
North-West Economy
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Hazel Blears (Salford and Eccles) (Lab)
I am delighted to have secured a debate on the future of the new economy in the north-west and to be joined by so many colleagues from both sides of the House. We will no doubt have a lively and interesting debate on an issue that is incredibly important for us and for our constituents, as well as for businesses, employers and employees in our areas.
We all know in our hearts that the new economy will be very different from the economy that we have seen over the past 20 or 30 years; it will certainly not be built simply on financial services or run in the south-east, with the engine of growth located in one particular part of the country. If it is to be successful, it will have to be driven by the regions, which have tremendous skill, expertise, depth of knowledge and creativity, as well as the ability to expand into new areas in which this country will have to be competitive if we are to continue to ensure that our people have the opportunities and skills that they desperately need. Nowhere is that truer than in the north-west, where we already have a fantastic base on which to build.
I want to concentrate on a number of issues, including digital media and the creative industries, about which my region has a great story to tell and which have a great future; the importance of green jobs, in particular some of the advanced manufacturing jobs; the emerging areas in the biosciences and the importance of research and development in building on innovation in our universities; and, finally, the construction industry, which is not always seen as a new industry, but is increasingly adapting to new innovations and construction techniques, which will give the north-west a significant competitive edge.
The creative industries are inevitably closest to my heart because of the establishment in Salford of MediaCityUK, which has emerged like a phoenix from the ground over the past couple of years. Anybody who visits Salford Quays cannot fail to be impressed by not only the buildings but the whole sense that a new city—a new metropolis—is being created in what was the Salford docks. It is difficult to believe that we now employ more people on Salford Quays than we did at the height of the docks’ success in the 1940s and 1950s. This is a tremendous success story, and when the current phase of development is completed, we should have 15,500 new jobs and £500 million of investment. That includes £450 million of private sector investment, which will have been levered as a result of the excellent work done by all the agencies involved. The current private-to-public investment ratio is about 4.5:1 so this is a big success story, and it is down to the work of the urban regeneration company, the city council and—I will say something about this later—the Northwest Regional Development Agency, whose work in recent years all of us have great cause to be thankful for.
In Manchester, we also have the Sharp project, which works with cutting-edge digital and creative media and provides jobs particularly for young people in the emerging industries around video games. I was disappointed that the Government decided in the Budget to take away the allowances and incentives for the video games industry. Just a few months ago, Salford received £1 million to pump-prime development of some of the tremendous emerging technology involved in video games, and it is a retrograde step to take that allowance away.
Digital and creative media currently account for 7.3% of GDP in the north-west. I absolutely believe that they are a growing sector and one in which we need to continue to invest. I make no apology for saying that I will bang on about MediaCityUK to every Minister I can because, in this instance, I do not really care where the investment comes from, as long as it keeps coming into Salford and helps my community.
The second area we need to concentrate on is advanced manufacturing, and I have no doubt that many of my colleagues will talk more about it. We are incredibly proud of the aerospace industry in the north-west, and we jeopardise at our peril the extensive high-level skills that have been developed in the industry over many years. The industry accounts for 12.9% of our GDP, giving the lie to the claim that manufacturing no longer really exists in this country.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I am grateful to my right hon. Friend for securing the debate and I am glad that she specifically mentioned manufacturing, which is still of huge importance to constituencies such as mine. Does she agree that one of the biggest concerns among manufacturers—certainly those I speak to—is what they perceive to be the Government’s lack of understanding about the relationship between the public and private sectors? Manufacturers in my constituency have clients across the world, but a key part of their business is supplying the public sector. The Government are ruthlessly cutting public sector procurement in the Budget, and manufacturers will be unable to drive the country out of recession and back into growth if they do not have the necessary support and stimulus from the Government.
Hazel Blears
My hon. Friend makes an extremely important point. The Government’s choice to take an extra £40 billion out of the economy—over and above what the Labour Government would have taken out to reduce the deficit—runs the severe danger of tipping us back into recession. All the independent forecasters say that the north-west is recovering, but that that recovery is tentative, and they do not expect to see full growth until 2013.
Advanced manufacturing jobs are also essential to the green agenda, but I am increasingly worried that, although we talk the talk about new green jobs to draw in investment, some of the action that is taken is almost in opposition to the need to invest in green jobs. At the end of last week, a report published by Innovas and commissioned by the Manchester Commission for the New Economy looked specifically at growth in green sectors. It said:
“Greater Manchester is a leader in the UK in carbon capture and storage technology, additional energy sources such as biofuels and contaminated land remediation. It is also strong in alternative fuels…and above average in wind energy, low carbon building technologies and energy management…Greater Manchester has the potential to be a world leader in low carbon building technologies”.
However, we have heard only this week of massive cuts in the funding to the green investment bank and in the proposed seedcorn funding to make sure that new jobs can be developed, particularly in manufacturing.
The final area that I want to mention is the biosciences. They are not new to Greater Manchester, but the rate of growth in the numbers of people working in research and development and in exploiting some of the technology that is increasingly coming from our universities is very encouraging, and I have no doubt that colleagues with more experience than me will make a contribution on the issue.
To attract all that investment and to keep doing so well, the north-west must have the right climate, and I emphasise to the Minister and other colleagues the importance of the city region. A consultation has been going on for the past couple of months—indeed, I think that it closed on Friday—about whether to confirm the statutory nature of the country’s first city region, which comprises the 10 local authorities in Greater Manchester. That is not just about moving governance around or about process; at its best, it should be about the devolution of planning skills, housing and transport from Whitehall to the city regions so that they can provide the right climate to draw in investment. There is no point addressing the skills gap if we do not have a decent housing offer, and there is no point trying to draw in investment if the planning system cannot get that investment on the ground and working as quickly as possible.
Despite their different political persuasions, the authorities in Greater Manchester have sat down and been very mature about agreeing—the Government will perhaps not like this phrase—to pool their sovereignty and work for the interests of the people of Greater Manchester, which is vital. On transport, for example, the chamber of commerce says that connectivity with the northern rail hub, the super-port at Liverpool and Manchester airport, which my colleagues will no doubt talk about, is key to our future prosperity.
Derek Twigg (Halton) (Lab)
I congratulate my right hon. Friend on securing this important debate. She will be aware of the importance of the proposed new Mersey Gateway, which the Labour Government committed themselves to before the election, but which the current Conservative Government have postponed, pending a review. How crucial is that to the north-west region, both as an important link for Cheshire and Merseyside, and more widely? That needs to be considered along with the rail links that my right hon. Friend mentioned. All the innovations and new industries will come about only if the infrastructure is established.
Hazel Blears
My hon. Friend is right and has championed those ideas for a long time. The proposals are important because, without the infrastructure it will not be possible to draw in the investment that will provide jobs and prosperity, enabling Merseyside, Greater Manchester, Cheshire and the northern part of the region to prosper, and giving them proper connections. That is fundamental to what we are trying to achieve. If we can get support for the city region, it could be a model for other city regions in the future. I urge the Government to proceed with that.
Even when there is devolution of housing, transport and planning, the issue of skills continues to be a challenge, as it has been for many years. There is a big skills gap between young people’s qualifications and abilities and some of the new jobs on offer. Unless we close the gap there will continue to be generations of people without work. The north-west has the highest percentage of neighbourhoods—more than 20%—in the most deprived 10% in the country. We have more out-of-work benefit claimants than any other region: nearly 700,000 people are out of work and in receipt of Department for Work and Pensions benefits. That is about one in six of England’s workless population. We have 375,000 people who have been claiming out-of-work benefits for two years or more, with 308,000 of them claiming for incapacity. In addition, 9.3% of our working age population is in receipt of incapacity-related benefit. That is not just a waste for the economy but a waste of lives—of opportunities and life chances for many people.
One thing that we should do to ensure that the economy prospers is tackle the deep generational structural worklessness in some communities. I commend the pilots that are happening in Greater Manchester on connecting people to opportunity. They are a new way of doing business and have been designed and championed by Chris Marsh, who works for the urban regeneration company in Salford. He has been commissioned on behalf of all 10 authorities to consider how to drill down into the families where there is generational worklessness. The early results are extremely encouraging. He has adopted a system called Total Place in which all the agencies—health, police, regeneration, education and employment services—are brought together. Budgets are pooled, the same targets are agreed and there is the same evaluation. That means more efficiency; things are not done 10 times. Everyone is targeting the families with the most problems. It makes absolute common sense. The total public sector budget in Greater Manchester, across all the agencies, is £22 billion. No one can tell me that we cannot get some efficiencies and savings, but also better results, by bringing together such public sector resources under the Total Place scheme. The pilots, which are getting people back to work because every agency is involved in targeting the relevant families, are a huge success.
I want to ask some pointed questions about how we are to work in the future. The Northwest Regional Development Agency has been a success story by anyone’s measure. It is probably second to none in the way it has levered investment into the region. There has been great confusion about where the new Government want to go in relation to RDAs. The Business Secretary appeared to change his mind three times in the space of just one speech. I think that we now know that the Government intend to abolish RDAs, and many of us are very concerned about that, but we are not sure what is likely to take their place. Local authorities have been asked to consider setting up local employment partnerships with business. We are not sure at what level that will be, or how many clusters of local authorities will be involved. Will they follow the economic footprint, which is a matter of practical common sense, or will they be artificial structures that will not, in my view, work?
Alison McGovern (Wirral South) (Lab)
I wonder whether my right hon. Friend agrees with me that one of the most worrying things about the present situation in relation to the Northwest Regional Development Agency is the effect on the many relationships that have been built up around it. I have been going around my constituency talking to representatives of big business and smaller business—I was at Unilever yesterday. Local economic partnerships may be two years down the line, and that leaves a hiatus. Those relationships and the work that was being done are falling by the wayside.
Hazel Blears
My hon. Friend is right. In her relatively short time in the House she has made a tremendous contribution to highlighting those issues. She understands that in many cases business works on the basis of relationships, and that some long-established relationships are in danger of fracturing and disappearing in the interim. We need to get on with whatever is going to be done, and make sure that it is properly established.
It is important, too, as we proceed with the local economic partnerships, that when investment is drawn in local people should have the opportunity to get the jobs that are on offer. I urge the Minister to talk to his colleagues in the Department for Education. For those of us who were lucky enough to get Building Schools for the Future programmes in our constituencies—many of us did not, and are rightly angry about it—I want the contracts for those major public building projects to include apprenticeships and construction job opportunities for local people. My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) is right to say that 40 per cent. of the construction sector’s business depends on public sector projects. Many BSF programmes would have employed bricklayers, joiners and plasterers and those jobs are now lost to our economy.
Yasmin Qureshi (Bolton South East) (Lab)
I congratulate my right hon. Friend on the fact that her constituency has BSF programme funding. My constituency, of course, has missed the opportunity. We are talking about job creation. Does my right hon. Friend agree that it would have been an excellent opportunity for apprenticeships? In my constituency 25,000 weeks of apprenticeship would have been created, and many jobs, on which we are now missing out.
Hazel Blears
My hon. Friend is right. The decision has completely wasted an opportunity to create for her constituency’s young people access to high-quality training, proper qualifications, and work experience on the job in a building environment. This country needs those skills, so the decision is particularly short-sighted.
Bill Esterson (Sefton Central) (Lab)
I congratulate my right hon. Friend on securing this important debate. Two schools in my constituency were in line for BSF wave 1, starting this year. Sefton council spent more than £1 million in preparation for BSF, and that will now be wasted.
I am also concerned about the review of other major projects in the north-west, besides BSF, such as transport and infrastructure projects—and the effect on the construction industry and the trades that depend on it for work. At a time of fragile recovery, as my right hon. Friend mentioned, that is very important. I would encourage the Government, and hope that she would too, to make the relevant decisions quickly so that further damage is not done to firms that have no other work and will end up unable to take up the slack if projects are approved.
Hazel Blears
My hon. Friend makes an important point about certainty. Hon. Members will all know that uncertainty is often more damaging to businesses than knowing what is to happen, which at least means they can plan. I disagree with the Government’s decision to take an extra £40 billion out of the economy at such a time. That decision was a matter of choice. The implications that my hon. Friend has outlined are very important.
Graham Evans (Weaver Vale) (Con)
May we have a bit of balance in this? Labour Members are talking of their areas, and I wish to talk about my constituency of Weaver Vale, which is a Cheshire constituency. The previous Government cancelled Mid Cheshire college’s new campus, an investment of £30 million. The college invested a considerable amount of money in the project, including £2 million in architects’ and consultants’ fees, and all the other stuff that has to go with such jobs, but the right hon. Lady’s Government cancelled it 18 months ago.
My children go to a state comprehensive school, but it has 30-year-old portakabins where the windows do not shut and the doors do not close. That, however, is in Cheshire, not Greater Manchester, Merseyside or the other conurbations that have been invested in over the past 13 years. Some areas of the north-west are regarded as prosperous and leafy, but they received no money from the Labour Government during the past 13 years.
Hazel Blears
The hon. Gentleman needs to have a word with his predecessor, who was a tremendous champion for his area.
Hazel Blears
I think, Mr Chope, that we conduct ourselves slightly differently in Westminster Hall. The hon. Gentleman needs to speak to his predecessor. It is clearly important that all children and young people have the opportunity to learn in a good environment with state-of-the art information technology, and many of my colleagues here today were looking forward to their children having that possibility. The Tory Government have denied that opportunity to many thousands of children across the region.
I have some specific questions for the Minister and then I shall sit down as I know that many other Members wish to speak and I do not want to dominate the debate. The first is about the local economic partnerships. What are they, and what is their legal status? If they are to channel investment, particularly European funds and the new regional growth fund, they will need some status rather than being a loose amalgam of people who come together on an occasional basis.
Will the partnerships be funded? I understand that £300 million has already been cut from RDAs nationally this year. The original RDA budgets were £2.2 billion a year over the next two years, a total of £4.4 billion. The regional growth fund announced by the coalition Government is only £1 billion over two years. That is a massive cut in the funding available to support inward investment. This year, the Northwest Regional Development Agency has suffered a cut of £52 million, which leaves it a budget this year of £235 million, a cut of almost 20%.
At what level will the local economic partnerships operate? It may be at a city region level, or an economic travel-to-work area. However, as my hon. Friend the Member for Wirral South (Alison McGovern) said, many of the relationships are at a north-west level. What will be the mechanism for ensuring that, without the RDA, we have something that has a north-west oversight of the economy?
How can we deal with issues that cross local boundaries? In business, many do, including supply chains for manufacturing, which affect businesses across the region. Who will be responsible for innovation, business support, inward investment and access to finance such as venture capital funds? I doubt whether the local economic partnerships will be responsible for that. Will it be national organisations or perhaps the Department for Business, Innovation and Skills? How can we ensure that the key job of supporting innovation and the new jobs in the economy is carried out? At the moment, business, universities and even politicians operate at the north-west level, and we need information about how things are to go forward.
The north-west economy has been doing well, despite the difficulties and the worldwide global recession of the past couple of years. We have been narrowing the employment gap with the rest of the country faster than anywhere else. Business survival rates are better than those for the greater south-east and better than for London. Export growth is 12.2%, which is higher than the average for England.
The north-west economy is a success story. However, the independent forecasting panel has said that the recovery is fragile and that, although we have tentatively emerged from the recession, recovery will remain weak until 2013. At this moment, it is essential that our region receives the support that it deserves. There is a huge amount at stake for our constituencies and our communities.
We are pretty confident in the north-west that we can continue to thrive, but we need a Government committed to supporting that investment and growth. I do not believe that we have that kind of Government. I genuinely believe that the big decisions made in the last couple of months will put us back rather than take us forward. The public-sector cuts coming in the autumn, with a predicted 600,000 job losses, will have a devastating effect not only on our communities and our families but on our economy.
I believe that the cuts that we face are too deep and too fast, and that they will do a great deal of long-term damage. I hope that we in the north-west are strong enough to weather the storm, that we do not suffer the problems that concern me, and that we do not live to regret those decisions made now that will affect us in the long term.
David Mowat (Warrington South) (Con)
I congratulate the right hon. Member for Salford and Eccles (Hazel Blears) on securing this important debate and on her speech, the first half of which I pretty much agreed with.
It is important to put the size of the north-west economy into context. I shall talk about the regional development agency, but even in its heyday—before the cuts imposed about a year ago by Lord Mandelson, which were greater than this year’s cuts—regional aid for the north-west amounted to 0.2% of our economy, which is worth about £120 billion. We have 7 million people in the north-west, which is a bigger population than most EU countries have, and it is extremely important to understand that Government aid is not what will build the world-class businesses that we need.
I believe that the RDAs did much that was good, but it is important that all Members here today remember what the Office for Budget Responsibility forecast for our economy in the lifetime of this Parliament. In broad terms, it said the north-west should aim to create 200,000 private sector jobs at the same time as cuts take place and we will lose something like 70,000 public sector jobs. That means that each Member in this Chamber will need 3,000 new private sector jobs in his or her constituency. We should all be thinking about how that can happen.
If we want to fight homelessness, deprivation and unemployment, the creation of those jobs is vital. They will be created only if we become—or continue to be, as in some industries—a world-class economy. There are areas where the north-west is world class—they include defence, advanced manufacturing and nuclear—but we have to build on those. Principally, it is not about Building Schools for the Future. I have lost BSF schools in my constituency; that was a great disappointment to me and it will hurt the construction industry. In the end, however, the generation of a world-class economy in the north-west will depend on innovation and how we proceed.
The principal question for me is whether the supply side of our economy, particularly in the north-west, will enable those 3,000 jobs to be created in each of our constituencies. The supply side is vital, and three factors are important. The first is infrastructure, and I agree with what was said about the Mersey Gateway, which is important to the north-west. The next factor is regulation, and the coalition Government have made a strong start by getting rid of some of the regulations stopping our world-class businesses from developing.
The third factor is skills development. I have a real concern that our country is not positioned where it needs to be. It is not a particularly political point, but over the past 25 years our universities have failed to generate the applied scientists and engineers who will be needed to develop the businesses the right hon. Lady spoke about. Twenty-five years ago, when 8% of people went to university, we produced 20,000 engineers a year. We still produce 20,000 engineers a year, but out of five times as many graduates. To put that into context, France produces 50% more engineers than we do—I shall not even bother giving statistics for countries such as India or China.
That our higher education establishments have failed to produce the skills in applied science and engineering that will be needed to create a world-class economy in the north-west is close to being a scandal. A number of people should hang their heads in shame, because they have perpetuated something of a con. Many talented young people are leaving university unable to play a part in the industries of the future. In the nuclear industry, for example, the companies that will build our nuclear stations will be German and French. A recent Cogent Systems report said that we have a lack of key workers in chemical, geotechnical, mechanical and production engineering. Most ridiculous of all, National Grid is hiring engineers in—wait for it—Zimbabwe, to make the changes to our transmission and power engineering systems across the grid. Shell hires engineers in Russia. Those are opportunities that young people in our constituencies should be taking up, but they are not able to do so. If we are serious about rebalancing our economy away from the City, the financial services and oil and gas—frankly, we have had a free pass on oil and gas for a couple of decades—we cannot continue to fail in skills development. I shall be interested to hear the Minister’s response on that point.
Let me turn now to my concerns about the RDA. I know that the White Paper is still to come, but the proposals are centralising. I agree with the right hon. Lady’s comment that the regional fund represents a major reduction in budget from what the RDAs had in the past. The fact that it will be administered directly from London is a centralising measure. Notwithstanding how the local enterprise partnerships develop, ours could be the only major economy in the OECD that has no sub-regional intervention. I hope that that will not be the case, and that the Minister can give me some reassurance about that. It is hard to believe that the French, Germans, Americans and Canadians have got it wrong. It is not fair to have a Northern Ireland Office, a Scotland Office, a Wales Office and a Government office for London with economic intervention powers while the English regions are left outside.
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
I would not normally intervene because I know that Back Benchers want to have their say, but I must clarify that point. The regional growth fund is an entirely distinct element from how we develop local enterprise partnerships. The funding for one is not the funding for all. I will explain later how we intend to develop those partnerships.
David Mowat
The second point on which I seek clarification is how the partnerships are to be funded. Business people believe that they will be funded by the councils that make up the partnerships.
Another concern—a slightly more subtle one—is that our industrial regional policy is biased towards small and medium-sized enterprises rather than structural winners, such as nuclear power, defence and advanced manufacturing. If the regional fund is administered rather like the “Dragon’s Den” TV programme is run, it is hard to see how that can result in the emergence of organisations such as Daresbury and the Atlantic gateway infrastructure programme. It seems to me that there is a risk that the types of project that go forward will be related to SMEs. We need SMEs because they drive the economy, but they also feed off structural winners and world-class businesses, such as BAE Systems and AstraZeneca, and if those businesses are not growing and generating jobs, it will be tough. It also seems to me that there is a risk of the national insurance contributions holiday, which is a great policy, also being biased towards smaller companies, as is the procurement policy.
I have three questions for the Minister. First, can we do more on skills? There is a critical weakness that could result in the 200,000 private sector jobs in the north-west that the OBR forecast will be needed not being achieved, which would be a tragedy. Secondly, are the RDA proposals centralising and do they risk the English regions being left outside any formal structures? Thirdly, is there not a danger that our policy is orientated more towards SMEs than towards picking structural winners?
Mr Christopher Chope (in the Chair)
Before calling the next speaker, let me say that I intend to call the Opposition spokesman and the Minister at 10.40. I hope that Members will time their remarks so that everyone can get in.
Graham Stringer (Blackley and Broughton) (Lab)
There is a real regional imbalance in this country. Whatever criteria or measures we use, almost every region in the country outside London and the south-east has inferior wealth and health, which is a national disgrace and a waste of resources. We have an extremely congested south-east, with space elsewhere in both the economy and the transport system. I congratulate my right hon. Friend the Member for Salford and Eccles (Hazel Blears) on bringing this important subject to the Chamber this morning. I agree with her on almost everything, apart from what she said about the regional development agency, which I will come back to.
I also enjoyed the speech of the hon. Member for Warrington South (David Mowat). He made some extremely good points, but I have some questions for him to reflect on. They are rhetorical questions rather than arguments and relate to the fact that the relationship between capital, training and the economy is rather more complicated than just training a lot more engineers and scientists—although I agree we need to do more of that. After the second world war, where were most of the world’s scientists and engineers based? In the Soviet Union, which was an economic basket case. Where were there almost no trained scientists and engineers? In Japan, which saw huge growth. I make that point simply to stress that the issue is complicated.
Most Opposition Members have been asking what we will do without the regional development agency, but I think we will do rather better than we have been doing. The important thing is to ensure that money gets to where it is necessary to support business, but the regional development agencies have been a burden and a barrier to getting money into the right places. From their very inception, they have made life more difficult in the north-west. Let me explain why. It was my Government who created them, so this is not a party political point. When they were set up, money was transferred from the rest of the country into London and the south-east, where there had not previously been a development agency. That was a mistake. This is slightly unfair, but if we add up the administrative costs of all the RDAs over their lifetime, we find that they come to more than £6 billion, which is more than the Conservative Government’s first round of cuts. Is that money well spent? I do not think so.
Let us look at the number of jobs created. At the end of March, just before the general election, a National Audit Office report on all the RDAs was published which stated that the RDAs had claimed that, over a five-year period, they had created 413,000 jobs. However, an independent audit of that claim said that the figure was actually 375,000 jobs, and if the jobs that would have been created anyway without the intervention of the RDAs were taken out, it was only 178,000 jobs. The NAO recommended changing the system. I wrote to the chairman of Northwest RDA, Robert Hough, after the NAO report was published asking if he would change the statistics, so that they told us what was really happening. He replied:
“It would be inappropriate to adjust any of the information previously published.”
I thought that that was a bizarre reply, even though Robert Hough is a good man, whom I have worked with on many occasions. The cost of those jobs is £60,000 per job, according to the NAO. Those are terrible figures. I say to my hon. Friends: think about it. What matters is that we get money into the right places, not that we have a body that, when it was formed, centralised the grant-giving process away from local authorities.
The NAO report says that the measure of the RDAs’ activities is whether there is gross value added because of their work. However, what the report says about GVA is its most devastating aspect. The conclusion in paragraph 16 is worth reading out:
“We are unable to conclude that the regional wealth benefits actually generated were as much as they could and should have been, and are therefore value for money. Weaknesses which, in many cases, undermined the RDAs’ ability to make decisions and set priorities to maximise regional economic wealth do not support such a positive conclusion. These weaknesses included poor project economic analysis and appraisal, pervasive optimism bias, and weak evaluation. In particular, most RDAs were unaware, until 2009, of the types of projects which yielded the best and most enduring benefits.”
That is a devastating analysis. We in the north-west have experienced those perverse policies, which have not put money into the sectors that are the major players in the region—the sectors that would generate the most jobs and support the economy most effectively. I look forward to analysing this issue and I will be as critical as I can be if money is not put in, but I will not defend the indefensible in the structure of the RDAs.
I accept that a lot of wealth—indeed, the vast majority—will be created by having a more fertile and active private sector. On the other hand, when we look at some of the causes of the current regional imbalances, I do not think that we can get away from looking at the Government’s structural and spatial expenditure. Looking at transport in particular—I have spent a long time on the Transport Committee—we see some of the reasons why wealth in the north-west and the other English regions is not as great as it should be. Of all the spending blocks, the money spent on transport in the south-east of England has increased per head of population relative to every other region in the country. One can go over spending under the Labour Government, but that was happening before—this is not a party political point. More money is spent on education and health in London than in other English regions, but the gap in expenditure between London and the other English regions has not been increasing as it has been in the transport sector.
When we look at the detailed projects, we can see why that has happened. The public-private partnership for the tube in London was very expensive. Crossrail, too, is hugely expensive and is certainly of no benefit to the north-west. The costs of those projects add up to in excess of £30 billion-worth of expenditure, yet we are not getting investment in the rail system of the north of England, which has railway schedules that would have embarrassed Gladstone, because trains now travel more slowly between stations in the north of England than they did in the 1880s. That is a measure of the imbalance between the south-east and the other English regions. I know that we will have cuts, but only when we examine the major spending blocks and change them will we make a fundamental difference.
The Treasury, which inspired the Barker and Eddington reports, has come to almost exactly the wrong conclusions in those reports. The Barker report says, “Well, there’s a lot of people in the south-east of England, so we’ll build a lot more homes there and spend £20 billion on infrastructure,” when we need that expenditure in the north-west of England. The Eddington report said, “Well, we’ve got a transport structure and, effectively, we will invest where the transport system is now.” Those are the most reactionary conclusions that one could come to. If this Government or any other want to do something about the original regional imbalances that I talked about, they must adopt positive investment policies that do not carry on subsidising congestion—as the policies advocated in the Barker and Eddington reports do—but instead help the economies of the regions, spread out the jobs and wealth, and improve people’s health by doing so. I therefore hope that the Minister will reject a lot of the conclusions in Barker and Eddington.
I will finish with two very small points. First, there are other major projects that have gone to the south-east of England. One of them is the Olympics. I have always thought that the only part of the United Kingdom that should not have the Olympics is London, because one of the benefits of having the Olympics is that the city that holds the games effectively receives an incredible amount of advertising—it can show what it can do as a city. If anything, London is the capital of the world already; it is a great world city. It did not need the Olympics.
There is a little known and little publicised report by a professor in Nottingham, Professor Blake, which explained that the Olympic games in London would cost the regions between £4 billion and £5 billion in economic costs, because money would be dragged into the south-east. Certainly some things will be bought from the regions, such as steel from steelworks in Bolton, which will help, but essentially the net flow will be a cost to the regions of about £4 billion. Furthermore, Professor Blake wrote his report during a time of economic boom. The Minister may not have heard of that report, but I would be grateful if he wrote to me about the update on it.
My final point is in response to my right hon. Friend’s comment about city regions. I have long been a strong supporter of city regions. I think that today’s boundaries are, in many cases, left over not from 1972 or 1971 but from mediaeval England. The boundaries of many of our areas need changing. Working together to relate to the real political economy is what having a city region is all about. I just hope that we do not leave the electorate out of the system. It should not be merely a bureaucratic relationship between local authorities. People must still have the right to vote for the people who can influence their transport network.
Once again, I offer my congratulations to my right hon. Friend on securing this important debate.
Esther McVey (Wirral West) (Con)
I am delighted to be able to speak in this debate, which has been very constructive so far as people come to it with various ideas and views. It is true that we are all passionate about the north-west, and I know that the Government are too; it is a dynamic and thriving part of the country. It is also a powerhouse not just locally but for the whole country, and it is now viewed as one of the most vibrant parts of Europe.
The right hon. Member for Salford and Eccles (Hazel Blears) talked about manufacturing. The north-west is the UK’s second biggest vehicle manufacturing area, it accounts for nearly a quarter of British chemical output, and it is key to the aerospace industry. We have also talked about the creative industries. The media industry in the north-west is growing at twice the speed of that in any other region of Europe, with 31,000 businesses linked to the creative sector. In Liverpool, we have Sony Computer Entertainment Europe and Granada, one of the leading commercial television production and distribution companies. We also now have the introduction of MediaCityUK in Salford. The nuclear industry is worth £3 billion annually, and pharmaceuticals and biomanufacturing are pivotal industries employing 200,000 people. The region is also Britain’s biggest financial and professional services centre outside London.
Our area is dynamic and diverse. There is a lot that we can do, but I am concerned about the glue that will keep it all together. The region is diverse not just in what it does but in terrain and geography. How will we keep it together, looking forward to local economic partnerships? What will happen to the regional development agency? Do we need a strategic overview partner, of any size, to ensure that momentum is maintained? We know that the region is doing well, but on the other hand, life expectancy there is lower than in the UK as a whole, weekly earnings are below average and the number of jobseeker’s allowance claimants is above average. We have some of the worst unemployment statistics in the country, and more disadvantaged areas than any other region. We have done a lot, but we must continue to do a lot to address the incongruities from which the region suffers. The north-west is strong and united, but we must prioritise it to keep it going forward. My hon. Friend the Member for Warrington South (David Mowat) spoke eloquently about the need for education and skills, and plans for next-generation access.
The north-west is a main contributor to the economy in the field of transport manufacture, highlighting the need for continuing success in the sector. The region also had the lowest average daily motor vehicle use on the roads in 2008. We must keep it that way by increasing access to public transport. We need better rail links, and not only to the south-east and London. I am particularly keen on the development of the trans-Pennine rail link and links across the north-west, which are vital to our growth and could use and capitalise on features such as our super-ports. Infrastructure in our area is key.
More investment is also needed in high-speed broadband and next-generation access, especially in rural areas. In Wirral West, almost 55% of households are considered deprived in terms of access to broadband. That applies to many other areas in the north-west as well. Our Government have pledged to do more to link us all up and get faster broadband access. In Liverpool, a smart grid project is being considered that will bring together the private sector to connect socio-economically deprived areas, assess their energy use and make savings.
The north-west has the potential to be the European leader in renewable energy and the low-carbon industry. We have more sites devoted to creating energy from renewable sources than anywhere else in the UK, which gives us the capacity to generate the second largest amount of energy. We must see whether we can be first.
We have great potential to develop wind and nuclear power as well as continuing to focus on wave power. In Liverpool bay, various private industries are combining to consider next-generation wind turbines. We as a Government also need to consider where we can facilitate private industry and enterprise to gain a terrific return that would regenerate areas, provide work and draw money into the UK economy as a whole. Importantly, over the past few years the north-west has been the most successful UK region outside the south-east in attracting foreign direct investment projects. We have attracted some 511 projects between 2007 and 2010, and the equivalent of 7,000 new jobs have been created in the past year alone through 179 FDI projects.
Greater enterprise brings better job prospects and more employment to the north-west. That is particularly important for the young, as we have the most unemployment and the greatest number of young people not in education, training or work. It is key for young people to know that they have a future and that investment is coming into their area. There is a great drain of youth to the south and south-east, and I for one would like to keep some of those young people in the north-west.
The north-west is responsible for 20% of UK manufacture of chemicals, chemical products and man-made fibres. The sector is growing significantly, and we must ensure that it continues to do so. We need an investment strategy for the area. We cannot work in isolation; we must look outward, not inward. Although we know that we will be moving forward with city regions and local economic partnerships, how will those bodies work together for the greater good of the north-west? We are considering significant investment infrastructure that will cross sub-regional boundaries. How can we work as a whole to raise the region from its current plateau? We are vibrant and doing well, but how can we continue to do well, so that we can be a significant engine of employment and growth for the whole UK?
Andrew Miller (Ellesmere Port and Neston) (Lab)
It is important to follow on from the comments of the hon. Member for Wirral West (Esther McVey). The enthusiasm with which she has spoken, endorsing the enthusiasm of my right hon. Friend the Member for Salford and Eccles (Hazel Blears), typifies the region. It is successful. We are not on a downward slide to nowhere; we are moving in the right direction. Ensuring that we continue in the right direction is key to what happens next. I do not want to be drawn into the rights, wrongs and merits of the case for the regional development agency; I want to ensure that whatever we do continues the momentum in the right direction.
One vehicle, for example, has been incredibly successful. The hon. Member for Warrington South (David Mowat) appropriately mentioned Daresbury. He will know what an interesting battle Labour Members had inside our own fraternity, with the last Prime Minister but one, about investment in Daresbury. The science community chose to invest Project Diamond elsewhere. One result of that debate was the sensible decision to create the Northwest Science Council, which has acted as a sounding board for some of the best ideas evolving. Some of the issues mentioned by colleagues from various parties owe their genesis to the work done by the science council and its prodding and poking.
Whatever happens within the RDA structure, I would like an equivalent body to bring together high-level scientists from the important clusters represented in the region, in order to ensure that we maintain the momentum necessary to be world class in the fields in which we have high-level skills. I pose that challenge to the Minister. I am not hung up one way or the other on any particular structure, but we must recognise that bringing together the science community has been beneficial. The hon. Member for Warrington South will know that the Daresbury site does not do obscure, blue-sky research—I say this as somebody who used to run an X-ray laboratory a long time ago, when I did a proper job—but is a dynamic and growing science base that reaches into new areas that were never thought of when it was a single-purpose laboratory. The consequence of our battle some years ago has been incredibly positive, and we need to keep that momentum going.
We have also had some interesting successes in other areas. A few years ago, it was presumed that the vehicle industry would continue to shrink; in fact, the opposite has happened. There has been growth in output in the region in not just finished products, but components—from very high end, such as Bentley in the south of the region, through the spectrum of vehicles. The success of General Motors has, of course, been important to my constituents. General Motors was presumed to be sliding into oblivion a while back, and we are now pleased that it does not need the loan guarantee that Lord Mandelson offered it just before the election. The argument between me and the Government has therefore become academic. That is very positive news.
It is now key to consider whether we can get the Ampera into Ellesmere Port—some colleagues saw that vehicle in New Palace Yard a while back—because it is a really exciting, next-generation vehicle that is the right platform to move us forward. The Ampera produces only 40 grams of carbon per kilometre, and is the right step forward. I hope that no one in this Chamber would argue against having the Ampera in Ellesmere Port, so what I want is a commitment from the Government. I am not asking for their money; I am asking for their commitment to working their socks off with us to ensure that no stone is left unturned in guaranteeing that we get that project in Ellesmere Port.
Mr Prisk
That is a very specific question, to which my answer is yes, absolutely. I have met the senior management in the UK and internationally. Ellesmere Port has an outstanding opportunity in this regard, and my ministerial colleagues and I are determined to do everything we possibly can. I am grateful to the hon. Gentleman for his determined advocacy for an extremely important part of this country’s industrial base.
Andrew Miller
I am grateful for the Minister’s comments. I will open the negotiations on getting good value for money for Government car fleets. The Ampera is a very comfortable car to drive, as one or two hon. Members here have discovered.
Other sectors within our region do not get talked about. We have the premier veterinary school at Liverpool university, part of which is at Leahurst in my constituency. There is a fantastic partnership between the university sector and the private sector, from which there has been a huge amount of investment. We must not forget the importance of that veterinary school in the context of zoonosis and other areas of science that will be increasingly important. That crossover between the public and private sectors is critical to the future of our university structures. We need to consider how we can evolve public sector jobs at the heart of such areas of research, and create the kind of successful spin-outs we have seen in research parks in other university communities across the country and elsewhere. How can we create the equivalent of St John’s, Cambridge in and around our north-west university clusters?
Some of our universities are doing particularly well. I began my speech with the subject of the Science Council, which has led to greater collaboration between north-west universities. That has been encouraged by colleagues from all parts of the House. For example, in the other place, Lord Oulton Wade, among others, and I have tried to pull together the universities and get the vice-chancellors to think collectively as a region. That has had an effect, so let us not kill the golden goose.
I shall make one final point, which is not intended to be negative. Will the Minister inform his colleagues in the relevant Departments that practices are going on within the public sector that leave a lot to be desired? Within NHS Wirral, there is a disguised attempt to get rid of numbers, or reduce head-count. That organisation is saying to people, “We don’t make redundancies.” However, they are doing so. A constituent of mine from Neston was told unequivocally that the service she provides is no longer required. She has 36 years’ experience as a nurse—not all in the same employment, but she does have a lot of experience—and we need to maintain such skills. However, instead of offering her a suitable alternative job elsewhere within the NHS that is within a reasonable travel-to-work area, the employer has come up with a clerical job that involves working permanent nights. Given her length of service, my constituent is obviously reasonably mature and, of course, all the case law indicates that that is not a reasonable job offer.
Such disguised attempts to reduce head-count cannot be tolerated, and I hope the Minister will pass that message on. I said in writing to the chief executive of NHS Wirral that I would raise that matter, because it is an outrage that people with such experience should be treated in such a manner. That is my only negative comment. We have to face the reality of pressures on public sector jobs, but any action that is taken must be taken in a humane and civilised manner, and in conformity with the law of the land.
Stephen Mosley (City of Chester) (Con)
As we have heard from all those who have contributed today, we have much to be proud of in the north-west. We are already Europe’s 12th largest regional economy and we have a larger economy than many European Union countries. We are home to more than 250,000 businesses and we consistently outperform in attracting inward investment to the UK. We are a world leader in nuclear energy, home to Europe’s largest bio-manufacturing region, the largest centre of chemicals production and the No. 1 exporter of pharmaceutical products. We have Europe’s second-largest media hub, and the UK’s largest financial and professional services centre outside London. We are also the UK’s largest aerospace and defence manufacturing region and one of the largest motor manufacturers.
However, the north-west has not been immune to the recent recession. Britain has had the longest and deepest recession on record and the longest recession in the G20, with six consecutive quarters of negative growth. We are seeing the effect of the recession across the region, and we need to ensure that we play our part in securing our nation’s future economic and financial success. Our biggest challenge is overcoming the fiscal inheritance of the new coalition Government. Failure to bring the deficit under control will only lead in one direction—higher interest rates and higher taxes. Such a situation will suffocate growth, strangle wealth creation and stifle people’s hopes of a better future.
Rosie Cooper (West Lancashire) (Lab)
I wonder whether the 1980s and early 1990s passed the hon. Gentleman by? I was not the MP for West Lancashire at that time but, in places such as Skelmersdale, the real unemployment rate was 50%. We are in a difficult worldwide recession and we have lots to do. That goes for all parties. You have your position and we have ours. I believe you are putting families and the needy—
Mr Christopher Chope (in the Chair)
Order. That was far too long an intervention. I am not involved in the debate and I am not going to become involved.
Stephen Mosley
The hon. Lady must remember that there was increased employment, growth and general prosperity by 1997, because of the action taken before then.
Taking urgent action is unavoidable and I am delighted that the Government have acted decisively to bring the deficit under control. The Government’s swift action has meant that we can be optimistic about the future of our region’s economy. There are two important drivers of economic growth in the north-west: first, the Government’s national action with respect to the country’s economy as a whole; secondly, the action we take locally as Members of Parliament to involve our local councillors and business communities in boosting our local economies.
I represent a constituency on the very edge of the north-west, and we have important economic ties to neighbouring regions, especially north Wales, so for me the idea of a unified north-western economy is rather abstract. For example, few would argue that Chester’s economic future is more closely related to the economy of Carlisle than to that of Connah’s Quay in north Wales. However, those external relationships have not been fully recognised, and the opportunities offered by our neighbours have not been fully followed up and secured.
The rigid regional attitude might even have proved to be a psychological barrier to growth in areas such as Chester on the edge of the north-west. That is why I am particularly pleased that the Government are replacing the remote Northwest Regional Development Agency with the more local, accountable and relevant local enterprise partnerships. This is not only my view, but the view taken by Cheshire West and Chester council, which, along with Cheshire East and Warrington borough council, has decided to pursue the aim of having a Cheshire and Warrington LEP. A recent statement from the Cheshire and Warrington Enterprise Commission shows that it is not only the elected politicians who support the idea of an LEP. It said:
“A new Local Enterprise Partnership (LEP) in Cheshire & Warrington could transform the local economy, bringing significant benefits for businesses and residents. We should grasp this opportunity with both hands. In the longer term this will enable us to deliver our ambitious growth targets and really put Cheshire & Warrington on the map.”
Mr Christopher Chope (in the Chair)
I must cut the hon. Gentleman off there, because otherwise we will not have time for the winding-up speeches.
Roberta Blackman-Woods (City of Durham) (Lab)
I congratulate my right hon. Friend the Member for Salford and Eccles (Hazel Blears) on securing the debate. Clearly, no matter is more important for us than how we seek to invest in our region. That is evidenced partly by the passion with which all Members who have contributed to the debate spoke about their region, and partly by the number of Members who have attended.
My right hon. Friend did an excellent job of pointing to the need to keep supporting the development of prosperity in the north-west and attracting inward investment to the area. She was absolutely right to identify key sectors where growth is possible and desirable. She mentioned, in particular, digital media and the need to invest in green jobs and to try to improve advanced manufacturing. I know from personal experience how Manchester and Salford have been transformed in recent years.
All Members are right to be concerned about how that programme of transformation will be continued without an agency such as the RDA, along with its public and private partners, acting as a real champion for the region. Several hon. Friends made interesting points on how RDAs have brought together the public and private sectors. My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) referred to how the agencies had brought about substantial job creation. Government Members, too, recognised the important role that RDAs had played.
Bill Esterson
Does my hon. Friend agree that one of the lessons that need to be learned from the Government’s handling of the abolition of the development agencies is the need to listen to business leaders and leaders in both the private and public sector about what is right for the region, rather than just coming up with their own solutions and imposing them from the centre?
Roberta Blackman-Woods
My hon. Friend makes an excellent point, and I will shortly address how the abolition of the RDAs is being handled. In response to comments made by my hon. Friend the Member for Blackley and Broughton (Graham Stringer), I do not think that we are framing the discussion around the retention of a particular structure, but we have to question whether LEPs will be capable of taking on the roles previously performed by RDAs.
It is also worth asking whether the Government have a democratic mandate for abolishing the RDAs, because the Liberal Democrats stood on a platform of keeping them in areas where they were deemed to be successful. Indeed, the coalition agreement, on page 10, states:
“We will support the creation of Local Enterprise Partnerships—joint local authority-business bodies brought forward by local authorities themselves to promote local economic development—to replace Regional Development Agencies (RDAs). These may take the form of the existing RDAs in areas where they are popular.”
However, that does not seem to be happening in practice. We have been told that all the RDAs are going, but no legislation is yet in place for that to happen and we expect a White Paper on the matter to be produced only in the autumn.
The issue is about creating a structure that will deliver regional economic investment and growth. We know that the Northwest Regional Development Agency returns about £5.20 of economic benefit for every £1 spent, and in terms of foreign direct investment the programme delivers £30 for every £1 spent. That is a substantial record that will have to be met by any new structure.
I have several questions for the Minister and would appreciate specific answers to them. How will the economy of the north-west be affected by the removal of current funding streams from the RDA, such as the European regional development fund, and the absence of an effective system for disbursing funds and managing the bidding process? That is particularly important, as we currently need investment in green businesses. The RDAs have been successful in bringing together venture capital funds through European money and money from the private sector to create substantial funds.
How will businesses supported by the RDA cope with the reduction in funding when the £1 billion regional growth fund replaces the RDA budget of £1.5 billion a year over two years? That was an excellent question asked by my right hon. Friend the Member for Salford and Eccles. There are other questions on the advisability of moving key functions from the RDA to the Department for Business, Innovation and Skills, such as responsibility for inward investment and for fostering innovation. Surely there is a need to go the other way and to devolve those functions to local areas and enable them, particularly regions, to set their own priorities.
Several Members referred to the development of a regional skills strategy. That, as the Minister will know, was a function undertaken by RDAs. Without that, how will we know what the skills shortages are at a regional level, how they are to be addressed and what partnerships will need to be developed locally to deliver them? We know that local businesses need to work with education suppliers to increase the number of apprenticeships and to get more employers on board, and we know that universities are critical to the development of regional skills. However, it is necessary to have an overview at regional level, as the hon. Member for Wirral West (Esther McVey) noted in an excellent point. How will universities interact at a regional level without a body to encourage them to do so?
Yvonne Fovargue (Makerfield) (Lab)
Does my hon. Friend agree with me that, with the Government office for the north-west also under threat, there are concerns about the partnerships not only with businesses, but with the voluntary sector, which has been so well supported by that body?
Roberta Blackman-Woods
My hon. Friend makes an important point. The key question concerns the partnerships already in place and delivering at the regional level. How is what they are doing to be continued, and developed, by the new structure? We do not know the answer to that question.
The regional bodies are also working to address the number of NEETs—those not in education, employment or training—and to encourage all local education providers to come together and continue improving aspirations. Again, it is simply not clear how LEPs will achieve that.
We suggest that now might be the wrong point at which to get rid of RDAs, when we are not clear how LEPs will take on their functions. The degree to which the Government are centralising the RDA tasks is also not clear. I am not sure that that is a sensible way forward either.
The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)
I begin by congratulating the right hon. Member for Salford and Eccles (Hazel Blears) not only on securing the debate but on setting a constructive and positive tone on what is a complex issue. I think we all share the view that the north-west is a part of the country with a tremendous future and a great industrial past; the question is, how do we enhance and develop that? The debate has been not only constructive but thoughtful, and I shall do my best in the nine minutes I have to canter through some of the questions, so bear with me.
Like much of the country, the north-west has suffered from the recession, but we are beginning to see early signs of improvement. How do we help to shape and enable a prosperous economy that will be different from what we have known in the past? One of our opening statements was that we as a Government passionately believe in the need to ensure that—
Graham Jones (Hyndburn) (Lab)
I am concerned about the context of this debate, which the hon. Member for Wirral West (Esther McVey) touched on. Our region has many disadvantaged communities—in fact, one of the highest proportions in the country. Will the Minister specifically address the disadvantaged areas? His priority tends to be the west of the region, where the nuclear and defence industries are located, rather than the deprived areas. What will he do about those?
Mr Prisk
I am only 60 seconds into my speech, so I shall do my best in the remaining eight minutes to get to the part of the region about which the hon. Gentleman is concerned.
We understand the need to rebalance the economy away from an over-reliance on financial services and one part of the United Kingdom. Therefore, instead of the approach we have seen in the last dozen years or so, we need to support the renewal of the industrial base and to encourage investment and innovation, about which several hon. Members rightly spoke. Some of those sectors have been talked about: advanced manufacturing, which the north-west is well supplied with, such as plastic electronics and robotics; the digital and creative sectors, to which the right hon. Member for Salford and Eccles referred; and, as several hon. Members mentioned, green technology, which needs to be developed.
Hazel Blears
If the green industries are so important, which I believe they are, why are the Government abandoning the green investment bank?
Mr Prisk
The right hon. Lady is wrong. We believe passionately in ensuring that we have an investment bank with financial expertise that can deal with green technologies. We will set that out in our papers on growth and finance, in which we will examine access to credit, which is crucial to small businesses that use conventional technologies, as well to those that use the new technologies. I know the right hon. Lady is keen to get answers, but if she can wait a few more days she will get the answers to her questions.
The north-west is well placed to benefit from our approach, involving long-term investment, a proper fiscal environment and, as several hon. Members have said, a reduction in the burden of regulation on small and medium-sized enterprises. The hon. Member for Ellesmere Port and Neston (Andrew Miller) was absolutely right to highlight the role of Daresbury and of excellent centres of innovation such as Ellesmere Port. I wish the media would look at industry with clearer eyes. They tend to see it as some sort of smoke-stacked centre, but it has moved on a long way, and Ellesmere Port is an excellent example of how we can progress our industrial base.
In the time I have left, I turn to the heart of our debate: the shape of our local and regional economies. As several hon. Members have pointed out, for many years there has been an evident gap between the greater south-east and the rest of the country, which has rightly generated discussion among politicians, economists and business men and women.
Mr Prisk
With respect, I will not give way because the hon. Gentleman has not spoken in the debate and I need to answer the questions asked.
In 1999 the previous Government established the RDAs, which were expressly tasked with a clear goal: to close the north-south gap. Unfortunately, the evidence shows that that has not been achieved. Let me take the north-west as a simple example: between 1990 and 1999, when the RDAs were established, annual growth in the north-west averaged 1.7%, but in the greater south-east it was 2.3%, a gap of 0.6%. Between 2000 and 2008—the latest period for which figures are available—growth averaged 1.5% in the north-west and 2.1% in the greater south-east; again, a gap of 0.6%. Despite spending £3.7 billion over the past decade, the North west RDA failed to make a difference in closing the gap between its economy and that of the greater south-east.
Understandably, hon. Members may well talk about individual projects that they feel have merit, but we have to look at the overall impact over a decade.
Simon Danczuk
On Friday I visited Kingsway business park in my Rochdale constituency. It is one of the largest business parks in the region, if not the country, and a good thing about it is that it is creating jobs—many businesses are starting to locate there. One of the attractions is that businesses receive a relocation grant of about 20% of their costs, which has attracted businesses from all over the country. However, this week we were told that that grant would no longer apply. Why is that? What effect will that have on job creation not just in Rochdale but in the north-west as a whole?
Mr Prisk
That is a long intervention, which is a shame because it has prevented me from tackling the broader question. The individual case cited by the hon. Gentleman is a classic example of the danger of the debate: we can all find an individual project that might have merit. The question is whether the gap has closed in 11 years, after spending £3.7 billion. The answer, sadly, is no, which is why we need change.
In answer to questions from those Members who spoke in the debate, I shall set out the key changes that we want to achieve. We need to forge effective partnerships between local business and civic leaders in our communities—and yes, that will mean formal, legal entities. We want greater democratic accountability in what will be vital forums in deciding local economic priorities. The partnerships must be equal between business and civic leaders, because that will help them better understand the needs of local people. In response to the question about universities, I see universities, too, as having an important role in those partnerships.
As several Members said, local economic development needs to be based on real economic areas. Sadly, the boundaries of many RDAs often relate more to the administrative priorities of Whitehall or Brussels than to the actual needs of local areas. I very much welcome what the right hon. Member for Salford and Eccles said about city regions and the various benefits and challenges. Clearly, they are not relevant in every part of England; nevertheless, they are an important dynamic to understand. We must ensure that the boundaries of the economic area that the partnership is seeking to enhance relate to the real economy of today. We need to reform the system by replacing RDAs if we are genuinely to strengthen the local economies of this and other areas.
Our objective is simple: to encourage strong local leadership and to promote economic growth, based on institutions that match the economic reality on the ground and that have the freedom, and therefore the diversity capability, to make a real impact.
I also welcome what the right hon. Member for Salford and Eccles said about the pilots. I am not familiar with the details that she gave, but I would be happy to have a look at them. Total Place has considerable merit as an approach to examining some of the underlying questions.
Mr Prisk
I will not because I have less than a minute left.
In drawing my thoughts to a brief conclusion, I apologise to hon. Members for having been unable to address all their questions. In my book, the north-west is an area with a genuine can-do spirit, as my hon. Friend the Member for Wirral West (Esther McVey) and others mentioned. We in government must therefore understand and enable that, rather than directing and tinkering. We need to ensure that businesses can prosper and grow, which means, yes, creating a new economic landscape. For a few weeks, the level of clarity and certainty might not be perfect, but we will set out our further plans over the coming weeks, and we look forward to dealing with the various requests appropriately and thoroughly.
Coastal Towns (Government Policy)
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Mark Simmonds (Boston and Skegness) (Con)
I am pleased to see you in the Chair this morning, Mr Chope. I am delighted to have secured this debate, which I hope will give the many Members with an interest in the subject an opportunity to highlight the numerous challenges that coastal towns and resorts face and the opportunities in which they want to take part.
It needs to be recognised that work on coastal towns was done during the previous Parliament, particularly by the Coastal Communities Alliance led by Lincolnshire county council, and by the Communities and Local Government Committee, which was chaired by Dr Phyllis Starkey. I am sure that the hon. Member for Blackpool South (Mr Marsden), who has just taken his place, will recall that the previous Government’s initial response to the excellent Select Committee report was hopeless and that they had to come back with another response. Also, the academic research of Professor Steven Fothergill of Sheffield Hallam university, particularly his benchmarking study, has informed much of the debate on coastal towns.
During that period, several hon. Members, some of whom are here this morning, some of whom are not, took a particular interest in the issues that affect coastal towns. There is no doubt that there was a general feeling in many coastal towns, particularly in England and Wales, that the previous Government sidelined them and did not give them their fair share of resources or put them at the forefront of policy thinking and policy making.
I am proud to have in my constituency Skegness, which is one of the country’s most famous seaside resorts. Members may not be surprised to hear that, according to Saga, it is the number one place in the UK to retire to. It is still a popular family tourist destination, with 600,000 visitors each summer and 26,000 caravans on the east Lincolnshire coast. I am pleased to report that, unlike some other historic coastal towns, Skegness is still a thriving success. It achieves that by continuing to attract visitors, from the UK in particular, but also by its private and public sectors working together, with excellent locally led innovation and entrepreneurial flair making a significant contribution.
Skegness is not alone. Most of Britain’s coastal towns have many positive features, including attractive scenery, excellent leisure activities and some significant Victorian and Edwardian buildings, but they are also significant and important economic bases. The population of our coastal towns is approximately 3.1 million, which is more than the total population of Wales. Members may be aware of the recent report produced by Professor Fothergill’s team, which concluded that 210,000 people are employed in tourism alone in coastal towns—more than are employed in the UK in the pharmaceutical or motor industries, or in radio and television combined. Economic activity in coastal towns contributes £3.4 billion to the UK economy. It is clear that such towns are assets, not liabilities, and need to be treated as such.
I am delighted to see Members here from all corners of the UK, but it is important to remember that, despite there being commonalities among coastal towns, each one is different, and each faces its own unique set of challenges. I am sure that other hon. Members will wish to highlight some of those that pertain to their constituencies.
It is important to set out some of the key challenges that are common to most coastal towns. The first is that they have severe pockets of socio-economic deprivation. Twenty-one of the 88 most deprived authorities are in coastal areas. There are high levels of benefit dependency: 15.2% of the working-age population in coastal towns claim benefits, compared with 12.6% across the rest of the UK. The average incapacity claimant rate in seaside towns is well ahead of the English average. There is poor housing stock in many of our coastal towns, with 50% described as “non-decent” compared with approximately 30% elsewhere.
Coastal towns face significant environmental challenges such as rising sea levels, storm surges and eroding coastlines. There are low levels of employment: the average unemployment rate is significantly higher in coastal towns than it is elsewhere. Those complex and interrelated issues need to be addressed in a co-ordinated and comprehensive way.
Bill Esterson (Sefton Central) (Lab)
I am grateful to the hon. Gentleman for giving way and for securing this debate. My constituency includes Formby and parts of Crosby and Hightown, which are coastal towns. Among other things, the Sefton coastline is characterised by its 20 miles of sand dunes. He mentioned the environment, which is an important issue to my constituency and to that of my neighbour, the hon. Member for Southport (Dr Pugh), who is also here today. Does the hon. Member for Boston and Skegness (Mark Simmonds) agree that it is vital to continue investment in, support for and investigation of adequate sea defences for coastal towns?
Mark Simmonds
I thank the hon. Gentleman for that critical intervention. He is right to highlight the importance of maintaining coastal and flood defences not just in his constituency but throughout the whole of the UK. I cannot give him the assurance that he is looking for, but I am certain that he and other hon. Members on both sides of the House will lobby vociferously to ensure that coastal defences are maintained. There is a big question about the efficiency and effectiveness of the Environment Agency, which sometimes hinders local schemes and solutions to such problems, and that needs to be looked at carefully.
In the short time since the coalition came to power, it has had a positive impact. Some of the policies that have been put in place and changes that have already been made will have a positive impact on coastal towns. For example, reducing the threshold for national insurance contributions and, as outlined in the Budget, reducing corporation tax, particularly for small companies, will have a particular resonance in many coastal towns, and the promised help for Britain’s tourism industry through reinstating favourable tax rules for furnished holiday lettings will avoid a significant detrimental impact.
Most significant of all are the coalition’s proposals to scrap regional strategies and regional development agencies and to devolve decision making and power to local authority level, thereby allowing decisions to be made at that level—in effect, returning decision making and power to coastal local authorities rather than distant RDAs and other quangos that did not really understand the importance of coastal towns and the complex issues involved. I very much hope that that will not be seen as a role for the public sector only, but that the private, voluntary, charitable and social enterprise sectors, which I believe have a significant role to play, will be stimulated.
One of the key messages that I want to get across this morning to the Minister is that although many coastal towns recognise that they must play their part in sharing the burden of reducing expenditure that will inevitably come from the Government’s difficult decisions, they must not take an unfair share of the burden. We all accept that there will be tough spending settlements for local authorities, Government Departments and Executive agencies, but we need to ensure that they do not have a disproportionate, negative impact on many of our coastal towns.
Mr Graham Stuart (Beverley and Holderness) (Con)
When large Departments have to make cuts fairly deeply and relatively quickly, the tendency is to cut out all the smaller centres of service provision and concentrate on the larger centres. That works against rural communities and coastal towns. Does my hon. Friend agree that, although we recognise the severity of the situation and the need for speed, Ministers need to give local people the opportunity to deliver the savings and find a way of doing so that does not denude coastal towns and rural areas of the services on which they depend?
Mark Simmonds
My hon. Friend makes a powerful, important point. I understand that the Government direction of policy is to do exactly what he requests, in that decisions should be devolved down to the lowest possible level and those who really understand the needs of each community. One significant fault of the previous Government was that they regarded centralised decision making as the solution to many of these problems and they lacked understanding of the needs of and changes in specific local communities and how to reflect those.
I should like to trot through five specific areas that I think that the coalition needs to focus on if we are to improve the lives of those who live and work in and visit our coastal communities. First, on economic diversification, we need to find ways of putting the economic heart back in our coastal towns. Only a few years ago, coastal towns were not only people’s holiday location of choice, but the gateway to the empire, with goods leaving and coming into the country from many ports; but far too often, that economic dynamism has gone. Too many of our coastal towns are now magnets for the long-term unemployed, those on benefits and people with long-term medical conditions. More must be done to diversify the economic base of our coastal towns.
Understanding the macro-economic constraints, we need to put in place medium to long-term strategies to encourage business to locate and create employment in our coastal towns, creating economic diversification. An obvious example of that would be the establishment of green technology companies, particularly those connected to green energy generation. My hon. Friend the Member for Waveney (Peter Aldous) is particularly passionate about that work in his constituency.
The second area is funding formulae, which were the subject of significant debate in the previous Parliament. The independent National Audit Office should be tasked with examining the funding formulae to ensure that coastal towns and regions receive their fair share, albeit that perhaps it will diminish, of resources for public services. The formulae should reflect the visitor numbers to particular areas. I found the starkest example of that problem in Blackpool, where the vast majority of some 18,000 people a year who visit its walk-in health centre do not come from that town, yet Blackpool primary care trust, which is responsible for the centre, currently receives no extra money. There are similar problems in Skegness and elsewhere. There is a double whammy in funding for coastal towns because of the elderly and vulnerable population and the large number of visitors.
Thirdly, there are high levels of benefit dependency in coastal towns—significantly higher than in other areas. The Government are planning some innovative work on benefit culture that will incentivise people to come off benefits and get back into work, and ensure that work pays and that people are not better off on benefits. The Government may like to consider piloting some of these schemes in our coastal towns.
Fourthly, many coastal towns are blighted by poor-quality housing stock and many have high levels of houses in multiple occupation. Local authorities must retain the flexibility to deal with HMOs and prevent their development in localities where they are not wanted or where there is already over-supply.
Fifthly, many coastal towns’ public services are overstretched as a result of their demographics, limited catchment areas and poor transport infrastructure. If I could ask the coalition to focus on one area, it would be improving public health in coastal towns, where there are higher rates of alcohol abuse, smoking and teenage pregnancy. There are 74.8 conceptions per 1,000 girls between 15 and 17 in Blackpool, compared with the national average of 42.6. I accept that that is an historical statistic, but it still makes the point.
I urge the Government to work alongside not just the traditional local authorities with responsibility for health, but the broader charitable and voluntary sector, which has a significant role to play. I am sure that all hon. Members agree that in all coastal towns there are a significant sense of community and people who want to make a difference. There is a direct correlation between poor public health and high rates of people on incapacity benefit further down the line.
I should like the Minister to make a commitment. The previous Government set up a cross-departmental working group to pull Departments together on all the various aspects of that issue. I want to ensure that that working group continues and that it will focus particularly on coastal towns. Although that might sound administrative and bureaucratic, there is no doubt that cross-departmental working can lead to achievements. Perhaps the best example of that is the Office of Life Sciences, which has made a significant contribution to promoting the interests of the British pharmaceutical sector.
Many other hon. Members wish to speak, so I will draw my remarks to a close. There are many significant issues relating to coastal towns that I have not had time to mention, including communities running facilities; raising educational aspiration and achievement; the performance of the Environment Agency and flood defences; the importance of the public realm in attracting people to coastal towns; and support for the elderly, who are attracted to retiring to the coast. Too often under the previous Government coastal towns were ignored and marginalised, despite one or two Labour Members fighting to change that perception. I hope that the coalition will not make the same mistake. Coastal towns have a significant contribution to make. They need to be reinvigorated and focused on by central and local government.
Brandon Lewis (Great Yarmouth) (Con)
I commend my hon. Friend the Member for Boston and Skegness (Mark Simmonds) on securing this important debate.
I shall focus primarily on inter-departmental working, which my hon. Friend mentioned, because it is so important that we have joined-up thinking on coastal towns. If hon. Members will indulge me, I will deal with this matter mainly with reference to my constituency of Great Yarmouth, as others can speak for their own.
Great Yarmouth highlights exactly why coastal towns are so important, how diverse they are and why it is vital to tie together essential improvements in infrastructure—both transport and communications—and recognition of the tourism industry and the niche industries that some of our constituencies deal with. Companies in my constituency supply the defence industry and have dealings with the oil and gas industries. Obviously, being so close to what was the largest offshore wind farm in Europe, some of them are involved with renewable energy, with new wind farms to come. My constituency also suffers from coastal erosion, as do other hon. Members’ constituencies.
To see real economic growth we need improvements in transport infrastructure—both road and rail—and in broadband, so that companies looking to take advantage of niche industries can communicate. Broadband is an important tool.
As has already been mentioned, tourism is often undervalued, yet it is one of the most cost-effective industries, through which employment can be increased in constituencies such as Great Yarmouth. More than 5,000 people in Great Yarmouth are employed in the tourism industry, which is worth about £500 million to the economy. Given that my constituency is the second largest seaside resort in the country, we feel that we play our part in the economy. We cover the whole remit: from straight tourism and seaside tourism, to the Norfolk broads and stately homes—something we share with my hon. Friend the Member for Waveney (Peter Aldous). We also cover bingo and gambling, including horse racing and dog track racing.
We have offshore oil and gas, and there are renewables to come, but we suffer, as I said, from a huge amount of coastal erosion. A clear, transparent policy on coastal erosion is needed. None of us here and none of the residents in our constituencies genuinely believe that we can protect every inch of coastline: neither the economy nor nature allows for that. There is certainly a need for transparency and clarity about what we can do, and a need to ensure that the money the Department for Environment, Food and Rural Affairs and other Departments can put into dealing with coastal erosion is spent on protecting the coastline. A rough estimate is that during the past four or five years, the previous Government’s pathfinder and other schemes spent almost £500,000 on reports on Great Yarmouth, which often led to other reports with not a single bit of work being done to protect the coastline.
Scratby, which my hon. Friend the Member for Boston and Skegness has seen, is a key area that needs work to protect its coastline. Most of the necessary coastal erosion protection could have been finished with the money that went into more and more reports. The previous Government spent £200,000 in areas such as Great Yarmouth just before the election, coincidentally—I am sure that it was not intended to be an election tool. At the same time, they were penalising such areas—Great Yarmouth has a new deep water outer-harbour that can service our country—with a port tax. We must get away from that mixed-up thinking. We must send a clear message and be honest about what we can do to protect out coastline from erosion.
I will not speak for long because I know that other hon. Members wish to contribute. I have highlighted why cross-departmental work is so important. The Department for Communities and Local Government is important in allowing local authorities to look after residents by removing the regional spatial strategy, and by allowing council tax and business rates sometimes to move back to local authorities to allow those authorities to move forward. The Department for Culture, Media and Sport covers tourism and gambling, which are important for areas such as Great Yarmouth. DEFRA is important in dealing with coastal erosion, as is the Department for Transport for transport links, and DCMS for broadband. The Department of Health is also important in the context of the cost to our health service and our economy as a whole of the levels of alcohol consumption often associated with visitors to such constituencies.
All those Departments have a vital part to play in constituencies such as Great Yarmouth and coastal constituencies throughout the country. The most important request that I can make to the Minister today is for cross-departmental work at official and ministerial level to ensure that our coastal towns, which can provide so much in moving our economy forward, developing new renewable energy industries and developing our tourism industry even further, can work together to achieve that growth for our own communities and the wider country.
Laura Sandys (South Thanet) (Con)
I thank my hon. Friend the Member for Boston and Skegness (Mark Simmonds) for introducing this subject and for being a strong champion of coastal towns and the issues and challenges facing them. As many hon. Members have said, coastal towns have different and unique characteristics, and it is important to examine and address them in policy terms. South Thanet is one of the most beautiful parts of the country—I am sure that other hon. Members will claim that for their constituencies—but it is the 64th poorest district in the country, which is not exactly the usual profile of the south-east. We have the highest number of looked-after children in the south-east. Two wards have more than 80% of privately rented properties and most tenants are housing benefit recipients, and 39% of our economy is in the public sector. Some 15% of the private sector probably supports that public sector investment. That is a precarious economic model looking into the future.
During the past 13 years, despite many years of a booming economy, Thanet has not benefited proportionately to the rest of the south-east. In some areas, deprivation has significantly increased. With the difficulties that we face, we cannot build on, or support ourselves through, the previous economic successes of the past 10 years. The economic profile inland is totally and radically different, which I know is the same for many of my colleagues with seaside constituencies. Canterbury has a significantly different economic and social make-up from Thanet, Dover or Hastings and Rye.
During the past 13 years the previous Government pumped millions of pounds into my area. That was well-intentioned, but the result was an increase in deprivation. There were top-down assessments of what was needed, little or no involvement of the community, and outreach workers who had no knowledge of the area; and an increasing number of projects focused on deprivation attracted more deprivation to our area.
Bill Esterson
As a man of Kent, I am familiar with Thanet and the problems in Ramsgate that the hon. Lady described well. I understand her point, but cutting money is not the way to deal with the problem. Other hon. Members have called for cross-departmental co-operation, but pulling the plug disproportionately—that is what is on the table at the moment—will not solve the problem. I agree that money could be better spent and that lessons could be learned from the past, but I hope the hon. Lady agrees that we need continued investment, not cuts at a time when the private sector—
Mr Christopher Chope (in the Chair)
Order. I must cut the hon. Gentleman off.
Laura Sandys
I understand the hon. Gentleman’s point, but in many ways the money that was invested in our area was an incentive for deprivation, not aspiration. We need a different approach.
Mr Graham Stuart
Another aspect of the previous Government’s endless expenditure of money with little delivery for coastal towns was regeneration partnerships, which lasted for a short period and then came to an end. There was never any follow-through. Coastal towns need a consistent policy framework and consistent work to develop their economic potential. What they do not need is short-run, small projects that capture a headline, or eye-catching initiatives that do not deliver on the ground. That is what happened too often.
Laura Sandys
I absolutely agree. We had many short-term projects. My area of Kent ended up as a centre of excellence for deprivation, which was a result of money being deployed from the centre with little community involvement. I am talking not about less funding but funding that incentivises new businesses and builds a stronger economy, with a sense of future and aspiration.
We have become a magnet for vulnerable people. I was talking to a young couple who had been sent to Thanet from Rochester to ensure that they received all the services they needed, having kicked their drug habit. They looked to Thanet to provide them with rehabilitation and services such as mental health support. Many parts of the south-east, such as London and Kent, use some of our seaside towns to receive people with such issues. It is important to address those issues, but they should be addressed by the local authority in question. We cannot be a centre of rehabilitation services for the whole of the south-east.
My message is clear and important. Our NHS trust and our GPs are there to support our own community. We are there to support others when we can, but we must not have incentives or investment that further attract people, when we have ever-less capacity to ensure that we can support them into the economy with the necessary jobs.
We also have a problem with looked-after children from out of the area that has not been addressed in the past 13 years. Charities have been clear about the impact on those children, who come from as far away as Birmingham, Hounslow and Richmond, which may be two and a half to three hours away from where they are located, in Margate, Ramsgate or Broadstairs. That is not good for children and it is not right for them to be brought up in such places, away from their extended families. I am pleased that my hon. Friend the Under-Secretary of State for Education has made a clear commitment that he will enforce the guidance that looked-after children should not, except in extreme circumstances, be located more than 20 miles from their original local authority.
I am pleased that we are looking at the issue of housing benefit, because in my area, if someone owns a house in multiple occupation, they can receive a return of between 11% and 14% on their investment due to the low property prices. An equivalent HMO in Westminster—I do not know how many there are—would make a return of between 5% and 7%. We cannot have a system where the returns in coastal towns are so high that those places become a magnet for HMOs and landlords who are attracted to the cheap property prices.
I will add a word of caution. If housing benefit is to be universally reduced, we must take care to ensure that seaside towns with their low property prices and cheaper living costs do not once again become a magnet for those on benefits who come from outside the area.
Ian Swales (Redcar) (LD)
I am from Redcar, and on Thursday there is a planning hearing about having HMOs—which will involve secure accommodation for people on bail, remand and so on—in the heart of our resort. There will be massive financial returns for the people involved, but my concern is about the planning and the fact that even though local residents and the local authority would prefer not to have those hostels built in that place, they have little power to do anything about it because of the planning laws put in place by the previous Government.
Laura Sandys
The Minister for Housing recently announced that we are to give local authorities the opportunity for targeted selective licensing. I will urge my council—as I am sure other hon. Members will urge theirs—to ensure that HMOs undergo a severe and rigorous licensing process so that we start to create a deterrent, and so that seaside towns do not become a dumping ground for many different social problems.
Mr Graham Stuart
May I chide my hon. Friend a little? One of the great—and rarely remarked on—legacies of the last Labour Government was that they built so few houses. There was a tremendous increase in housing need and vast increases in council waiting lists. I would hate to see councils remove the one possibility for people to have a home and roof over their head because of the popularity of the local area. That is a result of the failure of the last Government and we must address the issue at its root. We must not ruin things before we do that.
Laura Sandys
My concern is specifically with housing stock. My constituency has enough housing, but it is in an incredibly bad state and there are a lot of empty properties that need to be brought back into the housing stock. One would not want to keep a dog in some of the flats I have been into. The neglect and lack of responsibility that some—not all—landlords have shown towards their tenants is not acceptable. More houses need to be built, but I would like to see a lot of empty houses brought back into the housing stock in a safe and adequate condition.
On the upside, there are great opportunities. As my hon. Friend the Member for Boston and Skegness has discussed during this debate and at many conferences, tourism is one of the most effective ways of stimulating small businesses and ensuring a greater number of start-ups, and not just specifically tourist-sector businesses. Tourism brings in foreign currency, spurs new businesses in associated companies and supports our high streets. It offers our less-skilled work force more jobs. Therefore, we must ensure that the domestic tourism agenda and the small business sector are seen as important drivers of the recovery that we badly need in our coastal towns.
I am delighted that following a parliamentary question, the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk)—he was in the Chamber recently—has agreed to meet a delegation of MPs and to focus on how we can boost the tourism sector. We need a clear set of policies to accommodate the vulnerabilities of our seaside towns. I believe that the coalition Government will put those policies in place and ensure that that we are not left, yet again, at the end of the line.
Mr Christopher Chope (in the Chair)
Before I call the next speaker, if we are to fit in everybody who wishes to speak, contributions need not be longer than five minutes—perhaps less.
Paul Maynard (Blackpool North and Cleveleys) (Con)
It is a pleasure to sit under your chairmanship, Mr Chope, and having heard your instruction, I shall be very brief indeed.
Rather than list all the possible ills of public health and social deprivation found in my constituency, I shall focus on two topics—both thematic—in what I hope will be the first of my many contributions on this subject. I shall make a comparison between the coastal towns represented by hon. Members in the Chamber today and the experience in the rust belt of America—those aging industrial towns in the mid-west that, after their primary industries declined sharply in the middle of the century, had to go through a reinvention, a renaissance, almost a renovation.
A report was produced by the Brookings Institution, which is a centre-left think-tank. I do not always read centre-left think-tank publications, but on this occasion I thought it was worth while. The report, “Restoring prosperity”, it is worth reading in full. When I read it, I see my constituency and, I suspect, those of other hon. Members. That report states:
“Suffice it to say that each forgotten city has been accused of being the regional or even national ‘capital’ of one social ill or another. Such stories have a profound and harmful impact on the city’s collective mindset because they shape how local people see themselves. According to…a professor of American Studies at Youngstown State University, residents of highly stigmatised cities have ‘come to expect failure.’ This is a vicious cycle because as individual and collective expectations about the city consistently diminish, citizens become less hopeful and less likely to engage in civic affairs, thus decreasing civic capacity and governing capacity. They are also less likely to demand adequate city services and less likely to question other forms of dysfunction. Many people lose the recognition that things can change, that they could effect change—even those who work in local government”.
That is a bleak portrait of the situation in which we find ourselves, but I recognise elements of that description in my town of Blackpool. I do not say that with any pleasure.
For many years, people in Blackpool have suffered blow after blow after blow, not least the decision on the casino, which seemed to symbolise the fact that the Government had turned their backs on the town. I returned from Wembley a few weeks ago on a chartered train that the football club had hired for us. It was a six-hour trip with no air conditioning; the carriage was boiling hot, but full of happy people who, for the first time in a good few years, were displaying what I would call civic pride. Their team had got into the premiership and at last something good had happened to their town. That had not happened because of something that the state, the Government or the council had done. It was part of something that the community had done and because of a football club that enjoyed terrific community support. There were more people going to Wembley than could be crammed into the Bloomfield road stadium. People attended from across the Fylde coast.
In the two minutes I have left, I shall not focus on what the Government could or should do, although I welcome having a dedicated Minister responsible for tourism, as well as the fact that the threat to furnished holiday lets has been diminished and the way in which public health is to be promoted through the council and social care functions are to be brought together through changes to the PCT and the council. Although the report by Professor Fothergill, to which my hon. Friend the Member for Boston and Skegness (Mark Simmonds) referred and which highlighted the importance of employment in seaside tourism, was a very important statistical document, it was not a toolbox, which is what we now need. We need a range of policies from which local communities can choose what is best for themselves. We perhaps need less central Government prescription and less stigmatisation. It is important to have these debates, but each time that we have one, it almost underlines the fact that coastal towns are seen as a problem. I almost start to tear my hair out at that.
Reading the Sunday papers, my heart sank when I read the comments of Janet Street-Porter, a lady for whom I generally have a lot of time. She is a very well qualified architect—not many people know that—and her views on 20th-century architecture in particular are fascinating and spot-on. However, when she heard that Blackpool was to apply for world heritage status, a bit of metropolitan sophistication seemed to come across her and her eyebrows raised somewhat. She described it as “bonkers”. She stigmatised the town yet again and said that when she next visited, she would bring a picnic. I shall say one thing to her: when she does bring her picnic up to Blackpool, could she please get in touch with me? I would happily take her round Blackpool and show her many nice places where she can have a picnic, many nice places where she can eat, and many nice places—including one in the constituency of the hon. Member for Blackpool South (Mr Marsden), which has the nicest bed and breakfast in the country, in my view—where she can happily stay.
All Members of Parliament, when we talk about our seaside towns in this Chamber, need to focus not just on the negative things where we come top—I am talking about bad social consequences, social ills, deprivation and so on—but on the good things that happen. That is why it is good that in a debate on coastal towns, I can talk about the great opportunities that Blackpool will have in the next year in the premiership. Let us focus on the good things that happen in our seaside towns, not just on the negatives. I hope what when we next debate seaside towns, I can report back on Janet Street-Porter’s visit. Given that I have a few minutes less than I had hoped for, I shall leave it there.
Dr John Pugh (Southport) (LD)
I congratulate the hon. Member for Boston and Skegness (Mark Simmonds) on starting this important debate. One of the more useful things that I did in the previous Parliament was persuade the unwilling Chairman of the Select Committee on Communities and Local Government to do a report on coastal towns. I guess we could describe it as a relatively seminal report in so far as it provoked a number of other measures. We discovered, as hon. Members have already exhibited, that not all seaside towns are the same, but there is a family of problems that most of them appear to have.
One of the problems is transport. Most of the towns evolved in the age of the train; often, they have now lost the train and badly need a road now. There is a lack of quality employment, or a lack of the right mix of employment, and in many seaside towns wage levels are surprisingly low. There are the housing problems to which hon. Members have alluded, particularly in connection with HMOs. The hon. Member for South Thanet (Laura Sandys) might be aware that housing legislation on HMOs has been tightened up quite recently, but councils often lack the resources to administer and police such measures. There are issues that I think will affect the constituency of my hon. Friend the Member for St Austell and Newquay (Stephen Gilbert) with regard to licensing, nightlife and precisely what that does to a resort’s family environment.
In many resorts, there is clearly a severe demographic imbalance. I remember that one of the more disturbing aspects of our Select Committee inquiry was the discussions that we had with youngsters, some of whom I think lived in Kent. They were talking about leaving their resort and took that as axiomatic—when they got employment in the future, they would not work locally.
Of course, there is also the problem of coastal erosion, although coastal erosion is a mixed bag. The hon. Member for Sefton Central (Bill Esterson), who spoke recently about the loss of his coast, might be aware that almost on the same night that the material was lost from his coast, it appeared on mine. If any hon. Members are short of a bit of beach, please come to Southport and we might be able to help you out.
We found that lacking in many seaside resorts—this was a general conclusion—was a clear vision of where they were going and the political will to deliver on that. People ought not to underestimate the difficulties of managing change in seaside resorts with a largely elderly population. However, in the inquiry we did find many instances of genuine success and successful regeneration. I remember visiting Whitstable, where the regeneration seemed to be almost entirely based on fish, but as it is extraordinarily tasty and the restaurants are good, that seemed to be a very successful model. As I am sure many hon. Members know, Southport has become a classic resort. Other resorts were not quite certain of the direction in which they were going—an example of that was Margate: one lobby in the town wanted the old seaside environment to be recovered and restored, whereas another looked towards cultural developments associated with the artist Turner and more highbrow appeal.
Complementary to the report, and something that made an important difference to people’s thinking, was the BBC programme “Coast”. It started as an Open university, rather anoraky sort of thing, but it ended up being phenomenally successful and opened the eyes of many people to what the English coast offers.
Despite what we have heard today, the upshot all that activity was relatively positive. The Government, having first ignored the Select Committee report, came back a second time when asked to do so by a persistent Chairman and put some money on the table. I am referring to the Sea Change money, which I think amounted to a pot of £60 million. There was much activity in and around this place; there were many conferences; the relevant all-party groups sprang to life and there was much talk about the regeneration of the seaside. Then, come the election, there was even more activity. A lot of political attention is always paid to coastal towns, because for some peculiar reason, they end up being political battlegrounds. In fact, quite a few coastal towns—happily not my own—changed hands at the last election; I am thinking of Eastbourne, Hastings and others. Post-election, however, surely we have everything to gain by acting collectively over the next five years, because—strangely enough, in these dark and recession-ridden times—there is a great deal of hope around.
We are experiencing a genuine increase in inbound tourism in this country. It is a no-brainer for the Treasury that if it encourages inbound tourism, that is a win—a plausible win—in terms of the balance of payments and taxation. That is not a vain hope, because the Sheffield Hallam study, which the hon. Member for Boston and Skegness referred to, showed that in many places there is considerable scope for regeneration and genuine economic progress.
There are genuine concerns as well, though. One of the big problems for coastal towns, emphasised in the Conservative paper, “No longer the end of the line”, is transport. That is a big issue for many places—Southport, Hastings and all sorts of places. Looking at what is happening to the national budget at the moment, very few of us can be optimistic that the bypass that was always going to be built will appear soon. Also, there is the loss of the regional development agencies and the construction of the embryonic local enterprise partnerships. Those may be dominated by urban interests, and funding that might be regarded as coming our way might go elsewhere. I would welcome the Minister’s view on what will happen with the Sea Change money.
Before the election, all parties promised much. The Conservative pamphlet, “No longer the end of the line”, promised lottery funding for private piers. I think that we have to recognise that that probably will not happen, but the Conservatives did emphasise a new approach to local transport, which I think in constrained times we might want to consider. They also promised, or talked about, business rate discounts, which are certainly worthy of investigation.
The key test will be how the Government manage the reduced funds and, in particular, what happens to the Sea Change money. Those of us in a seaside community, if I can describe us in those terms, do not want to go back to square one, but at the moment it is not particularly clear what the next steps will be. The debate initiated today by the hon. Member for Boston and Skegness has done an enormously good job in focusing the Government on the fact that there needs to be a plan for the next steps. We need a degree of strategic thinking. That has gradually evolved and, in the future, it needs to be built on.
Mr Graham Stuart (Beverley and Holderness) (Con)
It is a pleasure to take part in the debate. I congratulate my hon. Friend the Member for Boston and Skegness (Mark Simmonds) on doing so much to highlight the needs and interests of coastal towns by producing the report “No longer the end of the line” and through his efforts today. Not only is he handsome and charismatic—he particularly liked that phrase when I asked him what I could say about him—but he has made a fine speech and he does a fine job on behalf of coastal towns.
Rather like my rugged friend, coastal towns sometimes fail to recognise all their qualities, but they are in fact tremendous, positive centres. To pick up on the point raised by my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard), we really need to celebrate coastal towns and what they do. As my hon. Friend the Member for Boston and Skegness said, they employ many people and they are great centres. Although there are issues about houses in multiple occupation and other aspects of housing, coastal towns often provide relatively low-cost housing, and they have acted as havens that people can live in and enjoy, albeit that that was the result of the previous Government’s failure to build houses elsewhere.
Overall, coastal towns are tremendous places to live, and the people who live in them love them. Sometimes they get a bit down, because coastal towns can be a bit inward looking; they can slag themselves off and see themselves as not being tremendously interesting or dynamic, and young people often look to leave. However, it is easy for people in coastal towns to underestimate the strength of what is on offer and their economic future, and I agree with what other hon. Members have said in that respect.
Given the state of the public finances that we have inherited from the previous Government, it will fall more than ever to local people—town councillors, county councillors and entrepreneurs—to step up to the mark. The Government are constrained in what they can do to promote coastal towns, and they need, most importantly, to get out of the way of entrepreneurs who want to make money and to build businesses, profits and employment. The incoming coalition Government have therefore done a number of things significantly to boost coastal towns, as has been said.
I want, however, to focus on an essential component of a successful seaside town economy—the amusement arcade. Colleagues smile, which I am sure is partly because they have enjoyed time in amusement arcades and because of the quintessential nature of such places. However, arcades are an important part of what is on offer in coastal towns; they provide a focus, and many retailers around them rely on the footfall that they bring with them.
Typically, arcades are small family businesses, and many have been operating for generations. The traditional amusement arcade machine sector is extremely fragile, and there has been a tremendous loss of jobs over recent years. The sector has experienced an average 21% reduction in revenues since 1 September 2007, and a lot of that dates back to the Gambling Act 2005, although, to a small extent, it also reflects the impact of the smoking ban and the downturn. Every week brings further business closures and redundancies, damaging local economies, communities and tourism. The British Amusement Catering Trades Association estimates that at least 216 arcades have been lost, representing 1,350 jobs.
Recent arcade machine manufacturing figures give an indication of the future for arcades. If arcades do not invest in new machines and do not replenish and renew their offer, they will be less attractive, so the manufacturing sector acts as a real indicator of their future business. Recent manufacturing figures indicate that annual machine production—that production takes place in this country and is an important employer—has fallen from 55,000 machines a year to 12,000. Two associated companies have been forced into liquidation this week, so we need action, and we need it soon.
William Clark, a constituent, was born in a flat above the Withernsea amusement arcade that his father opened 50 years ago, and he now runs 28 arcades in Yorkshire. He told me:
“We had 500 employees 3 years ago. Now we are down to 220. Three to four years ago I spent £1.4 million on new equipment. Last year it was £100,000…The cause of this was the provisions of the Gambling Act”—
which was brought in so thoughtlessly by the previous Government—
“preventing amusement arcades from having £2 stake machines. If the intention of this was to ban these machines, why are they still allowed in bookmakers, a far harder gambling environment?”
Why did the previous Government pick on family amusement arcades and boost hard gambling centres in betting shops?
Mr Clark says that owner-operators are an integral part of the local community and economy. As small business owners, however, they are hit disproportionately by the weight of regulation. He says:
“The new regulation and bureaucracy is forcing owner-operators out of business. I pay approximately £70,000 in regulatory fees alone.”
That is because of the quango that regulates this area. The coalition promised to do something. Mr Clark says:
“David Cameron said before the election that he supported the reintroduction of the £2 stake machine. We are asking for the government to deliver their promise. If they got their finger out Seaside arcade operators could benefit this summer.”
There are so many issues on which we need long-term thinking and vision. However, on this issue, which is absolutely at the heart of the business community, employment and what is on offer in coastal towns, which depend on tourism, the Minister could do something soon, and I ask him to do so.
Mr Christopher Chope (in the Chair)
Order. We have now completed the list of speakers who gave notice to Mr Speaker in advance. We have about 15 minutes, and about six Members are still seeking to catch my eye.
Eric Ollerenshaw (Lancaster and Fleetwood) (Con)
I will try to be brief and not to repeat what other hon. Members have said. I congratulate my hon. Friend the Member for Blackpool North and Cleveleys (Paul Maynard) because he hit the nail on the head in terms of my responsibilities in the town of Fleetwood. However, I should add that, although a recent study somehow missed Fleetwood off and instead included it in something called Greater Blackpool, anyone who has ever been to Fleetwood will know that Mr and Mrs Fleetwood do not regard Blackpool as either greater or a part of them. That, however, goes to the core of the issue.
Fleetwood is a 19th century town. It was once at the end of the west coast main line, and we actually have a North Euston hotel. The main line train from London used to come to Fleetwood to take the fish back to Billingsgate. The fishing industry was knocked out in the ’60s and ’70s. Since then, the town has somehow lost its heart. Today, what is left of the fishing industry—the inshore boats that face problems in other hon. Members’ constituencies, too—faces the consequences of the difficult balance that the Government will have to strike in terms of renewable energy. The fishing boats of Fleetwood are being laid up as a result of an increase in the number of wind farms on their territory. There is also a lack of any statutory compensation, and I find it incredible in this day and age that, even though fishermen are usually a one-man business, they have to negotiate compensation themselves when wind farms go up on their fishing grounds. I hope that that will be addressed nationally, and I know that other hon. Members feel the same way.
My hon. Friend the Member for Boston and Skegness (Mark Simmonds) raised other issues. There is real potential in coastal towns. For example, Fisherman’s Friend is an internationally recognised company in Fleetwood that exports to more than 100 countries. We also have a fish processing industry. Believe it or not, great articulated lorries come to Fleetwood from Hull, Brixham and all around the country night after night because of the skills of certain processing families, whose products are then transported out of Fleetwood to major hotels and restaurants. Those companies could expand and they say that they could take on more work.
Do hon. Members realise that we export 50 tonnes of whelks to Korea every year? Apparently, whelks are an aphrodisiac in Korea, and I would ask hon. Members to try them. [Interruption.] My experience of whelks is not too happy, I must say.
Eric Ollerenshaw
There was certainly a lack of success.
I disagree to some extent with my hon. Friend the Member for Beverley and Holderness (Mr Stuart), who talked about freeing up businesses and deregulation. All of that will help, but even though our businesses can take on new people, we do not have the transport system. A railway line still exists, but there is no railway service on it. We have one major road—the A585—which is not dualled. We have actually got a tram and we are the end of the tram line from Blackpool, but the tram is not working at the moment because it is being upgraded to a supertram. The supertram may help with some aspects of tourism in the town, but there are inevitably delays to major projects and the repeated delays to the scheme—I hope that the Minister will take a look at it—have led to businesses closing down. They cannot wait that long.
What we need is, I think, the same for many coastal towns. The projects in question are not big infrastructure deals such as high-speed rail. Small investment is needed, but that small investment could in some towns—particularly, as the hon. Member for Southport (Dr Pugh) said, when it is for transport—bring extra jobs and release potential.
Mr Alan Campbell (Tynemouth) (Lab)
I congratulate the hon. Member for Boston and Skegness (Mark Simmonds) on securing an important debate so early in the new Parliament. I have represented a coastal seat in the north-east since 1997 and I am pleased to find what genuine understanding new Members have. Let me warn them, however, that their predecessors also understood the problems of seaside towns, but without action to satisfy the huge demands of local residents and visitors there is a price that may be paid.
If I understood the hon. Member for Blackpool North and Cleveleys (Paul Maynard) properly, he was talking about some specific policies for seaside towns that might be implemented locally, as opposed to the more generic issues such as housing and health that we tend to discuss. I agree with him very much. I also agree with the hon. Member for Southport (Dr Pugh) that the first thing that seaside towns need to decide is what they are for. That is an important first step.
I wanted to make some brief remarks in the debate so that I could add a certain balance to some of the comments that have been made. As far as I am aware the previous Government did not sideline seaside towns. The pleas from the hon. Member for Boston and Skegness and others for a continued joined-up approach across Departments is evidence that that Government took seaside towns seriously. In 2010, whatever the problems of seaside and coastal towns—they remain great—they are nothing compared with those of 1997. The previous Government at least began to try to come to terms with the changes to the economy, which happened in a slow process over two or three decades. Those changes were not like a factory closure, in which thousands of people are made unemployed; they took the form of the gradual decline—in some cases the death—of seaside towns.
[Mr David Amess in the Chair]
In my constituency millions of pounds of public money went into Whitley Bay and elsewhere, and, importantly, that levered in a large amount of private investment. However, when the local administration changed in 2009 it looked exclusively to private investment, with the result that the regeneration stalled. I look forward, in a local and central Government context, not just to words that people will say about seaside towns, but to resources being committed to them.
We know the fate of regional development agencies, but I want to say something about their importance to seaside towns, or at least my constituency. There would not have been a new shopping centre in the centre of Whitley Bay without the important input of the RDA. The renewal of the west quay on the Fish quay in North Shields would not have happened without resources and encouragement from the RDA. Also, the regeneration of the Spanish City site, which needs to be completed, involved a significant amount of public money, which was brought in through the RDA, which understood its importance.
It is in that context that we need to pay attention to the infrastructure. It is true that much of the infrastructure of seaside towns is Victorian and Edwardian, but it is beyond the wit of private investors to come into my constituency and deal with, for example, the sea front, which stretches for two and a half to three miles. It would serve no profitable purpose for the private sector to come and do anything with it. That is why the public sector has a role to play. I just cannot agree with the hon. Member for Beverley and Holderness (Mr Stuart) that the best thing that government can do is get out of the way.
As to tourism, which is important, one of the first things that One NorthEast has done, regrettably but in many ways understandably, is to cut millions of pounds from the budget. That includes some of the sub-regional and regional tourism money. I hope that that money finds its way to local authorities, because it is important that we advertise a delightful constituency to visit and stay in. If anyone is coming to the north-east and wants to go to Hadrian’s wall, or do the castles visit and go to the Metro centre to shop—all things that I recommend—we want them to stay at the coast. We have to be part of the offer that is made. Unfortunately for local authorities, one of the first things that happens is that the tourism budget gets squeezed, because all sorts of other things appear to be more important. In my view, the public sector needs to do what it can do, such as attending to infrastructure—in Whitley Bay we have schools that are among the best in the country, which I must mention to counter what has been said about educational provision in some seaside towns—and the private sector must be encouraged to do what it can. I commend the excellent small businesses along Park View in Whitley Bay, which have got on with things—in partnership with the local authority, and, indeed, in wider partnerships.
I want to ask the Minister about two things. First, the Conservatives said in opposition—and I presume that what they said has been translated into the coalition document—that they believed that community asset transfer was an important part of regeneration, in particular for seaside towns. I think that it was part of their seaside town policy. Is that still Government policy? What will happen, for example, if a local authority is reluctant to go down that route? Will central Government give it a push in one way or another? I commend the fantastic work that Culture Quarter is trying to do in Whitley Bay; but it is very frustrated sometimes by lack of support from the local authority.
Finally, does the Minister agree with the hon. Member for Boston and Skegness about the importance of the environment? The hon. Gentleman took a view about green and wind farm technology along the north bank of the Tyne, which could create thousands of jobs; would the Minister prefer that to the old industries such as, for example, dismantling ships, which have a huge environmental impact, and in the case in question are only a few miles from seaside villages and towns that we hope are in for a very good summer?
Mr David Amess (in the Chair)
Order. It is very unfortunate that six colleagues still wish to speak but there is not enough time for them all to do so; I understand that they have made the effort to be here. We have only three minutes before the winding-up speeches, and I am told that we have not heard from the south-west, so I shall call the hon. Member for St Austell and Newquay (Stephen Gilbert). If other hon. Members are minded to intervene on the Minister, perhaps he will allow it.
Stephen Gilbert (St Austell and Newquay) (LD)
It is a pleasure to take part in the debate and I congratulate my hon. Friend the Member for Boston and Skegness (Mark Simmonds) on securing it. I shall be very quick, as time is pressing.
There are two issues that I hope the Minister will address affecting people in Newquay, which is part of the new constituency that I am so proud to represent. The first is licensing policy. It seems that, as our seaside towns have changed from family destinations to places where younger people go to enjoy themselves perhaps a little too much on some weekends, the licensing regime has not kept up with the speed at which businesses can open, shut and reopen, often flouting the decisions that local authorities make when they finally get round to intervening. In particular I am thinking of the requirement not to solicit objections to bars, nightclubs and, indeed, lap-dancing clubs. It is a bizarre incongruity that in the planning context the local authority can seek people’s views, but in the licensing context it cannot.
Finally—I hope another hon. Member may have a minute or two in which to speak—I want to mention the issue of resourcing following footfall. My hon. Friend made the point that in Blackpool, 18,000 people go to the health care centre, but there is no additional funding. The population of Newquay goes from 20,000 in the winter months to 120,000 in summer, but there is no extra resourcing for policing. That gives rise to a question about how we sustain proper local services in periods of additional population pressure.
Mr Gordon Marsden (Blackpool South) (Lab)
I congratulate the hon. Member for Boston and Skegness (Mark Simmonds) most warmly on securing this debate on a subject in which, as a seaside Member, he has a long-standing interest. Although he was too modest to acknowledge it, he was the author or instigator of “No longer the end of the line”, which was mentioned earlier.
I declare several interests. Apart from speaking for the Opposition on the subject, I have a long-standing interest in coastal towns; I was carted off to Blackpool at an early age and saw some of the amusement arcades, about which some have waxed eloquently. When I was first elected to the House in 1997, I saw the need on the Labour Benches to establish a Back-Bench group of seaside and coastal MPs. Lastly, I had the pleasure recently, as the honorary president of the British Resorts and Destinations Association, of visiting the constituency of the hon. Member for Boston and Skegness, when the association held its annual conference at Butlins. I was delighted to see that Butlins is as thriving as it was when I first went there 40 years ago.
Coastal towns face a broad range of challenges. I call them challenges because that is what they are; it is not a negative term, nor is it necessarily positive, but it encapsulates some of the points touched on by the hon. Member for Blackpool North and Cleveleys (Paul Maynard). We know the challenges. In defence of everything done by the Labour Government, I have to say that when my hon. Friend the Member for Tynemouth (Mr Campbell) and I and many others who represent seaside and coastal towns were first elected in 1997, it was after a long period of neglect by our predecessors of the particular problems of seaside and coastal towns. We felt—it is clear from everything that has been said today that new Members feel the same—that a strong and specific light should be shone on the whole question and on the particular problems of seaside and coastal towns.
A light has been shone in recent years on rural areas, on coalfield areas and on inner-city areas. It needs also to be shone on seaside and coastal towns, not least because of what I would describe as the pepper-pot deprivation that they suffer. It is really important that the matter is considered by Ministers across Government. As others have rightly said, it is not a challenge that can be dealt with by only one Department; it has to be dealt with across Departments. That is why the points made by the hon. Member for Southport (Dr Pugh) and others about cross-departmental committees are so important.
A difficult double message needs to be put across in relation to seaside and coastal towns, and Members have touched on the dilemma. We need to discuss their specific problems—for example, deprivation in some of the inner wards of my constituency and, indeed, that of the hon. Member for South Thanet (Laura Sandys), is as strong if not stronger than in some inner-city areas, but that is often masked by grant procedures and formulae because of the larger areas covered by the latter. The Labour Government began to get to grips with the problem, but it was hell for civil servants. No doubt they gritted their teeth when dealing with the minutiae, but they got to grips with the procedures and formulae by considering smaller areas such as sub-ward areas. That was crucial.
The difficult double message is that although seaside and coastal towns have specific problems, they are also worthwhile places. As the Fothergill report shows, they have generated increases in tourism employment over the past few years despite those problems. Those points need to be put across strongly, but it is also a question of seeing seaside and coastal towns in the round. I know from my experience of Blackpool that people too often thought that not enough was being done for the residents, or that not enough was being done for tourism businesses. The truth of the matter is that if seaside and coastal towns are to flourish, things need to be done for both; and what is done for residents and for tourists must be integrated. After all, if residents do not feel good about their town, what sort of welcome will they give the tourists, and how will the tourists feel about it? There are big and important questions when it comes to not having silos and working across Government.
If I have a critique of “No longer the end of the line”, produced by the hon. Member for Boston and Skegness, it is that the document is often too generic—or too Pavlovian—in some of the reactions to Government intervention. When producing his report, the hon. Gentleman made a lengthy coastal tour, which was a good thing. In it, he speaks of Blackpool’s contribution to regeneration with the construction of the Spanish steps, but where did that money come from? I can tell the House that it came from the RDAs, the Sea Change programme and other Government initiatives. We should keep that in mind.
A lot has been said about the so-called neglect of the previous Government, although the hon. Member for Southport was good enough to acknowledge that the Sea Change programme was taken up by them. Indeed, I was pleased to play a part in persuading my right hon. Friend the Member for Barking (Margaret Hodge), then Minister for Culture and Tourism, to put the programme in place. Members are right to pass the question back to the Government, because in our “Strategy for seaside success” document, published in March 2010, we specifically mentioned the importance of continuing Sea Change or something of that nature. It has been an enormously important pump primer.
It is said that the sun often shines in seaside towns, and we did start to fix the roof in seaside towns while the sun was shining. In our March 2010 report, we say that the Northwest Regional Development Agency had invested more than £200 million in coastal towns, and that the Heritage Lottery Fund had given £234 million to 864 projects in English coastal resorts since 1997. Money came also from the working neighbourhood fund and the new deal for communities. In that document, we made a series of proposals, including new licensing rules, focusing on stronger co-operation, extending Sea Change and focusing on the new low-carbon economy.
None of those issues are party political; they have to be faced by civil servants, policy makers and Governments. The present Government need to do that, but they will not do it well if they start with cuts—a point made by the hon. Member for Beverley and Holderness (Mr Stuart) and touched on by the hon. Member for Boston and Skegness—especially if seaside and coastal towns get double hits in the cuts compared with other areas. The Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill), was candid enough to admit that those with the greatest problems were now getting the greatest hit in terms of the funding streams to seaside and coastal towns. That is not something that seaside and coastal towns want to hear, nor should they.
I return to the general comments made today by those on both sides of the Chamber. We heard some good and useful contributions and everyone focused on community involvement. However, that needs pump-priming; it needs things to be done. I have some wonderful community activities in my constituency. Donna’s Dream House is amazing; it was set up for terminally ill children and is known countrywide. The Royal British Legion has its poppy song. However, it is a fallacy to say that such activities do not need pump-priming or some Government support. For example, if we do not have efficient, accurate and specific Government intervention on such things as HMOs—in March, the previous Government proposed good legislation on HMOs, which the present Government should consider—we will not get the results that are needed. If we are to have a big society, voluntary and charitable organisations will need a leg up in seaside and coastal towns, and not a pummelling down from local government or the Treasury through funding cuts.
There are new ideas for the Government to consider. Some were put forward by the previous Government, particularly those to do with Total Place. I would like the Government take up what was said about the funding of seaside and coastal towns but also to consider the specific points made this morning about Sea Change and the other measures needed to ensure that community cohesion in those places continues, and to improve on what was done under the previous Government.
The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)
It is good to serve under your chairmanship, Mr Amess. Thank you very much for inviting colleagues to intervene; I very much appreciated that invitation.
I thank my hon. Friend the Member for Boston and Skegness (Mark Simmonds) for bringing this subject to the Chamber. The fact that 10 Members have contributed to the debate and another six would have liked to is an indication of its importance. My hon. Friend tried to hide his light under a bushel, but failed because several hon. Members shook that bushel. He was, of course, the author of “No longer the end of the line” and has been a vigorous exponent of his cause for a long while. I thank him for that and for the eloquence of his contribution today. I shall do my best to answer the questions put by him and other hon. Members, but I will have to keep an eye on the time and be mindful of possible interventions.
As several hon. Members said, we should not talk down either the continuing appeal of our seaside towns or their potential. Anecdotes were related during the debate, but objective evidence was provided by Sheffield Hallam university, with the support of the Department for Communities and Local Government, which showed that coastal and seaside areas still have a very strong appeal and great potential for the future. That report, which was published last month, found that our seaside tourist industry is alive and well and continuing to grow. I will not repeat the figures that were given in the debate because we are running short of time. Let me make it clear, though, that the coalition Government recognise that coastal and seaside towns face many real problems. They all have unique histories and often differ widely in their economic, social and physical situations and indeed in their history and reputation. None the less, they face some common challenges, which include poor transport links, a dependence on low-wage and low-skill jobs, high levels of benefit claimants, low educational attainment—there is a mixed view on that, but it is a serious problem in some places—and shared private rented housing.
The Government believe that such challenges are best tackled through local solutions. In response to the hon. Member for Blackpool South (Mr Marsden), I am not talking about completely turning off the tap. The point at issue here is who decides how the money is spent. After considering example after example, we are clear that local areas need to be free to determine their own future. They need to be freed from central Government direction and regulation. Let me pick up on two points that were made in respect of that matter. The new Government will give each local authority the capacity to have its personalised approach to HMOs, rather than a blanket central prescription. That is the way to target what needs to be done without imposing burdens on those who do not need them.
My hon. Friend the Member for Redcar (Ian Swales) mentioned the planning system and the way in which it might result in projects being imposed on an area. We are devolving the planning framework to local authorities, so that they can establish their local plans and have the freedom to take those decisions. We are putting power into the hands of local people and local communities, which is very much at the heart of the big society.
Martin Vickers (Cleethorpes) (Con)
I accept what the Minister says about intervention and passing down power to local authorities. Will he also tell us about the powers that local authorities have in relation to Government agencies, such as the Environment Agency and Natural England, whereby they are mandated to do something, rather than given advice?
Andrew Stunell
We are, of course, having a cull of quangos. I cannot answer the hon. Gentleman’s specific point, but if he wants to draw my attention to particularly unhelpful prescriptive measures being imposed on his local area, I would be very happy to hear from him.
That leads me nicely on to the fact that we are publishing, probably in December, the localism Bill, which will devolve greater powers to councils and to neighbourhoods so that local communities can shape their own future. We want to give local communities, including those on the coast, the tools and incentives to support business growth and to create an enterprise culture. We recognise that coastal towns have unique challenges and that they need locally tailored solutions. It would be a mistake for us to say, “Here is the guide book that will apply equally to all the resorts in Britain.” That is why we are inviting local authorities and business leaders to come together to form local enterprise partnerships to replace the existing regional development agencies. The Secretaries of State for the Departments for Communities and Local Government and for Business, Innovation and Skills have already written to local councils and business leaders inviting them to come forward with proposals. I know that a number of coastal local authorities are already considering proposals that would take them into local enterprise partnerships. The list with which I have been provided includes the Fylde coast in Lancashire, which may or may not include Fleetwood—incidentally, I will not be trying whelks any time soon, given what has been said—Bournemouth, Poole and Dorset and Portsmouth, Southampton and Hampshire. I am sure that others will be doing the same. Those local enterprise partnerships will empower groups of councils and businesses working together to provide the strategic leadership that their areas need to set out local economic priorities.
Dr Pugh
As much as I subscribe to the doctrine of localism, there is a degree of pump priming needed. Most local authorities carry huge deadweight costs—if I can put it like that—because of their social services budget, and have little financial freedom to carry out some of the big infrastructure projects that are very much part and parcel of regeneration. That specific problem does not seem to be directly solved by the localism agenda.
Andrew Stunell
My hon. Friend anticipates the next paragraph of my speech, which talks about the £1 billion regional growth fund. I do not know how we do that, but there must be some kind of electricity between us. The Government intend to ensure that local areas have the capacity to deliver on their priorities. We are taking away the walls or barriers between the different funding streams that local authorities receive so that they can set their own priorities. I was astonished to find that there were 115 different income streams launched from my Department to local authorities. We are trying to break down those walls, so that the money that arrives in the vaults at the town hall can be spent in the way that the elected representatives at the town hall believe is best.
A number of other points were made, but let me reassure all hon. Members that we intend to maintain the existing co-operation between Departments and I shall look hard to see what opportunities there are to strengthen it, and the Minister with responsibility for tourism will, I am sure, do the same. We will retain the concept of drawing together all the different public service funding streams in an area, and ensure that we get the maximum value out of them.
The hon. Member for Tynemouth (Mr Campbell) spoke about community asset transfer, and we are keen to ensure that such capacity is there for voluntary and community groups. I believe that the localism Bill will contain specific provisions that open the door to that.
I am looking at the time; I do not have very long and I have not answered all the questions. If hon. Members want to reinforce their points by writing to me or getting in touch with me, please do so and I will do my best to give informative answers.
If we are to ensure that coastal towns have the resilience that they will need in the tough economic times that lie ahead, they must diversify their economies and widen their economic bases. That means attracting a range of employers offering jobs at different skill levels and in new sectors. We need to ensure that coastal towns become more attractive places for people of working age, so that not everybody thinks that people are only born in such towns or die there; we must show that there is something to do in between times. That is an important part of the economic thinking of coastal towns—
University Funding (Yorkshire)
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Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
Mr Amess, Huddersfield is not a coastal town, as you might have noticed, but I am very fond of all things Whitby and Broadstairs. So that is a declaration of interest in the subject of the last debate.
This is the first Westminster Hall debate I have secured in the new Parliament and I do not apologise for returning to a subject that is absolutely crucial to all our regions. I say “all our regions”, but I remember the Chancellor’s recent speech, in which he said:
“Between 1998 and 2008, for every private sector job generated in the north and the midlands, 10 were created in London and the south.”—[Official Report, 22 June 2010; Vol. 512, c. 176.]
In so many ways, we are two countries. We are, first, a country of the regions outside London and the south; and secondly, a country of London and the south. I understand that when the future of the regional development agencies was being discussed, it seemed that London, the south-east and the south-west would lose the particular focus that had been put on them. Is it not true that we must address the imbalance between the regions in terms of employment and innovation?
Many years ago, when Sir Keith Joseph became the Secretary of State for Education he gave a reading list to all his civil servants and junior Ministers. My approach in my speech today will be rather like that. Furthermore, I would like anyone who takes note of this debate to appreciate that Yorkshire and Humber is a microcosm of all the regions: the problems that Yorkshire and Humber has are similar to those that all the regions outside London and the south-east have.
I would like to refer everyone to the recent reports from the National Endowment for Science, Technology and the Arts and the ERA Foundation about the productive capacity of our country and innovation. In particular, the NESTA report sets out four scenarios for the future of Britain’s productive capacity, which go to the very heart of the concerns I am expressing today about the funding of universities. In doing so, the report is concerned with how we will make a living and achieve a good standard of life for the citizens of this country.
The first scenario that the NESTA report sets out is that we carry on doing more of what we are already doing—we carry on as we are. However, all the testing that NESTA has done of that scenario shows that it will not work; it will not increase productivity and jobs or get the economy moving again. The second scenario is that we invest entirely in and focus completely on a rebirth of manufacturing. Although that scenario is not entirely discounted, it is certainly not seen as an overall answer to the question of how we can re-energise our productive capacity.
The NESTA report focuses on the third and fourth scenarios for the future. They involve changing the whole nature of our economy, turning it into an innovative one in which we seriously apply innovation to all its sectors. On reading the NESTA report, time and again we find that the real agent for delivering such change is our universities, and that if we do not use them to take a lead and innovate, we will not achieve the increase in productive capacity that we must achieve if our constituents are to have “the good life”.
The ERA Foundation report is also interesting. Many people do not know this, but the royal commission for the great exhibition of 1851 made so much money that Prince Albert was able to invest in buying most of Kensington. Imperial college, the Victoria and Albert Museum and other such institutions are built on that land, and they have the freehold and receive the rents. Through the ERA Foundation, they provide a lot of money—between £60 million and £80 million, I think—for research into productive capacity, manufacturing and much else.
The ERA Foundation report, which came out at about the same time as the recent NESTA report, puts more emphasis on manufacturing than the NESTA report does, but like the latter it says that manufacturing must be highly innovative. Indeed, it says that manufacturing must be led by innovation and by small and productive new enterprises. Again, universities figure prominently in improving our capacity to deliver. So when I talk today about the particular challenges in Yorkshire, I am actually talking about something that is good for our whole country—investing in higher education.
The data show that we invest about 5% of GDP in education. That figure is a little higher than the average for OECD countries but it is not the highest—I think the average is about 4.6%—so we should not get carried away. Even with all the work and investment in education that has gone on during the last 13 years, we have still not become the OECD or world leader in investing in education.
I used to chair the Education Committee, or whatever else it was called during the 10 years I chaired it, and time and again we looked at the increase in per capita spend on education. Of course, the great fashion—it was also absolutely the right fashion, in that it was an evidence-based policy—has been to invest in early years education: education of the youngest age group through to school-age. Later on in the age range, one sees that investment in higher education has been less than in education generally.
Higher education has therefore been fighting to do more with less for a long time, and people must bear that in mind. Those who campaigned against what the Labour Government called “variable fees” and what the then Opposition called “top-up fees” should bear it in mind that the reason why I was always totally in favour of top-up fees and why the Committee eventually came out in favour of them was that we could not see any other way of getting a high level of investment in university teaching and research salaries. Indeed, Mr Amess, if you look at the figures you will see that nearly all the money that has been raised from the top-up fees fund—whereby people make a payment towards their fees, capped at £3,000—has gone into the salaries of researchers and lecturers. British universities have been greatly blessed by having that ability to pay a decent wage, so that they can attract and retain the top talent.
Mr Amess, I want to refer you and everyone else here to three other pieces of reading. The first is the recent speech on higher education by the Secretary of State for Business, Innovation and Skills; the second is a speech by Professor Malcolm Grant, the president and provost of University college London; and the third is an article by Professor Steve Smith, the president of Universities UK. I hope that people will read those speeches and articles and balance them against each other. The Secretary of State made a good and balanced speech, saying that we must do even more with less. He also indicated that there were certain ways in which we can raise funding and he spoke about how that funding is retained—or not retained—in universities.
Alec Shelbrooke (Elmet and Rothwell) (Con)
I should first declare that I worked for Leeds university for 11 years and did a lot of work on open innovation in conjunction with other Yorkshire universities. I examined a lot of research on universities, which I will elaborate on later if the hon. Gentleman gives way again.
Sometimes, the debate is about whether some universities should be privatised, but in fact, only 3.6% of the income of the American Ivy league universities comes from the private sector, and British universities already receive 2.8% of their income from the private sector. Having listened to the hon. Gentleman’s arguments about university funding, I just want to say that privatisation of universities is not the route to go down.
Mr Sheerman
I will certainly not be advocating the privatisation of universities in my speech. Some privatisation has taken place already. The university of Buckingham was much vaunted and much publicised, but what does it do? It specialises in the easy stuff—training lawyers and accountants. At the moment, all the private sector seems to be choosing the easy, soft stuff on the margin. I have certainly not seen anyone come forward and say, “We’re going to start a proper university that teaches the tough, expensive subjects.” I agree with the hon. Gentleman.
The Secretary of State’s speech was good, but it failed to address innovation, universities’ role in leading it and recent partnerships between universities and the private sector—partnerships with small and medium-sized enterprises, with manufacturing and with the service sector, which employs 57% of the people in my constituency. Only 10% now work in manufacturing; 33% work in health, education and the local authority. Universities have good partnerships with SMEs country-wide and, interestingly, worldwide. Universities working in partnership have a role to play. The Secretary of State underrates their key role in future investment in this country. This is my most serious point: if we are going to haul our country properly into the 21st century and compete with the productivity of Germany, France and emerging countries such as India and China, we must use our universities in a way that we have not done in the past.
This is not the time to cut back; this is the time to invest in universities and to increase the money flowing into them. I have talked to all the universities in Yorkshire. A 25% cut will mean tremendous staffing cuts. One leading university in a major city told me that it will mean cutting 1,000 jobs in the city. A university in the next largest city—hon. Members can guess from the size which cities I am talking about—says that it will lose 600 jobs. Those figures are from one university; both cities have two universities. The 25% cut in the higher education sector may not be a disaster in the short term—perhaps we will be able to live with it for a while—but it will have enormous long-term effects on our industrial future.
I will not speak for too long, as I want to give the Minister a chance to respond. Yorkshire’s universities boost the region’s economy by £3.68 billion and play a critical role in generating jobs, creating innovation and driving enterprise. They are the most important source of innovation and partnership in the regions. That is recognised across parties; I am not making a narrow party political point. We are discussing a potential decision arising from the present state of the economy.
It does no one any good to exaggerate the state of the UK economy. I refer people to a recent article by Sam Brittan, a known Conservative, the brother of a well-known Conservative politician and a supporter of the coalition. He says that it does nobody any good to exaggerate how bad the UK economy is, and shows carefully that the exaggerations are not true. We have gone through an international meltdown of financial services and a world recession, but Britain has not come out as badly as people think.
I know that the coalition Government like to exaggerate, because that is what all new groups do when they take over. They say, “We’ve looked at the books, and it’s so bad we’ve got to take draconian measures.” That does not help anybody. We must take a realistic view of what we can and cannot afford. I could make myself unpopular outside this room by saying this, but if I were seeking to reduce overall expenditure, I would cut other areas that are perhaps more sensitive in the public imagination—health, education and other Departments—long before cutting into the potential of our productive sectors and our capacity to grow through the higher education system.
We have two countries, as I said. To make things more dramatic, I return to the provost of University college London. Unfortunately, he echoed quite a deplorable comment made in a speech by an Education Minister in the present Government who was a good member of my Select Committee. That Minister said that he would prefer an Oxbridge graduate with no teacher training qualification over someone from a rubbish university with a postgraduate certificate in education. I thought that that was a terrible remark. Malcolm Grant fell into the same trap, saying that research money to rich universities should not be cut and that he would rather see “pile ’em high and sell ’em cheap” universities go to the wall.
Malcolm Grant should visit the university of Huddersfield, which is a cracking good, innovative university. We do not pile ’em high and sell ’em cheap; we emphasise quality. Recently, I went to an end-of-year exhibition by our design students that ranged from high fashion right across to automotive design. People graduating from that university are snapped up all over the world for their talent. I have here a document announcing a new programme in Huddersfield: “Towards an alternative nuclear future: Capturing thorium-fuelled ADSR energy technology for Britain”.
I say to the provost of University college London that there are nine universities in Yorkshire and 43 in London. If I were considering the economic regeneration of the regions, I know what I would do if cuts had to be made. I do not want to cut anyone’s money; I do not want to close universities serving communities in the most challenged parts of London. However, if push came to shove, I would move 10 of those universities to other places in the country. That would ease congestion in London and make a real difference to some towns that do not have the privilege of a higher education institution.
The universities sit at the centre of what I call my big society. When I go back to my constituency, what is the centre of my big Huddersfield? It is the university. The university employs the biggest and most talented group of people, a lot of whom are well paid. Many live locally and are leaders in the town’s civic pride. That is important to a big society. Also, they are often close to the third sector. I have been a social enterpriser all my life—I am told that I have started about 48 different social enterprises—but we in the third sector are in danger. Despite what the coalition Government have said about being in favour of the third sector, it is going out of business rapidly. The people who used to fund social enterprises and the third sector have either been abolished or think they are in danger of being abolished, and the funding used by social enterprises is unavailable. Many of them are going out of business or battening down the hatches until we find out what the alternatives are to the funding we have become used to.
We need to be a highly innovative nation and to invest in higher education. There ought to be someone—I hate to use the word “tsar”—who is responsible for innovation in every university campus. They should report directly to the Secretary of State on how much innovation there is, how successful it is, and what partnerships there are. I approve of all that. There needs to be new ways of doing things more efficiently and effectively, and of using resources better. I believe in all that, but for the future of our country, our regions and Yorkshire we must move steadily and steadfastly. We must invest in higher education, in innovation and in our future.
The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)
I congratulate the hon. Member for Huddersfield (Mr Sheerman) on securing the debate. In the last Parliament, as Chair of the Select Committee on Children, Schools and Families, he was a very authoritative voice on all aspects of education and he brings that knowledge and skill to today’s debate. I am very sorry that my right hon. Friend the Minister for Universities and Science is not here, but as I am sure the hon. Gentleman is aware, he is attending the Select Committee on Business and Enterprise. My right hon. Friend sends his apologies—I am very much a stand-in.
The hon. Gentleman is passionate and knowledgeable about this subject and he has shown that today. I thank him for the role he plays in partnership with Kingston university in my constituency. He is a trustee of the Rose theatre in Kingston, which has a partnership role with the local authority, local business and Kingston university in relation to creative arts. That is the sort of partnership he was talking about during his speech.
Mr Davey
The hon. Gentleman is also an honorary doctor. I should put it on the record that I am an honorary fellow of Birkbeck college, London, which is showing the way in how we can be more innovative in the higher education sector. I was interested to note that he referred us to Sir Keith Joseph’s reading list. I am not sure if he wanted us to read the books on that list—probably not; I think he was creating his own reading list. I was delighted that he included a mention of the recent speech made by my right hon. Friend the Secretary of State for Business, Innovation and Skills. He was generous enough to say that it was a good and balanced speech, although he made the point that it did not mention innovation, which was the main focus of his speech today.
I reassure the hon. Gentleman that the Government are keen to do what they can to promote innovation. We share his desire to ensure that higher education institutions in Yorkshire and, indeed, across the country are able to maintain their reputation for world-class research, which has been one of Great Britain’s key comparative advantages in recent decades. Although there will be some tough decisions to make, we are determined that when we make them, we will not put that huge reputation and the benefits that the wider economy gets from the work of our great universities at risk.
Alec Shelbrooke
On the point about innovation, something to which the hon. Member for Huddersfield (Mr Sheerman) did not refer—or he may have done in part—is that when universities in the Yorkshire region come together, they have an outstanding opportunity to be the leading nanotechnology specialists in the world. Indeed, York university has one of only four machines in the world that can photograph molecules down to that level and see them lined up, and Huddersfield university has one of the most precise measuring instruments in the world.
Overall, innovation is part of the bread and butter of universities. Will the Minister give some thought to how he can free up universities to enable them to capitalise on the intellectual property that they develop? At the moment, they struggle to do so because their charity status means they are unable to make a profit. If they did, they would be hit by VAT, which would be bad for them. If we can change some of the rules that they play by, a huge income stream would be available to universities, which would bring into universities the investment that we all want to see.
Mr Davey
I am sure that my right hon. Friend the Minister for Universities and Science will want to reflect on those remarks, because we will be searching for new revenue streams. It is incumbent on this Government to do so as we make some difficult decisions about public funding. The hon. Gentleman’s comment is therefore very helpful. The university of Huddersfield is exceedingly expert in that area and has a unique nano-lab facility. As he was saying, that shows the great research facilities that are in the Yorkshire higher education institutions and how they benefit when they work together either across Yorkshire or, indeed, in the N8 group more broadly across the north.
Mr Sheerman
Yorkshire ranks No. 1 in all the regions in terms of attracting inward investment—£28 million a year—for new start-up businesses.
Mr Davey
I understand that. It is one of the reasons why I wanted to say to the hon. Gentleman that, although there will be a difficult funding climate—as colleagues are well aware—it is worth putting it on the record that Yorkshire universities tend to fare reasonably well compared with their counterparts in other parts of the country. That is in no small part due to their strong research performance. Yorkshire universities receive a level of research funding per higher education institution that is above the UK average, and two of its institutions are among the 20 that receive the most research funding in the United Kingdom. He is absolutely right. The Government are keen to ensure that they can build on that success.
The higher education sector is a success story for Yorkshire. The university of Huddersfield in the hon. Gentleman’s constituency illustrates what Yorkshire universities can achieve. I have mentioned the nano-lab, but the cutting edge Centre for Precision Technologies is also showing what Yorkshire universities can do for precision engineering. Huddersfield university has other areas of expertise, including automotive engineering, motor sport, computer games, electronic and electrical engineering, and multi-media and music technologies. Kingston university in my constituency also has many areas of expertise in engineering. Given Kingston’s past, those are particularly related to the aeronautical industries. I share his commitment to ensuring that universities are able to develop the innovative capacity they have shown in the past. Despite the problems that will arise over the next few years in ensuring the funding is fair, we must ensure that such a capacity to innovate is not lost, as it can play its part in reducing the public sector deficit.
The hon. Gentleman said that we should not talk down the state of the British economy. There is no desire to talk the economy down, but there is a desire to deal with the huge challenges we face—a public sector deficit that is 11% of GDP, and the highest public sector deficit within the OECD. The Government cannot sit by and do nothing. I am sure he will admit—he is such a reasonable person and is very knowledgeable—that the previous Government were considering some significant reductions in funding in this area for this year. If anything, compared with the grant letter of December last year, this Government are putting more money into HE this year for the 10,000 places, which has led to some debate. The previous Government were planning £600 million of spending reductions to take place in future years. On financing the HE sector, this Government have not uniquely decided that they want to consider reducing spending; they are taking on the previous Government’s proposals.
Mr Sheerman
I am sure that the Minister’s officials will have looked at the speech I made in this Chamber in January, in which I complained about the previous Government’s cut to university funding. So I agree with him on that. However, what does he think our competitors are thinking? Higher education is the one sector in which we are the world leaders—we compete with the Americans, the Australians and the Canadians—but suddenly we are going to start cutting it by 25%. That is what he is predicting—25%.
Mr Davey
I am glad to see that the hon. Gentleman is claiming consistency in that he says that he criticised the previous Government for their spending cut proposals. We share his vision of the crucial role that universities and innovation play in our economy, the productive sectors and so on. There is no dispute in that area, but there is a dispute about the role that the university sector must play in facing up to the immediate public finance problems facing the country.
I apologise to the hon. Gentleman because I am running out of time. I shall conclude by saying that there are no easy solutions to the challenges that this country—this Government—faces on public spending. We should not run away from those challenges, because it will be in the long-term interests of our university sector if we face up to them. With the help of Lord Browne’s review, which will conclude in the autumn, we will have the knowledge base and understanding to put forward a fair and equitable settlement. Such a settlement will ensure that our universities have sustainable funding and that access to universities is not undermined.
Equitable Life
(13 years, 9 months ago)
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Nicola Blackwood (Oxford West and Abingdon) (Con)
I am grateful for the opportunity to debate Equitable Life. As a parliamentary candidate, along with many others from all parties, I signed a public pledge to support and vote for proper compensation for the victims of the Equitable Life scandal and the setting up of a swift, simple, transparent and fair payment scheme, independent of Government, as recommended by the parliamentary ombudsman. I am here today, along with many concerned colleagues, because, with the Chadwick report due imminently, I wanted to give the Minister an opportunity to hear the views of parliamentary colleagues and Members an opportunity to raise the concerns that have been brought to them since the election.
I must confess that I spent much of Sunday watching the Opposition day debate from 17 March on Parliament TV—although that may raise doubts about my sanity, it was very reassuring. The Minister showed a real understanding of the appalling injustice that has been suffered by Equitable members. According to the Equitable Members Action Group—EMAG—more than 1,000 policyholders and 2,000 group scheme members live in my constituency. He understood the anger felt at the previous Government’s delaying tactics. Most importantly, he was clear in committing a future Conservative Government to implementing an effective compensation scheme in a timely manner. I am pleased that that commitment has been restated in the coalition programme.
Nevertheless, concerns have been raised with me and my colleagues since the election. As many of us are new Members who did not have the chance to contribute to the most recent debate on the matter, I know that the Minister will appreciate the opportunity to hear their views as he considers the Treasury response to the Chadwick report and decides on future plans for a payment scheme.
I am not inclined to give a summary of the Labour Government’s attempts to avoid the findings of the Penrose inquiry and hobble the ombudsman in her first inquiry, only to refuse to accept her conclusions of maladministration and injustice in her second inquiry and the subsequent judicial review, which determined that much of their refusal failed the cogency test. I am sure that all Members present are familiar with that sorry saga; if they are not, there is an excellent Commons Library standard note on the matter, which they can peruse at their leisure. Suffice it to say that the Minister has been left with a scandalous legacy by his predecessor, and one that I would not wish on my worst enemy.
I will focus on some of the main barriers to progress that we face. The first barrier is that Equitable members have had all their faith in Government systematically destroyed by the transparent attempts by the previous Administration to delay and obfuscate—one of the few instances of transparency they can boast. The accusation that the Treasury made the cold-hearted calculation that the longer the process took, the less it would have to pay out, as Equitable members were dying off at such a rate, has never been verified. Nevertheless, the accusation sits uncomfortably in the middle of the negotiating room, making it difficult to build a constructive relationship when attempting to create a scheme that Equitable members can support.
Together we will have to find a way to build that relationship, however painful the process, and to start rebuilding trust, and I suspect that no amount of rhetoric will do the trick. The only way Equitable members will be able to move past the consistent abuse they suffered at the hands of the previous Government will be by seeing concrete action replace warm words. I urge the Minister to remember that history as he moves forward.
Many of us feel that, after our active championing of the cause of EMAG members when in opposition, they should feel that they can trust us. It is clear, however, that having suffered so much from Labour’s broken promises for so long, they now find it difficult to trust so easily. The only remedy for that distrust is to prove the doubter wrong by delivering in government what we promised in opposition. At the same time, Equitable members must meet us halfway by working in partnership with, rather than just in opposition to, the Government as we try to find a way to bring them justice.
Dr Sarah Wollaston (Totnes) (Con)
Another point is that so many Equitable Life members are very hard up. I have received letters from many constituents, and one couple I heard from are now surviving on pension credits and rent rebates after a lifetime’s savings were decimated by the Equitable Life scandal.
Nicola Blackwood
That is the message I receive in my post box day after day, and I am sure that many colleagues have similar cases.
The second problem we face is uncertainty. For decades, Equitable members have been treated with the utmost contempt by the management of Equitable Life, the regulators and, latterly, the Labour Government, who refused to give them clear answers, denied their claims of injustice, even in the face of all the evidence and, even after accepting some measure of responsibility, have consistently refused to give the victims any indication of the timetable or costing.
Sarah Newton (Truro and Falmouth) (Con)
Does my hon. Friend agree that, as we are determined to rebuild a savings culture, in addition to honouring our manifesto pledge, it is vital that people can invest in pensions with confidence, knowing that they will be compensated if those are mis-sold?
Nicola Blackwood
I agree entirely. A key concern during the general election campaign was the fear that the saving culture in this country, which for so long had been part of our economy, had been completely destroyed. We must do everything we can to avoid entrenching that destruction.
Mr Andrew Smith (Oxford East) (Lab)
The hon. Lady, who is my fellow Oxford Member, makes her case passionately and effectively. Is not the crucial point that we get a commitment to transparency and fairness, which is what EMAG has been calling for, and that it would therefore be helpful to hear from the Minister on how the coalition Government intend to change and enhance the remit that was given to Sir John Chadwick?
Nicola Blackwood
Transparency must clearly be at the heart of any process we now embark upon. As I have said, with trust at an all-time low, the only way we can ensure a process in which all partners can take part is by showing that we are not in some way trying to brush under the carpet some of the problems that the previous Government did.
Mr John Redwood (Wokingham) (Con)
My hon. Friend is making a strong case. Like her, I wish to see justice for the victims of the problem. Does she agree with me that it would be helpful if in the meantime all the work proceeds on cleaning up the records and ensuring that the lists, and therefore the potential eligibility by category, are in the best possible order so that my hon. Friend the Minister can make a speedy disposition of funds once he has made a decision?
Nicola Blackwood
My right hon. Friend makes an excellent point. With all the delays we have seen, the last thing we want is to come to an agreement on the terms of a payments scheme, only to have to embark on a lengthy period of making the data ready for that. It would be excellent to hear the Minister’s comments on that point.
On timetabling, it does not take much imagination to see how such long-term uncertainty would eat away at an Equitable member, causing as much damage as a shrinking pension. The Minister was vocal in calling for a clear timetable in his statement on 17 March, so I am sure that he will be able to offer a timetable today, or very shortly in a statement to the House.
The final problem I will mention is the deep suspicion with which EMAG members view the Chadwick process. Indeed, the fact that they pulled out of that process less than 24 hours before the most recent debate on the matter was noted, as was the fact that as a result the final Chadwick report might be subject to serious dispute, if not to judicial review proceedings, which will also delay proceeding.
The concerns they have raised include concerns about the assumption of the third interim report, which asserted that regulators should be assessed on the basis of the lowest common denominator, despite the fact that the High Court judgment in EMAG v. Her Majesty’s Government found that it was reasonable to assess injustice on the basis of not only strict legal liability, but the policyholder’s reasonable expectation of a regulator. During those court proceedings, the ombudsman expressed concern that the Chadwick process broke the link between injustice arising from maladministration and the provision of any remedy by limiting future payments to those who had been disproportionately affected. Also, among current EMAG members is a sense that, in our straitened economic times, the Chadwick report will find a way to underestimate the losses.
Mr Sam Gyimah (East Surrey) (Con)
Does my hon. Friend agree that addressing the loss, even in straitened times, is important? The Government ought to send out the signal that people who do the right thing should not be penalised, which is what has happened in the Equitable Life situation.
Nicola Blackwood
Yes, and that speaks to the earlier comments on the need to protect and enhance the saving culture and on sending the right message to people that they can put faith in how we regulate savings.
Could the Minister comment on two proposals that might address the concerns about the Chadwick process which EMAG has raised with all of us? First, the Chadwick report should not be the foundation of a payment scheme but, rather, one of the resources used in creating an independent payment scheme. Secondly, the final assessment of losses should accurately reflect the cost that Equitable Life members have borne.
Andrew Bingham (High Peak) (Con)
We have all received lots of letters from EMAG, as candidates and as Members of Parliament, but two things have not been mentioned today—the dependants of policyholders who are now deceased because there has been such delay, and the issue of not means-testing such people. Does my hon. Friend agree?
Nicola Blackwood
I believe that those issues were raised on 17 March and that there might have been a subsequent commitment. However, hearing the Minister’s confirmation would be helpful.
Two issues are at stake in the process. The first is purely financial.
Charlie Elphicke (Dover) (Con)
With respect, I add that Equitable Life victims in Dover are deeply concerned. I congratulate my hon. Friend on securing the debate and on her excellent argument.
Nicola Blackwood
The first of the two issues at stake is purely financial—the technical problems of designing a scheme that is fair, transparent, swift and simple. The second issue, which is almost more challenging, is ethical—the admission of responsibility by the Government for regulatory failures and the acknowledgement of what that failure has meant to Equitable Life members.
By failing to admit the full extent of the losses, we will fail on the latter issue, ethically, even if we succeed on the former, financially. I do not see any reason why we need to go down that route. All parties have consistently stated that final payments will have to be balanced against other calls on the public purse. The High Court stated that, as the Government were not required to create a compensation scheme, any legal objections to the nature of such a scheme were bound to fail, so there seems to be no legal barrier.
In my dealings with EMAG, representatives have clearly stated that they understand that full payment may well not be possible, but they want an acknowledgement, at least, from the Government of the full cost that they have shouldered.
Neil Carmichael (Stroud) (Con)
We all have big postbags on the subject, obviously. We need clear milestones for delivery. That is what most of my supporters in this connection want—milestones.
Nicola Blackwood
Along with the rest of the country, Equitable Life members know that we have been left to clear up Labour’s financial mess. All sections of society will have to do their bit in getting our national finances back on track. If we ask EMAG members to trust us, as their Government, we should trust them to accept that we might be able to pay back only a percentage of their losses. If we attempted to pay out in full, according to calculations that do not have the confidence of the public, we would do significant damage to our credibility for the long term.
The Equitable Life case is a prism of the wider legacy of the Labour Government: public distrust in politicians and Governments is at an all-time low, as a result not just of media-induced cynicism but of Labour’s chronic inability to deliver on its promises or to take responsibility for its mistakes. The case is one of our key tests, a barometer of how straightforward we will be in the face of the tough choices that we have spoken about so often.
I have the greatest confidence that the Government will be honest and open about the extent of the damage inflicted on Equitable Life members and of the capacity of the Government to remedy it. According to the Minister’s own words, he has the compassion to lose no time in setting out a detailed programme for that remedy, putting to an end the decades of injustice and uncertainty endured by hundreds of thousands of Equitable Life members.
The Financial Secretary to the Treasury (Mr Mark Hoban)
First, I congratulate my hon. Friend the Member for Oxford West and Abingdon (Nicola Blackwood) on securing the debate, the first in this Parliament on Equitable Life. I am certain it will not be the last such debate.
I want to respond to a couple of points made in interventions before returning to the main thrust of my remarks. My right hon. Friend the Member for Wokingham (Mr Redwood) asked about the quality and cleansing of the data. It is important to place on the record that there are 1.5 million policyholders holding 2 million policies, and that 30 million premium transactions have taken place over the period in question. The quality of data is a huge problem. I am grateful to EMAG for the offer of access to its database to help us cleanse the information. Equitable Life and others will be working with us to ensure the best-quality database. My right hon. Friend is absolutely right that such work needs to proceed in parallel with other work streams, so that we can make payments to policyholders as quickly as possible.
Reference was made to the importance of savings. The regulatory reforms that my right hon. Friend the Chancellor announced last month include the establishment of a consumer protection and markets agency, which will help to improve the regulation of our financial services, hopefully contributing along with other measures to rebuilding a savings culture in this country.
I did not need this afternoon’s debate to remind me of the importance of Equitable Life to so many of my colleagues, having received a number of letters, answered a number of written parliamentary questions and had a number of oral representations from colleagues about how important the matter is. I understand the strength of feeling, and I hope that, over the past four or five years in this role in opposition and now in government, I have come to be seen by policyholders as a strong advocate for ending the plight of those who have suffered as a consequence of Government maladministration. I want to see a swift response but, vitally, one that is transparent and fair to all policyholders and to the taxpayer.
Andrea Leadsom (South Northamptonshire) (Con)
Does my hon. Friend agree that the problem is that, because it has taken so long to get to the point we have reached today, we are in a worse position than if the situation had only recently occurred? Therefore, having promised to make good the damage left by Labour, we must put the matter to rest as quickly as possible—even quicker than in normal circumstances.
Mr Hoban
My hon. Friend makes an important point. The crisis has gone on for too long. Lord Penrose’s report was back in 2000, and the previous Government could have tackled the issue then. They blocked the ombudsman’s second inquiry into Equitable Life, and they took six months to respond to the ombudsman’s report. At every step in the process, the previous Government delayed. We want to make rapid progress, but fairly and transparently for policyholders and taxpayers.
In our coalition agreement we pledged to make fair and transparent payments, through an independently designed scheme, to policyholders for their relative loss as a consequence of regulatory failure. In the two months since we have been in office, we have made real progress and will continue to do so over the coming months. In May, in the Queen’s Speech, we announced an Equitable Life Bill, which will give the Treasury the statutory authority to incur expenditure in making payments to those who have suffered loss in connection with maladministration and the regulation of Equitable Life. The Bill will be introduced shortly and will be an important step towards resolving the issue.
Another important step will be the imminent publication of Sir John Chadwick’s final report on Equitable Life. It will give us a greater understanding of the losses that policyholders have suffered. Some have called for us to abandon the Chadwick process or to alter Sir John’s terms of reference. However, after careful consideration, I decided to allow Sir John to continue with his work under the current terms of reference. His work has been the culmination of almost 18 months of detailed analysis and evidence gathering. He and his actuaries have delved deeply into the issues, and their work has been informed by consultations with interested parties. For example, his flexible approach to establishing loss removes from policyholders the burden of proving what they would have done had they been aware of problems at Equitable Life. It is important to have his work available, as it will aid us in providing a swift response.
Gavin Barwell (Croydon Central) (Con)
The Minister certainly has the reputation with EMAG members that he mentioned earlier, but an issue of concern is the Government’s attitude to Chadwick. The Minister said that their response would be published imminently. Is there likely to be a statement before the summer recess?
George Hollingbery (Meon Valley) (Con)
Has the shape of the Minister’s thoughts on moving this issue forward changed from what he announced as the Conservative party’s plans in March?
Mr Hoban
My views have not changed in that period. An option one gets as a Minister is to drive the process forward further and faster, and to change the approach. What hon. Members will have seen over the past eight weeks, which will become clearer when Sir John’s report is published, is that we have adopted a much more transparent and open approach to the resolution of the problem.
As part of that transparency, I will publish with Sir John’s report the advice provided by his actuaries as well as correspondence he has received on the matter. In the light of the sensitivity of the issue, we must know how he developed his methodology and what has informed his thinking. To restore trust in the process, I want to be as open and transparent as possible about our approach and the losses suffered by policyholders. I believe that that is the best way to tackle the distrust that my hon. Friend the Member for Oxford West and Abingdon referred to in her speech.
Dan Rogerson (North Cornwall) (LD)
I am sure that people listening to this debate will be reassured by the approach that the coalition Government are taking, in contrast with that taken by the previous Government. Can the Minister confirm that, in taking into account what the Chadwick report says about the scale of the losses suffered by Equitable members, the coalition Government’s approach to how payments will be judged is new and not built on any of the previous Government’s work?
Mr Hoban
I will come on to the commission shortly, if Members will bear with me.
As I said, I want the process to be as open and transparent as possible. I have said to the House that when we publish Sir John’s report, I will provide a substantive update on the next steps in the process. We have already set out the important steps in how we will take the work forward, and some points about how the scheme will work.
My hon. Friend the Member for High Peak (Andrew Bingham) raised a couple of points in his intervention. I wish to make it clear that there should be no means-testing, and that the estates of deceased policyholders should be included in the scheme. We felt it important to clarify those two issues early on in order to settle some policyholders’ worries, and I am happy to reiterate those commitments today.
I will establish an independent commission that will advise on how best to allocate funds to policyholders and to help develop the scheme design. One of the key aspects of the ombudsman’s recommendations was that any scheme should be independent of Government, and I agree with the thinking behind that recommendation. The commission will be given a remit that will allow it truly to add value to the process.
The process will be time-consuming, and there is the potential that payments will be delayed if we ask the commission to start the process of determining relative loss from scratch. However, we want it to play a role in developing a fair outcome for all policyholders.
Amber Rudd (Hastings and Rye) (Con)
The Minister kindly mentioned how the funds will be paid out. In my constituency, a number of people are concerned that because it will take a long time to appoint the commission, which will then have to go through its own procedure, further delays could be added. Can he tell us how the commission will be put together and what his expectations are of the timing?
Mr Hoban
I am keen that the commission should work as quickly as possible. In many respects, the process would have been shorter without the commission, but it is an important guarantee of transparency and openness, and it is right that it be given a remit to do this work. Equally, I am mindful of the fact that we need to give it a tight timetable, so that it has time to think about the issues but is not seen as delaying the process of making payments to policyholders.
Bob Blackman (Harrow East) (Con)
One of the concerns is that, sadly, many policyholders have died or are dying. Can the Minister give some comfort on the issue of giving interim payments once the decision has been taken, so that people can receive payments before the commission has completed its work?
Mr Hoban
I am conscious of the fact that many policyholders are elderly, but there is a challenge: we need to ensure that the scheme is designed transparently and fairly, and that there is fairness between groups of policyholders as well as between policyholders and taxpayers. The commission should look at where priority payments should be made, but I am wary of the question of how we can make interim payments to people on a sound basis that will not lead to further problems later. I take on board my hon. Friend’s point, but there are some challenges in taking the idea forward.
A key issue for many policyholders and Members of Parliament is how much the scheme will cost. As the ombudsman said, it is appropriate to think about that, and we will consider the potential impact on the public purse of any scheme, and what is affordable, before we decide how much we can allocate to the scheme. We will ensure that fairness is at the forefront of our thinking when making those difficult decisions.
I would like to take a moment to mention the excellent work of EMAG, which has campaigned for many years for a fair resolution to the matter. In opposition and now in government, I have met members of the EMAG board, who have relayed to me their concerns about the Chadwick process. I will say to hon. Members what I said to them: Sir John is only a building block in our approach, and I am willing to listen to EMAG and other interested parties who can give useful and productive insight into this complex issue.
I remind hon. Members that no final decisions have yet been made on many of the important issues associated with the scheme. I want the decisions to be in the best interests of policyholders and taxpayers, and I encourage EMAG and others to be involved so that we can move the process on and find a resolution, for which policyholders have waited for many years.
I will give more details on our approach and the next steps in the process when Sir John Chadwick’s final report is published, but I can confidently say that we are moving towards our objective of resolving the issue. We are now reaching a crucial stage in the story of the Equitable Life payment scheme. What happens in the coming months will be decisive in laying out how the scheme operates and the quantum of payments that will be made to policyholders. I encourage all MPs to engage in the debate. This is certainly an issue that we must get right.
Ministry of Defence (Statistics)
(13 years, 9 months ago)
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Angus Robertson (Moray) (SNP)
I am pleased to have secured this debate on Ministry of Defence regional and national statistics, because as we speak the strategic defence and security review, which is looking at the shape and role of United Kingdom conventional defence policy, is under way in the MOD. Given the extreme financial constraints, we expect to learn about radical changes to the UK armed forces when the SDSR reports before the end of this year. The Royal United Services Institute expects a 20% reduction in manpower and a budget cut of between 10% and 15%. In that context, MOD statistics and facts relating to UK defence are key in informing the SDSR, as well as in holding the MOD and UK Government to account.
Although it is essential that the SDSR be driven by defence, foreign and security policy priorities, it must also be relevant to consider what defence footprint there has been and what there will be in the future. I fear that the SDSR will lead to large parts of the UK having no defence infrastructure, with fewer bases, reduced units and manpower, and severely imbalanced defence spending.
There are reasons to believe that Scotland, Wales, Northern Ireland and some English regions will come off worst. That worrying prospect is supported by past regional and defence statistics issued by the Ministry of Defence. In recent years, the MOD has confirmed that more than 10,000 defence jobs have been lost in Scotland and that there has been a defence underspend in excess of £5.6 billion. The defence underspend statistics for Wales and Northern Ireland in the same period are £6.7 billion and £1.8 billion respectively. No doubt, if the MOD provided regional breakdowns for the English regions those would show that other areas have also been badly disadvantaged.
Most shocking of all in an advanced modern democracy is that the UK Government have decided that, rather than explain the impact of their policies, manpower cuts and spending disparities, they will simply stop providing the statistics. I should point out that regional and national defence statistics are available in other countries. With a mouse click, one can access such information down to state level in the United States. In Canada, a nation with close parliamentary and military links to the UK, the Department of National Defence produces similar statistics, both at provincial and constituency level. Those and other countries think that it is right and proper to confirm their employment and spending decisions, and that clearly impacts on their policy thinking. Until recently, that was also the case in the UK, where the Ministry of Defence answered questions relating to regional defence employment and regional spending.
The MOD has confirmed that there are now 10,480 fewer people employed in defence jobs in Scotland than in 1997, which amounts to 1,880 fewer services personnel and 4,600 fewer civilian jobs in addition to the loss of 4,000 jobs that were supported by defence expenditure. Those are MOD statistics. That leaves the current uniformed contingent in Scotland roughly at around 11,000, which is less per head of population than the armed forces of the Irish Republic.
A series of parliamentary questions on defence spending has, until recently, been answered by the MOD making estimates of how much it has spent in each nation of the UK. That has been broken down by service personnel costs, civilian personnel costs, equipment expenditure and non-equipment expenditure, such as utilities and maintenance, and so on.
There is a complete MOD data set from 2002 to 2008 that shows a significant and widening structural defence underspend relative to population in Scotland: it has increased from £749 million in 2002-03 to £1.259 billion in 2007-08, which represents a 68% increase in six years. Between 2002 and 2008, the underspend in Scotland totalled a mammoth £5.6 billion. Between 2005 and 2008 there was a drastic real-terms decline year on year in the defence spending in Scotland: in total, the previous Labour Government slashed defence spending by £150 million in those years. There was a 3% cut in defence spending between 2006-07 and 2007-08 in Scotland. Those are MOD statistics. Widening the statistics to include Wales and Northern Ireland, in the six years from 2002 to 2008, there was an accumulated underspend of £14.2 billion. Looking at the overall trend, in Scotland and Wales in each of the past six years the underspend figure has gone up faster than the overall budget of the MoD, highlighting a situation that is getting progressively worse, squeezing each country more each year.
Although the MOD budget has not increased every year in real terms, figures on the percentage change from 2002 to 2008 show that its budget increased by 24%, but the underspend increased by more than 50%. In each of the past five years, the amount spent in Scotland, Wales and Northern Ireland combined has been less than the UK spends overseas. Money spent overseas does not include current operations, such as Afghanistan, and the like. For example, a larger contingent of troops is stationed in Germany than is based in Scotland, Wales and Northern Ireland combined.
These facts are shocking and they pose problems for the MOD to answer. Hansard shows that despite numerous attempts to get Ministers and Prime Ministers to explain the underspend and jobs cuts, no explanation has been forthcoming. Instead, the MOD hit on the novel idea of simply not answering the questions any more. In 2009, tucked away in a report, the MOD confirmed that:
“Ministers have agreed that after this year (2009) the Ministry of Defence (MOD) will no longer compile national and regional employment estimates because the data do not directly support MOD policy making and operations.”
On 6 April, the then Secretary of State for Defence provided what turned out to be the last parliamentary answer on defence expenditure in Scotland. He explained:
“Since 2008 the MOD has not collected estimates of regional expenditure on equipment, non-equipment, or personnel costs as they do not directly support policy making or operations.”—[Official Report, 6 April 2010; Vol. 508, c. 1200W.]
Rather than provide the information, which is readily available in the Ministry of Defence, the decision was taken just to stop providing it. Of course, that decision was taken under the Labour Government. I hope that the rhetoric in the public pronouncements about transparency and new politics by the incoming Government is matched by their openness.
On page seven of the coalition agreement, the Prime Minister and Deputy Prime Minister say:
“we are both committed to turning old thinking on its head and developing new approaches to government. For years, politicians could argue that because they held all the information, they needed more power. But today, technological innovation has—with astonishing speed—developed the opportunity to spread information and decentralise power in a way we have never seen before. So we will extend transparency to every area of public life.”
Section 16 of that agreement, which is entitled “Government Transparency”, says:
“The Government believes that we need to throw open the doors of public bodies, to enable the public to hold politicians and public bodies to account.... Setting government data free will bring significant economic benefits”.
Two specific commitments are mentioned. The Government say that, first:
“We will require full, online disclosure of all central government spending and contracts over £25,000”;
and secondly:
“We will create a new ‘right to data’ so that government-held datasets can be requested and used by the public, and then published on a regular basis.”
That is good. Given those clear, unambiguous commitments, I was delighted to hear similar claims of openness from the new Defence ministerial team during the House of Commons debate on the strategic defence and security review a few weeks ago. Hansard records that the new Armed Forces Minister, whom I welcome to the Chamber, said:
“Hon. Members—and everybody else—have the opportunity to contribute and make whatever representations they wish to make. If there are hon. Members who feel that they are under-informed, and want more information to inform representations that they might make during the review, they need only let us know. Ministers have an open-door policy, and Members are welcome to any further information that they feel they need.”
That prompted me to intervene, saying that the previous Government had provided this information and asking whether the new coalition would do so. He replied:
“Yes. Whatever information right hon. and hon. Members need in order to make representations to the review”.
I intervened to make doubly sure, asking,
“Is that a yes?”
The Minister answered unambiguously,
“That is a yes. Hon. Members need only ask for any information that they need.”—[Official Report, 21 June 2010; Vol. 512, c. 132.]
Naturally, I was delighted and impressed, and I wrote a grateful letter to the Minister. I received a reply on the same day. In the blink of an eye, he wrote:
“I regret that I may have given you a misleading impression on what information the Government can provide… I am sorry to send you what I know will be a disappointing response”.
In an instant, the Ministry of Defence reneged on its promise to the House of Commons and, by extension, the Government reneged on their coalition agreement on openness and transparency.
There are other vital clues that should make everyone who is concerned about a defence footprint across the UK examine the matter closely. Apparently, the UK Government believe that there is
“no clear defence benefit to be gained”
by collating statistics by region. Apparently, national and regional data do not directly support MOD decision making. Frankly, that is code for there being no benefit to the Government from being open, honest and transparent about their policy decisions and how they impact on the nations and regions of the UK.
In recent years, UK Governments have cut back manpower, amalgamated regiments and closed facilities in Scotland. Since the last strategic defence review, defence jobs in Scotland have been cut while numbers have risen elsewhere in the UK. A mammoth multi-billion pound defence underspend has opened up and we hear from the SDSR that serious cuts are pending. Despite Scotland having fewer airbases and aircraft than our Scandinavian neighbours of comparable size, the SDSR is considering base closures. Despite only three Army battalions being based in Scotland, there are fears that Scottish-recruited units could be further cut and barracks closed. Despite the reduction in the number of conventional naval craft to a handful of minesweepers on the Clyde, there is an option to cut them still further.
Thomas Docherty (Dunfermline and West Fife) (Lab)
The hon. Gentleman clearly knows his material and will be aware that published Ministry of Defence statistics show the vital role that the shipbuilding and refitting industry plays in many regions in Scotland. He will know the devastating impact that cancellation of the second aircraft carrier would have on the Scottish economy. Will he join me in congratulating the Labour and Scottish National party leaderships on Fife council, who have put aside their political differences, such is the importance of the shipbuilding and refitting industry to Fife and elsewhere?
Angus Robertson
I am delighted that SNP-led Fife council and the Labour Opposition are working as colleagues, because the matter is one of concern in Fife and on the Clyde, as well as in other parts of the country where a defence footprint remains. That is all the more reason why we need as many facts and figures as possible to understand the current situation and what it might be in future. The areas that I have mentioned are not the only ones to be affected; there are also questions involving military command functions that have recently been downgraded in Scotland, and apparently a further downgrading is being considered.
A real danger in the defence review is a further geographical concentration of the UK defence footprint away from Scotland, Wales, Northern Ireland and some English regions. Hon. Members should look where the current service headquarters are, where the main operating bases and garrisons are, where the main training facilities are, and where the defence budget is being spent, and ask whether the trend of geographic concentration will continue.
The Government may believe that they can hide the consequences of their centralising priorities and policies by refusing to publish key statistics, but it will be hard to avoid the facts on the ground. UK Governments have been content to recruit young men and women from across these islands and often to send them into harm's way. At some point soon, the MOD must ask itself whether it is acting in the interests of the whole UK. Defence policy is not just about strategic and foreign policy considerations, which must of course drive any review; it is also about the defence footprint, about where our personnel are stationed and about where defence resources are spent.
The UK Government must end the secrecy on regional and national defence statistics and the SDSR must consider the impact of its deliberations on the nations and regions of the UK. If it is good enough for other countries to do, it is good enough for the UK Government to do; if it is what is in the coalition agreement, it is what they should deliver on; and if it is what was promised in the House of Commons, it should not be reneged on.
The Minister for the Armed Forces (Nick Harvey)
Ministry of Defence national and regional statistics may sound a fairly obscure subject for a debate, so you can imagine my astonishment, Mr Amess, when I walked into the Chamber and found it packed to the rafters. I thought that there must have been some misunderstanding, and it was soon cleared up when hon. Members trooped out. Nevertheless, I congratulate the hon. Member for Moray (Angus Robertson) on raising the matter, which is clearly one about which he feels keenly. He demonstrated that the crux of the matter is not statistics. Rather it is in the size and structure of our armed forces and how we go about equipping them. The subject could hardly be more serious.
The hon. Gentleman clearly feels strongly about the matter. He has two major RAF operating bases in his constituency, and a significant number of his constituents are armed forces personnel. Clearly, he has done something to impress them at the last three elections because they continue to send him back as their MP. He has also spoken as his party’s spokesperson on defence matters. That party is, of course, the Scottish National party, and because of its pursuit of independence for Scotland comes with a certain perspective of the world. He will understand that I do not share that perspective, and as Minister for the Armed Forces, I could hardly be expected to do so.
The hon. Gentleman has spoken forcefully about the implications for Scotland of how the defence budget is spent, but I and my ministerial colleagues are more concerned with the implications for the men and women in the armed forces. Let me be absolutely clear that the purpose of the defence budget is to maintain the armed forces so that they can contribute to our nation’s security—the whole nation’s security. Every pound that the MOD spends must contribute to the security of the United Kingdom. Decisions on where personnel are based, and on which contracts are let to which firms are based fundamentally and totally on what is best for the armed forces.
I fear that the thesis that the hon. Gentleman advanced is based on a completely false premise of how defence works—for example, the idea that a variation in the number of servicemen and women permanently based in Scotland is somehow related to Scotland’s significance to our armed forces. That is simply not the case. The armed forces offer amazing opportunities to those who want to join, regardless of which part of the United Kingdom they come from. Scots may join any part of the Royal Navy, Royal Marines, Royal Air Force, or the Army, and have a tremendous career. I am sure that the hon. Gentleman knows that even joining the Royal Regiment of Scotland does not mean that a soldier will necessarily stay in Scotland.
The 4th Battalion the Royal Regiment of Scotland is currently based at Fallingbostel in Germany. Its personnel would not appear in any statistics as being based in Scotland, but that does not lessen the battalion’s connection with Scotland, or the contribution that it makes to Scotland’s economy. Of course not. Scots serving in the various parts of the Army, the Royal Navy, or the Royal Air Force, but not necessarily based in Scotland, do not, in any sense, lessen the contribution that those Scots make to the armed forces. As the Secretary of State said recently in the House, the service personnel we meet do not care whether their comrades come from Cardiff, Edinburgh, Belfast or London. They are all members of the armed forces under the Crown, and proud of it.
The hon. Gentleman spoke passionately about patterns of defence spending. He referred to the defence footprint, and then alleged that there was a defence underspend in Scotland, but that is simply not the basis on which defence could possibly be organised by a Department with specific responsibility for the provision of defence of the entire realm. We have an interest in the defence footprint to some extent, but only in so far as it enables our military functions to be performed better. We must ask whether footprint is an issue in military terms, and whether it affects our ability to recruit from and defend the whole of the United Kingdom. That is the beginning and end of the Ministry of Defence’s responsibility to consider the defence footprint.
It cannot be repeated often enough that every pound of the defence budget must deliver as much as possible for the men and women of our armed forces, and through them, our national security. As Minister for the Armed Forces, I make no apologies for seeing beyond where a firm is based and looking at the overall benefit to our service personnel. It is the duty of Government to ensure that the defence budget is spent wisely, maximising the resources available to the front line and ensuring that every pound counts.
Operating at a national UK level is the only way that we will achieve the best value for money and deliver what the armed forces need. That is what matters. The hon. Gentleman seems to propose a different method of spending the defence budget. He implies that there should be a quota for each region and nation of the United Kingdom. Perhaps he thinks that a set proportion should be spent in each region; perhaps a set proportion should be spent overseas. He seems to believe in a concept of a “fair share” to be calculated per head of population, and the implication seems to be that we should do that irrespective of the capabilities that it would provide for the armed forces. Surely he does not think that that would be a wise way to allocate the defence budget? If that argument is taken to the extreme and we look at regions where there are no defence manufacturers, the logic would suggest that we should artificially stimulate the creation of a defence manufacturer.
Nick Harvey
With great reluctance, since the hon. Gentleman has not observed the normal courtesies.
Thomas Docherty
Does the Minister understand that his arguments about making decisions based purely on defence would have more credibility in Scotland if the previous Conservative Government had not taken the Trident contract away from Rosyth and sent it to Devonport? That was not in the interests of the MOD or the taxpayer; it was about political chicanery.
Nick Harvey
I listened with interest to the opening speech from the hon. Member for Moray. His thesis seemed to be that the 13 years of the previous Labour Government had—according to the construct in his mind and his ideas about the fair divvying out of jobs and investment—counted against Scotland’s interests. It is not my role or responsibility to defend the previous Conservative Government or any decision that they made. However, if the previous Government did what the hon. Gentleman alleges, one presumes that they did it according to their best calculation of how to act in the interests of UK defence. One might not necessarily agree with each and every decision that the Government took, but they took those decisions from that perspective. The Ministry of Defence’s responsibility is the defence of the realm. Other Departments have responsibility for stimulating economic growth in different parts of the country. If hon. Members wish to form cross-governmental policies, they are welcome to do so, but that is not the purpose and locus of the Ministry of Defence. Our role is to secure the defence of the realm and to ensure that our armed forces are properly supported and equipped to carry out that function. There would be no sensible alternative way to organise our defences. Any alteration to that general approach would be a function of industrial policy.
I make no apologies for differing with the hon. Gentleman on that matter. We do not allocate money on a regional basis and it should be clear why the MOD stopped producing estimates of its regional expenditure two or three years ago. Quite simply, the estimates did not add anything to the decision-making process, given that that process was founded, fairly and squarely, on defence considerations.
The decision passed me by at the time—I make no bones about that. However, I can see no sinister motive, cover up or scramble to hide uncomfortable truths. The hon. Gentleman presents his concern as if it is part of some preconceived plot, but it seems from the time scale that the MOD had stopped gathering those statistics before it conceded the principle of a strategic defence review. The idea that one action went hand in glove with the other to mask the impact of the strategic defence review is far-fetched in the extreme. Let me return to my point: every pound counts. I readily acknowledge that those estimates may have been helpful to the hon. Gentleman in pursuing a political agenda, but they were not helpful to the Ministry of Defence in furthering decisions that had to be based on defence considerations.
The previous Administration drove down the cost of MOD head office by about 25%, which meant that the number of analytical staff in head office was reduced by a similar proportion. That was achieved by cutting some low-priority outputs, and one output deemed to have lower priority was the estimate of defence expenditure by region, and the employment dependent on that expenditure. That decision was made two or three years ago and I was not party to it, although I understand the logic behind the decision. By all accounts, the figures were difficult to produce and resource-intensive to maintain. They relied on analytical tables produced by the Office for National Statistics, which have not been updated since 1995. As I explained, that did not support the MOD’s decision making.
I have looked into how much it would cost to reintroduce the estimates, and I am told that reproducing the ONS tables would cost in the region of £150,000. Every three years or so, another £100,000 would have to be spent updating the underlying data. Additional statistical staff would have to be employed to perform regular updates at a cost of about £50,000 a year. As much as I respect the hon. Gentleman, I agree with my predecessors that one struggles to justify that expenditure as being in the interests of United Kingdom defence.
The hon. Gentleman challenged me about the exchange that we had on the Floor of the House. I have already apologised to him unreservedly, and I will do so again today. I raised a false hope and expectation that production of the figures could recommence. I understood that he was asking me to stop suppressing some information held by the Ministry, and I agreed to his request on that basis. Had he explained in large letters that he wanted to recompile figures that had ceased to be complied two or three years ago, I would have looked into the issue more seriously before replying. My impression was that the information was still held and that the previous Government had chosen, for political reasons, to suppress it. I turned to the Secretary of State for Defence and asked what he thought about it, and he replied, “He can have whatever we’ve got.” The hon. Gentleman can have whatever we have got, but we do not have what he asks for. It would cost a lot of money to get it again.
In conclusion, it would be a mistake to believe that we are singling out Scotland—I know that the hon. Gentleman feels that we are, but we are not. We are ceasing to produce such figures across the board. I would be interested to know whether he can point to any other central Government Department that goes to a lot of cost and expense to break figures down on a regional basis in that fashion. We cannot find any comparator in the ways that other Departments spend money on UK-wide projects, but if the hon. Gentleman can point to one, I will have another look. This debate should not be about competition between different parts of the UK. As far as we are concerned, it is about the security of the nation. We must spend our money on that basis, not on compiling the figures that the hon. Gentleman asks for.
Written Ministerial Statements
(13 years, 9 months ago)
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“A Strategy for Sustainable Growth”
(13 years, 9 months ago)
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The Secretary of State for Business, Innovation and Skills (Vince Cable)
Balanced and sustainable economic growth can only be driven by business and enterprise. Business in the UK cannot prosper while the risk of a debt crisis hangs over the economy. This Government have therefore rightly put decisive action on the fiscal deficit at the centre of its agenda. Equally though, it is vital we recognise strong and continuing growth is a key route to getting this country back on track, including paying down our debts. Today I am publishing “A Strategy for Sustainable Growth”, which sets out some of the challenges and choices we face moving forward.
There are three key planks of our strategy
promoting the efficient operation of markets to support growth;
smarter public and private investment in the economy, including creating a highly skilled workforce; and
encouraging entrepreneurialism and individual engagement in the economy to support growth.
Despite the constrained fiscal environment, we believe there are good reasons to be optimistic that we can achieve balanced and sustainable growth. It is Government’s role to provide the vision and strong leadership necessary to make it happen.
As set out in our strategy, a more sustainable and balanced model of growth will be one that develops our exports, enables business to grow, spreads jobs and opportunities across regions, protects and builds on Britain’s strengths, and positions us to prosper through the transition to a greener economy. Government must ensure there is stability, certainty and fairness in the business environment which will encourage private sector investment and entrepreneurialism.
We also need to recognise and understand how Government policy impacts on business—and where we can get rid of unnecessary barriers to growth. Our deregulation agenda is an important part of this.
Government must also ensure that when they use public money they elicit the greatest possible economic returns. We need to make more use of our scientific and research excellence so that innovation can drive long-term growth and change, and we need to ensure we have the skill and infrastructure needed to meet new challenges and make the most of the opportunities available.
Copies of “A Strategy for Sustainable Growth” have been deposited in the Libraries of both Houses, and are available on the BIS website.
Office of Tax Simplification
(13 years, 9 months ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
The independent Office of Tax Simplification has been established today to provide advice to the Chancellor on delivering a simpler tax system. Michael Jack and John Whiting have been appointed as the interim chair and tax director to lead the office for the first year.
Sport (Priorities)
(13 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Hugh Robertson)
I am announcing today the coalition Government’s three immediate priorities for sport. These are, in order: first, strongly to support England’s bid to host the FIFA 2018 World cup; secondly, to deliver the London 2012 Olympic and Paralympic games on time and on budget; and thirdly, on the back of a successful games, to secure a mass participation legacy for sport.
This Government see that legacy for sport comprising five key policy components:
1. In financial terms, we will restore sport’s share of national lottery funding to 20%. A public consultation has already started and this Government hope to lay any resulting parliamentary legislation in the autumn.
2. We are committed to ensuring that sport has an efficient, modern delivery structure. So, while maintaining their current roles and responsibilities, we will therefore push ahead with plans to bring together UK Sport, Sport England and the Youth Sport Trust under one roof so that they can work better together for the long-term benefit of sport.
3. In the elite and high performance area, we want to use the bid for the FIFA 2018 World cup to enshrine, across primary legislation, what sporting governing bodies can expect from Government when bidding to their international federations for the right to host world-class events.
4. In school sport, we want to have a renewed drive on competition. We will therefore introduce a school sport Olympic-style competition that will build on the good work already done by the UK School Games, while providing a stimulus and focus for competitive sport among schools at local level.
5. On the community sport and mass-participation side, we can confirm that, using the extra money we expect to flow through to sport from the lottery reforms, Sport England will take the lead responsibility for delivering the participation legacy from the London 2012 Olympic and Paralympic games. This gives Sport England two clear aims, delivering on their whole sport plans and driving a mass-participation sport legacy from the games and subsequent world-class events. Plans are being worked-up at the moment and we will make a further announcement in the autumn.
In addition, I am announcing today that I have asked the Central Council of Physical Recreation (CCPR), the alliance of National Governing Bodies of Sport, to undertake a review on behalf of the Department. This will look at whether the amount of money that governing bodies agree to re-invest in their sport’s grassroots, including in school and club programmes for young people, under the CCPR voluntary code relating to the broadcasting of major sporting events, can be raised from the existing 5% minimum to 30% or one third.
Rural Payments Agency
(13 years, 9 months ago)
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The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)
The Rural Payments Agency (RPA) delivers £2.3 billion of common agricultural policy payments each year to the businesses and organisations which produce our food and maintain our rural economy, cultural heritage and environmental landscapes. Farmers applying for the single payment scheme payments from the Rural Payments Agency have experienced a turbulent few years. They deserve a better quality of service.
I am today publishing an independent review of RPA, completed by David Lane working with Deloitte, PWC and Gartner, and the Government response to it. Copies of the executive summary have been placed in the Libraries of both Houses. The related reports are available on the DEFRA website.
The review was commissioned by DEFRA in September 2009 and gives an evidenced view of RPA’s current state as well as preparations for the EU-wide common agricultural policy negotiations, expected to conclude in 2013. The review’s key findings are that:
RPA’s finance function and controls need to be strengthened, and that it was particularly concerning that the agency management could not form a view on the value of the debts that were on RPA’s accounts;
there are significant opportunities to provide a better quality of customer service and deliver efficiencies through improvements in the operational processes;
that a significant opportunity exists in developing new IT systems for post 2013, learning from the rushed implementation in 2005;
there was a lack of appropriate governance and oversight from within RPA’s leadership and DEFRA; and
there are considerable gaps in the organisation’s controls and leadership capability.
Since the well-publicised problems in implementing the single payment scheme in 2005-06, RPA has made significant improvements, particularly in the speed of making payments to customers. This has been achieved against a backdrop of a poorly specified IT system, which constrained the ability of staff to get the job done, and reducing staff numbers. However, there is significantly more to be done. The administrative cost per payment is too high and where there are problems, it takes too long for them to be resolved.
I will not allow this state of affairs to continue. We are moving into a new and challenging phase for RPA and the review highlights how important it is that RPA has the right capability in place to lead the organisation through this period and the right degree of oversight from DEFRA. I will personally drive forward progress by chairing a new oversight board. As announced last week, the chief executive is leaving at the end of July and we will seek a new chief executive from the widest available pool. In the meantime an interim chief executive has been appointed and I will make an announcement shortly on this. The interim chief operating officer and interim finance director appointments are due to end shortly. This gives the new chief executive the opportunity to build a leadership team to deal with the new challenges. I will work with the RPA management team to deliver the standard of services our customers deserve.
The key challenge for the agency is to deliver a better quality of service, while reducing the operating costs so that both farmers and taxpayers are getting a better deal. It is also to build a strong organisation that is ready to deal with the changes that are likely to come with the reform of the common agricultural policy. My priorities for action are:
Delivering improvements to customer experience through improving the accuracy of the agency’s information, while maintaining an acceptable speed of payments.
Ensuring that the agency is focused on improving value for money, aggressively pursuing efficiencies while balancing the need to provide a good service to farmers.
Ensuring that the agency becomes a more efficient operation, getting the basics like financial controls and accounts right.
Making essential preparations for the new schemes which are likely to be introduced after the 2013 common agricultural policy reform negotiations.
In the current financial climate, RPA will need to look radically at its operations and drive for efficiencies. Following the principle that Government should only do those things which only Government can do, we are examining how parts of the DEFRA network’s assets could be marketed or be run better through other partners, while protecting key DEFRA outcomes. In keeping with this principle, the review identified a number of options including outsourcing parts of or all of RPA’s operations. These options will be evaluated and considered by my RPA oversight board. There will need to be prioritisation between those investments which we can make, and focusing attention on those areas which will have the greatest impact.
I thank the review team for this report. I will be working with the oversight board, RPA staff, customers and Members of Parliament to ensure that all of the recommendations are carefully considered and action is taken. I will update the House on progress at appropriate times.
Commission on the Funding of Care and Support
(13 years, 9 months ago)
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The Secretary of State for Health (Mr Andrew Lansley)
I have today placed in the Library the terms of reference for the Commission on the Funding of Care and Support. Copies are available to hon. Members in the Vote Office.
I am also pleased to announce to the House that Andrew Dilnot will be chairing the commission. There will be two additional Commissioners, Dame Jo Williams and Lord Norman Warner. The commission will also draw on the expertise of two expert independent panels, one comprising academics and the other experts drawn from the financial services industry.
Urgent reform of the social care system is needed and the Government have made clear their commitment and determination to reach a fair and enduring settlement for the system for generations to come. We want a sustainable adult social care system that gives people the support and freedom to lead the life they choose, with dignity.
This announcement follows on from the commitment set out in the coalition agreement to—
“establish a commission on long-term care, to report within a year. The commission will consider a range of ideas, including both a voluntary insurance scheme to protect the assets of those who go into residential care, and a partnership scheme as proposed by Derek Wanless”.
It is my intention to publish a White Paper next year, which will bring together the conclusions of the commission, with the work being led by the Law Commission on creating a single modern statute for social care, and the Government’s vision for social care. This will be followed with legislation to establish a sustainable legal and financial framework for adult social care in this Parliament.
Serious Organised Crime Agency (Annual Report)
(13 years, 9 months ago)
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The Minister for Police (Nick Herbert)
The annual report of the Serious Organised Crime Agency for 2009-10 is being published and laid before Parliament today. As required by the Serious Organised Crime and Police Act 2005, the report includes an assessment of the extent to which the annual plan for 2009-10 has been carried out. Copies of the report are available in the Vote Office.
The report covers the financial year immediately preceding the general election. We set out our plans for policing in our coalition agreement and we will review SOCA alongside our review of the wider policing landscape.
Bribery Act
(13 years, 9 months ago)
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The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)
The Bribery Act 2010 creates a new set of offences that should equip prosecutors and the courts with the tools they require to ensure that all forms of bribery, at home and abroad, are met with an effective criminal justice response. As I stated in my statement of the 15 June following my appointment as international anti-corruption champion, effective implementation of the Act, which demonstrates cross-party commitment to the fight against bribery, is a coalition priority.
Section 7 of the Act creates a new offence which can be committed by commercial organisations which fail to prevent bribery committed for their benefit. However, it is a defence for an organisation to prove it had adequate procedures in place to prevent bribery being committed on its behalf. Section 9 establishes a duty on the Secretary of State to publish guidance about procedures which commercial organisations can put in place to prevent bribery. We believe it is important that the guidance to be issued takes account of the views of those with an interest in this area, including both business and non-governmental organisations. We also consider it vital that the timing of the publication of the guidance allows for an adequate period of familiarisation before the commencement of the Act.
We therefore propose to conduct a public consultation exercise on the form and content of guidance to be issued under section 9 of the Act beginning in late summer with a view to publishing guidance early in the new year in preparation for commencement of the Act in the spring of 2011.
Machinery of Government Changes
(13 years, 9 months ago)
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The Prime Minister (Mr David Cameron)
Three Machinery of Government changes are being announced today affecting the responsibilities of the Food Standards Agency in England; responsibility for Directgov; and responsibility for the Licensing Act 2003. Legislation to give full effect to some of these changes will be brought forward in due course.
Food Standards Agency in England
The Government recognise the important role of the Food Standards Agency in England, which will continue to be responsible for food safety. The Food Standards Agency will remain a non-ministerial department reporting to Parliament through Health Ministers.
In England, nutrition policy will become a responsibility of the Secretary of State for Health. Food labelling and food composition policy, where not related to food safety, will become a responsibility of the Secretary of State for Environment, Food and Rural Affairs.
Directgov
Responsibility for Directgov will transfer from the Secretary of State for Work and Pensions to the Minister for the Cabinet Office.
The Licensing Act 2003
Responsibility for the Licensing Act 2003, except in relation to regulated entertainment, will transfer from the Secretary of State for Culture, Olympics, Media and Sport to the Home Secretary.
Further details of these changes, and other recent significant changes, will be published in due course and copies will be placed in the House Libraries.
House of Lords
Introduction: Lord Macdonald of River Glaven
Introduction: Lord Howard of Lympne
Introduction: Baroness Nye
Energy: Large Combustion Plant Directive
(13 years, 9 months ago)
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Lord Willoughby de Broke
To ask Her Majesty’s Government what are their intentions as regards the large combustion plant directive and the generating plants concerned.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)
My Lords, the Government’s intention is that all combustion plants in the UK which are subject to that directive should comply with its requirements.
Lord Willoughby de Broke
My Lords, I am grateful for that frank Answer. However, can the Minister confirm that, under the provisions of that directive, 25 per cent of the UK’s generating capacity is due to close down by 2015? Would it not be preferable for the United Kingdom’s energy policy to be made by the Government and the Parliament in this country rather than contract it out to the European Commission?
Lord Henley
My Lords, I cannot confirm the noble Lord’s figure; I would not accept that it will be as high as 25 per cent by 2015. I accept that a number of plants are so dirty in their emissions that they will have to close in due course, but I can confirm that other generating capacity is coming on stream in time to replace those that will close.
Lord Teverson
Absolutely. Does my noble friend agree that by the directive we reduce important pollution—sulphur dioxide and nitrous oxides—and that that is a good thing? When will the coalition Government bring forward the emission performance standards for power stations, which will also rid us of some of our carbon dioxide?
Lord Henley
My Lords, I can confirm exactly what my noble friend said: by the directive, we will be reducing by quite large amounts the sulphur dioxide, the nitrogen oxides and the dust emissions which can be harmful to both human health and the environment. That can only be a good thing. As I said in answer to the first supplementary question, we also hope to have other capacity on stream to deal with the plants that are closing.
Baroness Quin
My Lords, the party of the noble Lord who asked the Question is of course opposed to binding EU targets on renewables, biofuels and other EU environmental initiatives, but is it not the case that, when emissions affect a number of countries simultaneously, European and international action is both welcome and indispensable? Is it not also the case that, given the recent vote in the European Parliament, while stricter emissions standards are favoured, the situation of individual member states will be more greatly taken into account in future?
Lord Henley
My Lords, I can agree on that. Where emissions from one country affect other countries and the whole world, that should be dealt with internationally. That is why it is quite right that the EU should deal with them, especially those that are damaging to human health, which is the case with those dealt with by the large combustion plant directive. The noble Baroness then referred to the recent vote by the European Parliament on the industrial emissions directive. Again, we will take that forward, and it will replace the large combustion plant directive in 2016. That will further tighten the requirements, but those are matters that we have agreed, and we have introduced certain flexibilities that will make life easier for a lot of those plants until the end of 2023.
Lord Tebbit
My Lords, can my noble friend tell me how much of our generating requirement over the next five years will be fulfilled by buying electricity from France?
Lord Henley
My Lords, I am afraid that I cannot give that figure to my noble friend off-the-cuff; I will certainly write to him. If the French have spare capacity from their nuclear power stations, I do not see anything wrong with buying in capacity from them to deal with shortfalls that we may have.
The Lord Bishop of Chester
My Lords, can the Minister tell us what will be the method of generation for the plants that will need to be constructed and brought on stream by 2015?
Lord Henley
My Lords, I imagine that most of them will be gas, but there will also be a certain amount of renewable, particularly wind. However, there will also be renewable from other sources, such as biomass, which the noble Baroness opposite referred to. In due course, as we have large stocks of coal, and by means of clean coal procedure—the further derogations that we have until 2023 will allow us to develop this further—coal could also play a part.
Lord Pearson of Rannoch
My Lords, have the Government any reason to disagree with the respected think tank Open Europe’s estimate that the EU climate change policy will put at least 1 million British people into fuel poverty? Do they have any reason to disagree with Mr Derek Birkett, a former grid controller, as reported in yesterday’s Daily Express, who has estimated that the calamity about to be visited upon the British people through the climate change policy of the European Union—the science for which has completely collapsed—will amount to at least the cost of the banking crisis?
Lord Henley
My Lords, this is not just about climate change. It is also about human health, which is why it is important that we see a reduction in the particular gases that we talked about earlier—nitrogen oxides and sulphur dioxides—and, for that matter, dust emissions. On his further point about how many people are allegedly going to be put out of work, if we had not secured the changes to the industrial emissions directive, we would have seen an increase in electricity prices of some 8 per cent. As a result of the changes that we have secured, which I talked about earlier and which go up to 2023, those rises will be only about 3 per cent. I do not think that that is bad, and I do not think that it will lead to any loss of jobs.
Lord Tomlinson
Will the Minister undertake to give us a health warning if ever the Government were tempted to formulate their European policy on the basis of the opinions of Open Europe and the Daily Express?
Lord Henley
My Lords, I will give that assurance to the noble Lord if he so wishes.
Lord Pearson of Rannoch
My Lords, I did not say unemployed; I said fuel poverty. One million people will be put into fuel poverty.
Lord Henley
My Lords, I believe I answered that question by making it quite clear that electricity prices are not going to rise as much as the noble Lord and his alarmist friends suggested.
Debt Management Office
Lord Higgins
To ask Her Majesty’s Government whether they will transfer responsibility for the Debt Management Office to the Bank of England.
The Commercial Secretary to the Treasury (Lord Sassoon)
There are no current plans to transfer responsibility for the Debt Management Office to the Bank of England.
Lord Higgins
My Lords, I thank the Minister for that reply, but I urge him to reconsider it since it effectively endorses the mistaken decision of Mr Gordon Brown, when he first became Chancellor of the Exchequer, to give responsibility for monetary policy to the Bank of England but to take away its responsibility for debt management, which is clearly a major influence in deciding what is likely to be the money supply. The problem has become even clearer with the introduction of quantitative easing because the Bank has been buying assets while at the same time the Debt Management Office has been selling them. It has been an entirely circular arrangement, and there has been virtually no increase in the money supply as a result of the quantitative easing. Would my noble friend not agree that in the present circumstances, it is crucial that we have an effective monetary policy and that can happen only if the Bank of England is given the powers it used to have?
Lord Sassoon
My noble friend Lord Higgins raises an important question. I think that it is part of a wider debate at the moment about the responsibilities and levers which central banks have, including, among others, the linkages between the conduct of monetary and financial stability policy. As noble Lords are aware, we are not shy of making structural changes where they appear to be justified, as we are doing by moving banking supervision back into the Bank of England.
That said, I believe that the arguments for minimising conflicts of interest by separating debt management and monetary policy objectives and accountabilities are persuasive. The IMF has maintained the position that countries should have such separation and it has become international best practice among our peer-group countries, including France and Germany.
Lord Bilimoria
My Lords, the Americans passed the Glass-Steagall Act in 1933, which was to reform their banking sector. That was repealed only in 1980 and now they have just passed the Dodd-Frank Act. Will the Minister explain the pros and cons of this Government’s proposed banking and financial sector reform compared with the American Dodd-Frank Act?
Lord Sassoon
My Lords, there are some big questions. I will try to bring the question asked by the noble Lord, Lord Bilimoria, back to the Debt Management Office and the Bank of England, which will make it more manageable. In the context of a fragile banking system, it is very important that the objectives on monetary policy of the Bank of England, including its ability which it exercised up to £200 billion to use quantitative easing as a way of fulfilling its monetary policy objective, are kept separated from the equally critical role of the Debt Management Office. Thanks to the deficit left to us by the previous Government, it had to issue more than £200 billion of debt last year, which compares with £8 billion in 1998-99. They both have challenging objectives and separation in that sense is very important.
Lord Newby
My Lords, given the decision yesterday by National Savings & Investments to withdraw its index-linked bond, have the Government any plans to review the strategy of NS&I and, in particular, its scope for generating funds to help meet the Government’s overall funding target?
Lord Sassoon
My Lords, we consider carefully each year and publish transparently the mandates for the Debt Management Office, but consider in that context the remit that we give to NS&I. Its essential task is to contribute in a cost-effective manner to debt raising. It has to look against the targets for debt raising, which we give it, at the appropriate product set that it offers to the public. It is in that context that it periodically withdraws or introduces new products.
Lord Pearson of Rannoch
My Lords, do the Government agree with the Written Answer of the previous Government on 21 July 2009 to the effect that overall supervision of all our financial services is to be vested in the European Union? Which category does this debt management fall under? Is it day-to-day supervision or will it be controlled by the overall supervision of all our financial services which we have passed to Brussels?
Lord Sassoon
My Lords, I do not recollect the previous Government’s Answer to that Question, but I would be surprised if they gave the Answer that we have just heard because supervision of our financial institutions is not being transferred to Brussels under any current proposal.
Lord Trimble
My Lords, coming back to the original Question, does my noble friend the Minister agree that an increase in the money supply would be highly desirable from the point of view of the recovery? If there has been no increase in the money supply because of the inter-relationship between debt management and quantitative easing, is that not something that should be looked at again?
Lord Sassoon
My Lords, as I have stressed, monetary policy is for the Bank of England. Therefore, it is not for me to comment on the way in which it exercises that responsibility. But the fact is that it took the decisions that it did to purchase assets under the so-called quantitative easing programme in order to meet the inflation target which the Chancellor gives them. The Bank’s latest assessment was that that programme contributed to keeping long-term interest rates 1 per cent below what they would otherwise have been.
Lord Barnett
My Lords, the noble Lord has just said that it is not for him to comment on what the Bank of England does, but a senior official at the Treasury sits in on Monetary Policy Committee meetings on a permanent basis. Does he never talk to him?
Lord Sassoon
My Lords, it is correct that a senior official of the Treasury sits in on the monthly Monetary Policy Committee meetings, but that official is not a member of the committee. I have performed that function myself on one occasion, and I understood that it was my duty to bring to the attention of the MPC anything the Treasury thought it ought to be aware of.
Agriculture: Single Farm Payments
(13 years, 9 months ago)
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The Duke of Montrose
To ask Her Majesty’s Government whether the issues experienced with mapping in England and Wales within the single farm payment scheme have been overcome.
The Duke of Montrose
My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as a farmer receiving payments from the Rural Payments Agency.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley)
My Lords, similarly, I declare an interest. Over the past year, all farmers in England have been sent updated maps where required for the purposes of the common agricultural policy. This was intended to ensure that the maps better represented the current situation on the ground. However, we are aware that too many farmers were initially sent incomplete or incorrect maps. We intend to ensure that farmers receive a better service in the future. The Welsh Assembly is responsible for farmers’ maps in Wales.
The Duke of Montrose
My Lords, I thank my noble friend for that reply. Has he noted that the rural land mapping exercise was not part of the Rural Payments Agency review that has been published today? Can he confirm that one month before the closing date for single farm payment applications, nearly 1,250 farmers in England were still waiting to receive their revised maps? How many units are still awaiting their maps? Is he satisfied that the problems have been identified and that they are unlikely to be repeated?
Lord Henley
My Lords, I can confirm that the review which was published today was not asked to look at the mapping exercise. Nevertheless, due to the problems in this particular area, the review commented on it. I cannot confirm the figure of 1,250 farmers not having received their maps by the end of the period last year, but I can confirm from an Answer given by the noble Lord, Lord Davies of Oldham, that in March last year, some 10,333 were still outstanding. I do not know how far the figure dropped in the closing months. I can confirm that all have now been issued, but if my noble friend knows of any individual cases in England, I would be grateful if he could let me know.
Baroness Byford
My Lords, further to the Minister’s answer to my noble friend, can he say how many of the outstanding single farm payments—the figure I have been quoted is that some 818 such payments are still outstanding—are due to computer problems and how many to a combination of the mapping exercise and the computer system? That would help to clarify the situation for others.
Lord Henley
My Lords, I cannot give my noble friend a precise figure, but there are very few left. My understanding is that most of those remaining relate to problems other than those she describes, such as those in connection with probate or other such personal changes that might affect them. However, the agency is certainly doing what it can to clear the small remaining backlog.
Lord Grantchester
My Lords, will the Minister pay tribute to the staff at Defra who I know have worked tirelessly on these issues, and will he give an assurance that farmers will not be penalised for mistakes that are not of their doing? In asking these questions, I declare my interest as a farmer and would like to put the record straight that the microphones did not pick up my declaration last week.
Lord Henley
My Lords, I am grateful to the noble Lord for what he has said about the staff in Defra. I have taken it on board and will pass it back to the department. However, there are some tough messages not only for the RPA but also for Defra itself as a result of the review of the agency that has been published today. I can also give the noble Lord an assurance that the RPA is already committed to not applying penalties in specific circumstance where a farmer has had an outstanding mapping query on a land parcel and as a result has estimated entries on his form.
The Lord Bishop of Hereford
My Lords, while recognising that the new mapping exercise has been necessary but also acknowledging the inaccuracies that have arisen, leading to far too many people having to seek support from both the Rural Stress Helpline and the Farm Crisis Network, can the noble Lord tell us what steps are being taken to ensure that any future updates that are needed will be done as efficiently and speedily as possible so as to reduce stress on claimants?
Lord Henley
My Lords, as regards the mapping updates, I can assure the right reverend Prelate that we will look carefully at what is the best way of doing this and whether we should have more regular small-scale updates or less regular large-scale updates; either is possible. On his more general point about problems in the Rural Payments Agency, as I said earlier in answer to another question on another day, my honourable friend the Minister of State, Mr Jim Paice, has given an assurance that he will look hard at this matter and that he will personally chair the body which will overlook the changes to the RPA.
Lord Greaves
My Lords, the Rural Payments Agency’s business plan for this year already requires a reduction in administration costs of about 10 per cent. Will the Government require further cuts in the RPA’s budget as part of the austerity measures? If so, what will they be; how big will they be; and what effect will they have on the service provided?
Lord Henley
My Lords, I can confirm the noble Lord’s earlier figures but I cannot confirm what other cuts that agency, or any other agency, may have to face. My noble friend will be aware that all parts of government are facing severe measures to deal with the deficit we inherited from the previous Government.
The Earl of Selborne
Can my noble confirm that the review to which he referred amounts to a damning indictment of the Rural Payments Agency and that it suggests two options: one is to outsource part of the operations and the other is to outsource all of the operations? Does he agree that the latter option seems the most preferable?
Lord Henley
My Lords, we will look at both options. I note that my noble friend used the words “a damning indictment”; I will say only that there are some fairly tough messages for the Rural Payments Agency and leave it at that.
Lord Livsey of Talgarth
My Lords, given the statistics about the waiting list for single farm payments, will the Minister acknowledge that the system in Wales uses GIS technology? Will he urge the RPA to adopt it because there are practically no problems with it?
Lord Henley
My Lords, I am sure we can always learn a great deal from the devolved Administrations in Wales and in Scotland.
Elections: AV Referendum and Scottish Parliament
(13 years, 9 months ago)
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Lord McAvoy
To ask Her Majesty’s Government what is their response to the representations made by the Convener of the Interim Electoral Management Board for Scotland stating that any referendum on introducing the alternative vote could not be combined in Scotland with elections to the Scottish Parliament under that Parliament's current rules.
The Advocate-General for Scotland (Lord Wallace of Tankerness)
My Lords, the letter that my right honourable friend received from the convener of the board made no such representations. Specifically, there are no rules of the Scottish Parliament which deal with these matters as responsibility for election administration remains with the United Kingdom Parliament.
Lord McAvoy
My Lords, that then begs the question of exactly who arranges and legislates for the specific date. What the Minister has said contradicts what the election board convener has said and needs further clarification. When the Deputy Prime Minister made a Statement in the other place on the proposed referendum he made no mention of the position in Scotland regarding the date. The suspicion there is that in the rush to satisfy the Liberals, no proper consideration was given to ascertaining the correct position regarding the date. How does it meet with the Government’s policy of respect for the Scottish Parliament and for this House if we are asked to rush through legislation based not on the needs of the country but on the needs of a shabby collaboration between two political parties?
Lord Wallace of Tankerness
My Lords, I am grateful for the opportunity to clarify the position, because I have had the benefit of seeing the letter from Mr Tom Aitchison, the board convener, and have not had to rely just on press reports. In that letter Mr Aitchison indicates that he would encourage the UK Government to amend the order for the Scottish Parliament elections to allow a combined poll to be held. Under the current rules, under the order of 2007, it is not possible for that to happen. However, he goes on to say:
“Allowing a formal combination of polls, for the referendum and parliamentary elections, would have many advantages both for the voter and the electoral administrators”.
We were already seized of that, and it will be addressed in the forthcoming legislation to pave the way for the referendum and the alternative vote. I would only add that the noble Lord—whom I welcome to this House, having served with him in the other place—whipped the Scotland Act, which makes provision for the Scottish election polls to be combined with a poll for another election. It does not allow them to be combined with a poll for a referendum, but that is what the forthcoming legislation will seek to do.
Lord Maclennan of Rogart
My Lords, has my noble friend had an opportunity to consider the possible coincidence in timing of the elections to the Scottish Parliament and the general election to the United Kingdom Parliament in 1915? Would that require some alteration of our legislation?
Lord Wallace of Tankerness
My Lords, I am sure that my noble friend meant 2015—1915 is beyond my abilities. He makes a very important point. My right honourable friend the Secretary of State for Scotland has already written to the First Minister, the Presiding Officer of the Scottish Parliament, the other political leaders in Scotland, the Electoral Commission and election administrators to say that he is prepared to discuss this issue with them. I can assure my noble friend and the House that my right honourable friend will listen constructively to what they have to say on the coincidence of elections, as a result of fixed-term Parliaments, in 2015 and every 20 years thereafter.
Lord Hunt of Kings Heath
My Lords, in addition to the issue of a number of votes taking place on the same day next May, including potentially three votes in Wales, is there not also the issue of a differential turnout? Parts of this country, particularly London, will not have any vote at all except the potential referendum vote. There will be a differential turnout. Will that not call into question the very fairness of a referendum?
Lord Wallace of Tankerness
No, I do not think that it should. Indeed, I make no secret of the fact that there is a combination of polls in Scotland, Wales, Northern Ireland and many parts of England where there are local elections. One of the advantages will be increased turnouts for both the respective elections and the referendum. It will be up to the respective yes or no campaigns in places where there are no other elections to try to ensure that there is a good turnout for a referendum on a very important issue facing the country—how its elected House should be elected. It is an issue on which the noble Lord’s party brought forward legislation when it was in government. I look forward to receiving its support when we debate these matters when the Bill comes to this House.
Lord Grocott
Further to the answer that he has just given, does the noble and learned Lord not recall, as I do, that for years and years the Deputy Prime Minister and others have been assuring us that the British public are desperate to get rid of the first past the post system and will queue at the polling stations at the first opportunity to do so? Now we are being told that it is essential that we have the referendum on the same day as some other elections because it is the only way that you can guarantee that anyone at all will be bothered to turn out. Who is right?
Lord Wallace of Tankerness
The answer is the one that I just gave to the noble Lord, Lord Hunt, who is concerned that there might not be a good turnout in places such as London. It is an important issue, and these issues will be well debated. However, I think that those who are suggesting that, somehow or other, people in Scotland, Wales, Northern Ireland and parts of England cannot cope with dealing with two issues on the one day are totally underestimating them. It is an insult for them to suggest that it is not possible to vote on both matters on the same day.
Lord Tyler
Will my noble friend confirm whether there is a precedent for holding a referendum on the same day as local elections? I have been informed that the voters of London were able to vote in a referendum about the future governance of the city at the same time as local elections were taking place. Will he confirm that the people of Scotland are quite as intelligent as the people of London?
Lord Wallace of Tankerness
I am certainly happy to give that confirmation. I think—I will need to check, but I think—that my noble friend is right that the referendum on the mayoral system for London was on the same day as the London local elections. I think that I was registered in London at that time, when I was a Member of the other place. I remember going to the same polling station as my noble friend Lord Ashdown and, as we entered it, the then leader of my party asked, “Which way do we vote?”.
Lord Foulkes of Cumnock
My Lords, it is in no way connected with the lack of intelligence or otherwise of the electorate in Scotland. However, can the Minister confirm that should the Scottish Parliament make a decision that it does not wish the referendum in Scotland to be held on the same day as the Scottish Parliament elections, the United Kingdom Government will honour its wishes? In asking that, I declare an interest as a Member of the Scottish Parliament.
Lord Wallace of Tankerness
I recognise the noble Lord’s interest. My right honourable friend the Deputy Prime Minister has made clear what we wish to do. There are many examples from many places around the world of elections and referendums taking place on the same day. With the first Scottish election taking place in the shadow of the Kosovo engagement and the second Scottish election coinciding with the Iraq war, I do not believe that there will be any question of the Scottish elections being overshadowed by the referendum.
Lord King of Bridgwater
Can my noble friend give an assurance that if voters are queuing to vote in large numbers, there is some chance of their being able to vote and having their votes counted, after the shambles under the previous Government?
Lord Wallace of Tankerness
I think that all sides of the House would agree that that it is very important that anyone who wishes to vote and turns up in time to vote should be allowed to vote.
Baroness Farrington of Ribbleton
My Lords, what will the Government advise people who believe that a referendum on an alternative voting system for the House of Commons ought to be considered in the context of proposals from the Government for elections to this place? Surely it is logical for people to be able to view things in the round rather than having to make a judgment about one-half of the issue.
Lord Wallace of Tankerness
As my right honourable friend the Deputy Prime Minister has indicated, there is no doubt that proposals will be brought forward in a draft Bill to consider the constitution of this House and how part of it, if not all of it, will be elected. However, we should now move forward to determine the mode of election to the other place. That was clear in our coalition agreement, and it was supported by the Labour Party—indeed it was in legislation—at the last election. The sooner we get it done, the better.
Equality Act 2010 (Consequential Amendments, Saving and Supplementary Provisions) Order 2010
(13 years, 9 months ago)
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Business
Baroness Anelay of St Johns
My Lords, as there is no speakers list for this afternoon's debate, it may be helpful if I say a few words about the expected running order. There are three Motions on the Order Paper today: two resolutions in the name of my noble friend the Leader of the House and a Motion in the name of the noble Lord the Chairman of Committees, to which two amendments have been tabled. My noble friend Lord Strathclyde will open the debate by moving the first resolution. It may then be for the convenience of the House to hear from the noble Baroness, Lady Royall of Blaisdon, the noble Baroness, Lady D'Souza, and then the noble Lord, Lord Dholakia, before other noble Lords rise to speak. At the end of the debate, it is expected that the noble Lord, Lord Brabazon of Tara, will respond to the issues raised that fall within the remit of the House Committee, after which my noble friend Lord Strathclyde will reply to the debate.
Baroness Farrington of Ribbleton
My Lords, will the noble Baroness, Lady Anelay, please explain why the noble Lord, Lord Dholakia, is included in the original list? He is a supporter and member of the government parties.
Baroness Anelay of St Johns
My Lords, we have courtesies in this House which mean that, when we are dealing with House matters, we hear from all parts of the House who have views to be represented. As a courtesy, which is the way this House has behaved, we have always ensured that the parties are able to express a view on House matters. In the House Committee, the parties are represented. That is why I have tried to assist the House. I assure the noble Baroness, Lady Farrington of Ribbleton, that during the course of the ensuing debate this afternoon, all noble Lords who wish to speak will have every opportunity to do so.
House of Lords: Allowances
(13 years, 9 months ago)
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Lord Strathclyde
House of Lords Allowance
That—
1.– (1) Members of this House, except any Member who receives a salary under the Ministerial and other Salaries Act 1975 and the Chairman and Principal Deputy Chairman of Committees, should be entitled to an allowance in respect of each day of attendance on or after 1 October 2010.
(2) “Attendance” means attendance—
(a) at a sitting of this House or a Committee of this House, or
(b) on such other Parliamentary business as may be determined by the House Committee.
(3) The amount of the allowance payable to a Member in respect of a day of attendance should be—
(a) £300, or
(b) if paragraph (4) applies, £150.
(4) This paragraph applies if—
(a) the attendance in question is away from Westminster, or
(b) the attendance is at Westminster but the Member elects that this paragraph should apply.
2.– (1) Accordingly, the following provisions should not apply in relation to expenses incurred on or after 1 October 2010—
(a) paragraph (1)(d) of the Resolution of 22nd July 1980 (office costs allowance),
(b) paragraph (1) of the Resolution of 25th July 1991 (day and night subsistence), and
(c) paragraph 4 of the Resolution of 10th November 2004 (overnight subsistence on visits away from the House).
(2) The limit on the expenses incurred from 1 August 2010 to 30 September 2010 which a Member of this House may recover under paragraph (1)(d) of the Resolution of 22nd July 1980 (office costs allowance) should be the amount obtained by multiplying—
(a) the number of days in that period specified by the Member, subject to a maximum of 40 days, and
(b) the appropriate amount for expenses incurred in that period (calculated in accordance with paragraph (3)(b) of the Resolution of 20th July 1994).
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, on 28 June, I made a Statement in this House on the merits of a new proposal for the remuneration of Peers. Today, I introduce two resolutions that will put the essence of that Statement into effect.
These resolutions will have an impact on all Peers and, while I welcome any interventions that Peers may wish to make during the course of my speech, I hope that noble Lords will intervene only if any clarification is required because my opening remarks will, I hope, lay out the ground and I will pick up queries when I wind up at the end of this afternoon's debate. I echo my noble friend the Chief Whip: there will be an opportunity for all Peers who wish to take part to do so.
We have before us today a final set of proposals for a new system of financial support for Members which, if approved, will come into effect on 1 October this year. This is not a new subject. The discredited parliamentary expenses regime is one that has caused this House much difficulty in the past, but today we have the opportunity to put that behind us and approve a new scheme that is direct, transparent and accountable, a scheme that is simple and not open to abuse, a scheme that will lay to rest the risk of the scandal of claims for so-called second homes that so damaged the House, a scheme that is fair in treating all Members alike.
When I made a Statement to the House, putting forward the outline of a radical new scheme for one single allowance to be paid on the basis of attendance on each sitting day, a number of comments were made on it. That proposal has now been considered by the House Committee, which brought its wisdom to bear and, as noble Lords would expect, has refined the proposal. The result is a sensible and workable scheme, which I have no hesitation in supporting today.
The scheme is set before your Lordships’ House today in the form of two resolutions in my name, and the Motion to approve the House Committee report in the name of the noble Lord, Lord Brabazon of Tara, Chairman of Committees. It may be helpful if I set out some of the detail of the proposals contained in the Motions on the Order Paper. I will do so partly on behalf of the noble Lord, Lord Brabazon of Tara, who will speak towards the end of the debate and, in doing so, will be able to respond to any questions Members raise about the details of the House Committee proposals.
The central element of my original proposal remains a single daily allowance paid on the basis of attendance on any sitting day. The allowance will be set at £300. This can be claimed if a Member has attended the House or a Committee of the House. Next, the reduced rate of £150 also remains a central part of the proposal. Paragraphs 3 and 4 of the resolution set out the circumstances in which a Member may claim the reduced rate. First, for attendances at Westminster, at a sitting of the House or a Committee of the House, any Member may elect, on a monthly basis, to claim the reduced rate,
“where they consider it appropriate”.
I am aware that the question of when a Member might claim this reduced rate was an issue of concern to some. As the House Committee report states at paragraph 6:
“It is difficult to arrive at specific criteria for measurement of a Member’s contribution to the work of the House”.
It will therefore be a matter for Members to judge their own circumstances in deciding whether it is appropriate to claim the full or reduced rate. Secondly, the reduced rate applies if the attendance on any day is on authorised business away from Westminster. Members attending such business will already be in receipt of reimbursement for the costs of accommodation, food and transport. These two categories of authorised business for which the reduced rate applies are the same as those for which Members may claim financial support under the current system. They are travel on official Select Committee business or on parliamentary delegations to certain interparliamentary assemblies; and travel in connection with certain authorised business such as CPA and IPU.
The new scheme, if approved, will come into effect on 1 October. Up to that point, the current scheme continues to have effect. In respect of the additional office costs allowance, the resolution makes it clear that Members may continue to recover office costs up to a maximum 40 days per year while the House is not sitting. This will apply for the period from 1 August to 30 September. The House Committee decided that this provided a degree of certainty to those Members who employ staff and who may otherwise be affected by the scheme agreed today. I have accepted that advice.
When I made my Statement to the House in June, several noble Lords raised the question of whether the new allowance would or should be taxable. Tax is not paid on the current expenses system on the basis that membership of the House is neither an employment nor an office. Any change to this position would require primary legislation and reconsideration of the level—£300—at which the attendance allowance is set. The Government currently have no plans to legislate to change the tax status of the scheme that is on the table today. If and when there is full reform of the House, the whole basis of financial support would need to be reviewed.
The issue of travel expenses is properly House Committee territory, but it may be helpful if I set out, on behalf of the noble Lord, Lord Brabazon of Tara, the recommendations on travel made by the committee. In line with the SSRB and the Wakeham group reports, the committee recommended that car parking and road tolls should be treated as “permissible travelling expenses” but that Members should not be able to claim for the London congestion charge. Provision for this is made in the text of my second resolution. Also in line with the SSRB and the Wakeham group reports, the committee recommended that, where Members do not make use of the House of Lords travel credit card, travel expenses should be reimbursed only on the basis of receipts or tickets. Equally in line with those reports, the committee recommended that claims for vehicle mileage must be accompanied by details of the individual journey and that only one claim per journey per vehicle can be made. The committee recommended that only those Members who live outside Greater London may claim reimbursement for travel expenses to and from Westminster.
The committee made a number of recommendations on the class of travel for Members and for Members’ spouses, civil partners and dependants. Members may be reimbursed for train travel up to the cost of a standard open ticket, whatever class they ultimately choose to travel. The committee recommended that the same rules should apply in respect of travel by Members’ spouses, civil partners and dependants.
Lord Faulkner of Worcester
This is a quick question. Does the description,
“ceiling cost of a standard … open ticket”,
apply after the application of a senior citizen discount or any other discount card that Members may hold or does it apply only to the standard open ticket?
Lord Strathclyde
My Lords, the standard open ticket is the price ceiling on which all claims will be judged.
That neatly brings me towards the end of my words. The committee recommended that the new arrangements be put in place for the duration of the present Parliament. I fully support that approach.
This has been a long and at times difficult journey to reform the discredited expenses regime, but it is a journey that is coming to an end. I hope that today the House will approve the Motions before it so that the reforms can be made and, when the House returns in October, we can start afresh under a simpler, more transparent allowance scheme that can command public confidence. I commend the scheme and I beg to move.
Lord Stoddart of Swindon
Before the noble Lord sits down, will he say what the position is with regard to travel by standard class? If Members are travelling with officials who are entitled to first-class travel, will the officials be able to travel first class while Members of this House and Members of the House of Commons have to sit at the back?
Lord Strathclyde
My Lords, the situation that the noble Lord, Lord Stoddart of Swindon, suggests will never arise.
Baroness Royall of Blaisdon
My Lords, I strongly support the Government’s resolutions and the House Committee’s report. The House Committee report puts forward changes to the system of financial support for Members of your Lordships’ House, based on proposals from the Leader of the House. The report rightly describes them as important changes. I agree with these proposed changes. I also agree that the changes proposed by the ad hoc group set up by your Lordships’ House and chaired by the noble Lord, Lord Wakeham, form a marked move away from the current system of financial support for Members of this House.
The report of the ad hoc group sets out in some detail how we have got to this point. The background to the issues is also summarised in the report from the House Committee, so there is no need for me to repeat that history. This has been a long and complicated matter, and I add my thanks to all those involved who have worked so hard to get to the point where what is on the Order Paper today is, I believe, the right way forward.
First and foremost, I thank the noble Lord, Lord Wakeham, and all the other Members of the House who served on the ad hoc group that was appointed by the House to examine these issues in the wake of the report from the Senior Salaries Review Body.
I also pay tribute to the Leader of the House for the decisive action that he has taken in bringing forward the alternative proposal, set out in the Wakeham report, that forms the resolution and the report before the House today. I know from my time as Leader of the House, and in Government, that these are very difficult issues to address, and I believe that the noble Lord has performed a considerable service for this House and its Members in bringing forward the proposals that are before us today.
In considering these proposals, we need to bear in mind two fundamental points: the nature of this House, and its cost. On the first point, I can do no better than to quote from the introduction to the report of the ad hoc group:
“Membership of this House is not an office nor is it an employment. From their appointment to the House, Members are unsalaried volunteers and they offer their experience, time and commitment freely because of a strong sense of duty and public service. The fact that the House of Lords is an unsalaried House is fundamental to its nature and character; to how and what it does as a House, and to the issue of financial support to enable Members to carry out their Parliamentary duties and to discharge their Parliamentary responsibilities”.
That is exactly right.
The second point concerns the cost of this House. The ad hoc group says that the cost of your Lordships’ House is “relatively low”. Again, that is exactly right. The report points out that not only are the total costs of this House currently less than one-third of the costs of the House of Commons but the cost of the current expenses scheme for Members of this House is, at around £19 million, just 15 per cent of the running costs of this House and a fraction of the comparable cost of £150 million in the Commons. An unsalaried House, a low-cost House—that is where we are.
We all accept that we are in a time of considerable economic difficulty. We may well—indeed, we do—have serious political disagreements with the coalition Government about how best to resolve these matters, but all sides accept that we are in straitened economic times. I welcome, therefore, the efforts made by the SSRB, the Wakeham group and the Leader of the House to reform the old system of expenses in your Lordships’ House, which, as the ad hoc group says,
“grew up in piecemeal fashion over time”,
while keeping costs under control.
Both the full debate in the Chamber on 14 December last year and the responses of Members detailed in the ad hoc group’s report made it clear that many Members of your Lordships’ House had real reservations about the SSRB’s proposals. Many believed that what the SSRB proposed was unnecessarily complicated, cumbersome and bureaucratic. The Wakeham group sought to deal with those issues, but at the same time recognised that the context for them had changed—first, because of the proposals made in March this year by the Independent Parliamentary Standards Authority for changes to the system of allowances in the House of Commons, and secondly because of the changed political context following the outcome of the general election, particularly the proposals from the coalition Government for further reform of your Lordships’ House.
Accordingly, the ad hoc group recognised that the emergence of an alternative proposal would be worth consideration, reducing the level of support currently set aside for overnight accommodation and combining it with the daily allowance as a single allowance claimable by all Members. That is the essence of the proposal before us today in the report from the House Committee and in the Motion from the Leader of the House. As the ad hoc group itself says:
“If this change were to be made, it would be simple, easy to implement, easy to administer and easy to explain to the public”.
I agree.
I am of course aware that not everyone in the House agrees, including on my own Benches. I know that there are real concerns about equity, about the impact on Members travelling to attend the House from far distances and about other points. I understand those concerns; I respect those who feel them, and who either have voiced them to me privately or within our political group or may voice them in the Chamber today. But no system of financial support is perfect. All systems of financial support have to strike a balance between comprehensiveness and simplicity. I believe that the package in front of the House gets that balance right.
Baroness D'Souza
My Lords, it has indeed been a long journey but we are very nearly there. The two resolutions tabled by the Leader not only clearly define the parameters of legitimate claims but take us into new territory by granting all Members of your Lordships’ House an equal allowance. As has been said, but is worth saying again, this single move will deter accusations of fraudulence—if Members of this House attend, they are entitled to an allowance. It is very simple.
I know that there is discontent among some Members, particularly as regards travel. However, as has already been said by the noble Baroness, Lady Royall, no system can be perfect. Nor should anyone doubt the struggle by the Wakeham group to achieve a reasonably fair and transparent system while taking Members’ concerns into account.
I am somewhat reassured by the tentative suggestions in conversations outside this Chamber that in time special cases could be looked at when for example, a given Member is unable to attend due to infirmity and suffers, or is likely to suffer, genuine hardship as a result. That is an avenue that needs to be explored. Perhaps the fact that a maximum of 40 days of secretarial allowance is offered for the two months of August and September is some compensation to those who more than regret the abolition of this allowance.
As has been said, the Motion assumes that this level of allowances will remain in place for the duration of the current Parliament. However, that should not rule out—it does not do so, according to the last paragraph of the House Committee’s report—the possibility of a review at an earlier stage should the economic climate change significantly.
The IPSA rules in the House of Commons have caused some Members hardship. The new allowances regime in this House will do likewise. However, in these days of stringency, we cannot do other than expect and accept cuts. All in all, I suspect that many in the House are relieved that the rules are now clear and that the matter of financial support is settled. I will therefore support the Motions in the names of the Leader of the House and the Chairman of Committees, and I thank all those involved in forging this new regime.
Lord Dholakia
My Lords, I thank the House for its courtesy in allowing me to contribute on behalf of my colleagues to this important debate. I shall be brief.
Let me say straight away that we support the Motion. I am delighted that it has the support of the noble Baroness, Lady Royall, from the Opposition. The matter of allowances paid to Peers has been discussed by my party on a number of occasions. My noble friend Lady Scott participated in the committee of the noble Lord, Lord Wakeham. The present system is cumbersome and my colleagues often felt uncomfortable about claiming allowances which were often not backed by proper receipts. I am also aware that there have been various interpretations of what constitutes a main residence. Many new Peers have relied on the advice of other colleagues, with the result that we have subscribed to a system which would not be accepted in any other institution.
It is therefore right that we subscribe to a system which is simple to operate, clearly understood and commands the confidence of both the public and Parliament. I well recollect my discussions with my noble friend Lord McNally as early as 1997, when I was introduced into the House. He then advocated a system of per diem allowances, and I am glad that we are referring to that matter today.
However, there remain anomalies in the proposed system. I hope that the noble Lord, Lord Strathclyde, will look at this to see what we can do to iron them out. I am uncomfortable that there would be two types of allowances—£300 and £150. The administration of a system which allows discretion would be difficult to operate. A uniform allowance system for all noble Lords is appropriate, and it should be left to individuals if they wish to claim or not. We do not wish to be in a position whereby the newspapers can prey on who claims what. There have been examples in the press whereby reporters have waited outside the railings of the House of Lords to count how long a noble Lord has been in the House. This is not something that I welcome.
On the two amendments in the names of my noble friends, I say that there is substance in what is recommended, and I hope that we will look seriously at their comments on the amendments.
Lord Wakeham
My Lords, I support the Motions.
As noble Lords will be aware, I chaired the ad hoc group of Members which was established to consider the recommendations of the SSRB review and advise the House Committee on how they might be implemented. It may be of assistance to the House if I say a few words about that process.
However, I first thank the Members of that committee who worked with me. It was not what some people might refer to as a patsy board. We had a series of vigorous discussions and reached conclusions, but I would not pretend that the group had an easy task, and I hope that our report has made a useful contribution to the debate. I am pleased that most of the group’s recommendations have been accepted by the House Committee and by the Government. We placed great value on conducting as thorough and wide-ranging a consultation of noble Lords as possible, and we were rewarded—if that is the right word—with a wealth of views, diverse though they inevitably were.
If I was not aware at the beginning of the process, I was certainly aware by the end of it that no one would be able to design a system of financial support which would meet with universal support. Inevitably, any change to the current system would create winners and losers.
In carrying out our report, the group stuck to the principles and structure of the SSRB review. That was our remit from the House and it was right to do so. I believe that the recommendations in the group report represented a much needed adjustment, simplifying to an extent the SSRB proposals while keeping their core and remaining cost-neutral to the current scheme.
Yet the further we went in preparing our report, the more I was convinced that, in an ideal world, we should put in place a still simpler scheme rather than increasing the existing scheme’s complexity and attendant bureaucracy. The case for a simpler scheme grew stronger with the coalition Government’s announcement of their intention to reform your Lordships’ House for the start of the next Parliament. It seemed to me less and less sensible to overhaul the current scheme with more complex arrangements, possibly on a very temporary basis, particularly when the political consensus appeared to be that a reformed House would in fact be a salaried House. For this combination of reasons the group, with one Member dissenting, decided to invite the House Committee to consider the possibility of,
“a simplified allowance, to replace the daily allowance … recommended by the SSRB”.
We thought that such an allowance,
“might operate for the life-time of the … Parliament”,
until the “reform of the House” and that such a scheme would be “simple”, easy to operate and,
“easy to explain to the public”.
On publication of the group’s report, the Leader of the House put forward his proposals endorsing such an approach.
I shall mention one further point, which is on taxation. I welcome and agree with the opening remarks made by my noble friend the Leader of the House. The SSRB suggested in its report that,
“in principle fees for attending the House of Lords should be taxable”,
and that,
“until legislation is amended to bring … the House of Lords into the tax system, the fee should be set at a lower level so as to make an approximate allowance for the absence of tax”.
I understand that officials from the House authorities met officials at HMRC to confirm that it was their view that, in the absence of legislation, the fee or allowance would not be subject to tax. The level of the allowance is set on the assumption that it is not taxed. If it were to be so as a result of new legislation, the level would have to be looked at again. Speaking entirely personally, I do not think that the Inland Revenue has the slightest desire to get involved in the complications of taxing at all. It does not think that it is losing a penny piece by these present arrangements.
As I have said, I believe that there is no perfect solution; my noble friend’s proposal is, however, a fair solution. It is straightforward and sweeps away the expenses system as it stood. It will be cheap to administer and easy to explain. While I regret that some noble Lords will be worse off, I believe that the proposed level, combined with the reimbursement of travel costs, will mean that all noble Lords will have sufficient support to enable them to contribute to the important work of this House. On that basis, I agree entirely with my noble friend’s proposals.
Lord Tomlinson
My Lords, the Statement of the noble Lord, Lord Strathclyde, on 28 June was in my opinion deficient in a number of respects. It was not fully accurate. Today’s resolution tabled by the noble Lord rests on that, which I believe is a weak foundation. I shall give three examples of where his Statement of 28 June was inaccurate. The noble Lord said that,
“Lord Wakeham was invited to lead an ad hoc group to consider, consult and advise on the implementation of a new system of financial support”.
That is not what we were asked to do. The remit for the ad hoc group established following the Motion agreed by the House on 14 December—as is shown at paragraph 3.6 of the ad hoc committee’s report—was that it should,
“consider and consult on issues in the SSRB report and advise on their implementation”.
On 14 December 2009, the House also agreed that the principles and architecture of the SSRB should be part of our mandate.
Secondly, the noble Lord, Lord Strathclyde, said that,
“the group suggests an alternative option, a simplification of the SSRB’s approach to overnight allowances”.—[Official Report, 28/6/10; col. 1512.]
In fact, the ad hoc group had completed its report and was persuaded to reopen it following certain discussions that took place in the House Committee involving the Leader of the House. The genesis of the new idea was not in the ad hoc committee but elsewhere, and it was that which led to the paragraphs in the report to which I added my note of dissent—in particular, my dissent to recommendation 17 in the ad hoc committee’s report. That arose from a reopening of the report after the committee had finished its deliberations. Recommendation 17, however, did not suggest an alternative system. It said that,
“consideration might also”—
three very important words—
“be given to … putting in place a simplified allowance to replace the daily allowance and the overnight allowance”.
That brought into play the very views that the Leader of the House had been discussing with the House Committee, on which the ad hoc committee never had a formal paper. However, there was a majority view that perhaps we should leave the matter open in the recommendation, which led us to say that,
“consideration might also be given”.
Thirdly, the noble Lord, Lord Strathclyde, also claimed that the proposal was broadly cost-neutral compared with the existing scheme. However, the extension of what has been seen as a payment for the legitimately incurred costs of overnight stay in London and extending it to all Members of the House destroys the pretence of cost-neutrality. On my estimation—and I have checked this with the Finance Department—it adds possibly £1.5 million to the cost of the scheme. If we really think that the proposal for a payment of £150 is going to recoup that £1.5 million, I suggest we are living in cloud-cuckoo-land, but that is what will need to happen in order to achieve cost-neutrality.
Perhaps I may also say, more in sorrow than in anger, that when on 28 June I raised my reservations, in less detail than I am doing today, the noble Lord, Lord Strathclyde, rather disingenuously, said to me, a member of the ad hoc committee—I assume still compos mentis, following its proposals and making some contribution to its work—
“If the noble Lord reads the document, as I have done”.—[Official Report, 28/6/10; col. 1518.]
I not only read it; I helped to prepare it. I hope that I have demonstrated that I have read our report accurately and not in the rather inaccurate way in which the noble Lord did.
I turn to my specific objections to the new system. The first one is on grounds of equity. It is not a demonstration of equity to say that you treat everyone the same when the costs of attending your Lordships’ House are vastly different. A noble Lord who lives around the corner and can walk to the House is being treated in exactly the same way as another who lives in the furthest reaches of the country and who, in order to attend here, is forced, having no option whatever, to get accommodation in London. That is not equity; it makes a mockery of the word. In mocking equity, it also produces a potential threat to the regional balance in this House—a regional balance that Members of this House hold to be important and which was part of the remit given to the SSRB.
Those are two fundamental questions, and there is the question of costs which I have already mentioned. There are still taxation implications but I shall not go into them further. We have seen in this resolution a concern about a problem with our expenses regime but as far as I can tell from reading the press, in each and every instance there was an allegation of somebody claiming a London overnight allowance to which they were not entitled. And so what do we do? We give everybody the London overnight allowance, wrap it all up together and call it a single per diem. I do not think that that is either fair or right. I am also very fearful that those who tell us that that will satisfy public opinion and the press will live to regret their optimism. I can see no basis on which this system will or should satisfy public opinion, and there is no basis on which this system should or will satisfy the media. It is the antithesis of the transparency that we were talking about. We will regret it and the system will not have my support.
Baroness Harris of Richmond
My Lords, it may be appropriate at this juncture to speak to the amendment in my name to which we will come later. In doing so, I declare an interest as one who travels weekly to your Lordships’ House. I am also a recipient of a senior railcard.
My amendment refers to paragraph 30 on page 8 of the report and I shall speak to it for two specific reasons. First, like the noble Lord, Lord Tomlinson, I believe that it discriminates against those of us who travel from the far reaches of the United Kingdom to participate in the work of your Lordships’ House. For those of us who are old enough to use a senior railcard it is possible to purchase a first-class flexible ticket for just below the cost of a walk-on standard fare. That is fine for those who have a senior railcard. However, for younger Members of this House who live in the far reaches of this country and who do not have the advantage of age, the difference between the cost of the two tickets is enormous.
That is unfair and ageist. It takes no account of those younger Members who might have disabilities so it is discriminatory. The House Travel Office advises me that anyone without a railcard who wishes to purchase a first-class ticket would have to book well in advance and keep to that date and time to be within the guidelines. As your Lordships know, it is impossible to say when the House will finish its business, so it would be extremely difficult to book ahead. Other Members may wish to address that issue. If, for instance there is a difficulty on the day of travel, for whatever reason, and a pre-booked advance ticket has been purchased that ticket will be invalid if it is not used and the new ticket will have to be purchased at the cost of the full walk-on standard fare. It will then be a battle to try to persuade IPSA to refund the original fare. That moves me on to my second point.
I was perturbed that it was IPSA’s solution to travel for Members of the House of Commons that prevailed with the House Committee for your Lordships' House. I had understood that this House generally accepted the SSRB rulings, not those of IPSA, which was set up to deal with arrangements in another place. Indeed, on page 7 of the report, it is the SSRB which advises on all other parts of our travel expenses, and the House Committee concurs with its proposals in those parts of the report. I find it strange, therefore, that we should suddenly find it introducing IPSA into the mix. Paragraph 30 is the only part of the report in which IPSA appears. I find it invidious that its proposals are preferred to those of the SSRB. That creates a two-tier membership of the House.
I thought long and hard about seeking the House’s endorsement for my amendment. In the almost 11 very happy years that I have spent working in this House, I have never once challenged the will of the House Committee, and I do so today with great sadness. I know that many hours of work went into the report, the main conclusions of which I am very happy to endorse—except paragraph 30. It is that simple but important change that I wish to revisit, and I sincerely hope that the House Committee will feel able to do so.
Lord Williamson of Horton
My Lords, I was a member of the ad hoc group appointed to consider and consult on issues in the SSRB report and to advise on their implementation. Although there were moments when I felt that membership of the group was a cruel and unnatural punishment, on the whole, I concluded that the work was well worth while and contributed to the improvement of the arrangements for the financial support of Members. I shall say a very few words about the group's report, in so far as it is still relevant to the Motions before the House today, and then comment on the recommendations of the House Committee and the Motions on the Order Paper.
Although events have moved on since the ad hoc group’s work and report, it is still worth noting that, first, the group consulted widely, and the many references to the views of Members are well based. We received 89 written submissions from Members and held a whole series of consultative meetings, with members of the group present, to take views. We also produced a survey on overnight accommodation, to which 473 Members replied. Our report is therefore well informed.
Secondly, the SSRB was rightly concerned that the proposals should ensure that no Member was prevented from attending and playing a full part because of lack of financial resources, and that the diversity of the House should be maintained. The group considered that to be an important principle, and it is obviously relevant to our consideration today. It would make no sense to accumulate so much political experience and other expertise in this House and then to reduce its efficiency, particularly since its Members receive no salary or pension and, to that extent, work for nothing.
Thirdly—my last point about the group’s report—we sought to avoid an excessive administrative burden and to ensure that the cost to taxpayers of the financial support to Members was held down to reasonable limits. It was for that reason that we proposed an optional and interim alternative of £100 a night for the overnight allowance. We noted in the report that that would be considerably cheaper and simpler to administer than the current arrangements. Indeed, we estimated that the combined effect of the SSRB proposals and the £100 a night interim allowance would reduce the current cost to the taxpayer by about £2 million.
Lord Methuen
My Lords, I think it may be appropriate that I speak to my amendment at this stage. In so doing, I declare my interests as a member of the British Group of the IPU, although I have not attended any of its delegations, and as a participant in the Lord Speaker's Peers Outreach to Schools programme.
This amendment aims to remove an anomaly in the proposed financial support for Peers participating in external parliamentary activities such as the CPA, the IPU, the BAPG, the BIPA and similar organisations, and the Armed Forces Parliamentary Scheme and the Police Service Parliamentary Scheme, and refers to paragraph 22 of the House Committee’s report.
Paragraph 3.17 of the SSRB proposals covers these activities:
“we recommend that the House consider whether some or all of these activities should entitle Members to claim a daily fee (and any other relevant allowances) subject to approval as ‘authorised Parliamentary business’”.
Paragraphs 4.22 and 4.23 of the ad hoc group’s report, which are headed, “Away from Westminster”, noted Members’ disquiet about the arbitrary and inconsistent financial arrangements covering these activities. In paragraph 5.22, it recommend new arrangements “as may be agreed” to be presented to the House Committee for approval in due course, which is what we are doing now. Annexe 5 to the report is an indicative list that is effectively the same as that included as Annexe A to the report that we are debating.
The second table in Annexe A covers the external activities of Peers with organisations such the CPA, the IPU, et cetera and the Armed Forces and police schemes, and it is that which my amendment alters. Noble Lords will notice that the second table in Annexe A precludes the payment of any allowances for days on which the House is not sitting. I have attempted to gather information about the number of Peers involved in these activities. With respect to BIPA—the British-Irish Parliamentary Assembly—there were about 15 days of assemblies and meetings of various types attended by some 17 Peers. I believe that some of those meetings were on Sundays. They were held at locations within the British Isles, Brussels and Stockholm. I am unable to break them down further into recess and term time.
In 2009, for the British group of the IPU, 12 Peers travelled in the recess and three during term time. About 70 per cent of the BAGP’s activities were during a recess. I do not have figures for the Armed Forces scheme. A noble friend has told me that he attended an attachment with the RAF on a Thursday, Friday and Saturday. Only the Thursday was a sitting day for which he could claim attendance. I believe that this shows the bizarre nature of the current arrangements.
Noble Lords should note that the outreach programme today has similar restrictions. However, I am glad to say that the House Committee has seen fit to remove this restriction in the new financial arrangements proposed to come into effect after the Recess. Living in Derbyshire, for instance, there is no way in which I can visit a local school and attend the House on the same day, so I am pleased that this change has been made. It is unreasonable that noble Lords who are prepared to undertake the activities listed in this table on behalf of the House when it is not sitting should be penalised in this manner. My amendment corrects this situation. I hope that I will have some support for this amendment.
Lord Grenfell
My Lords, I have a lot of sympathy for what the noble Lord, Lord Methuen, has said in his amendment, but I wish to address the question of the all-party parliamentary groups, of which I am a great supporter. The country groups—I do not exclude the others but my experience is with the country groups and I declare an interest as an officer of three of them—are great added value for your Lordships' House because they bring us into contact with the Parliaments and Governments of other countries.
However, there seems to be a problem which may be an inconsistency. Perhaps the noble Lord could clear it up. Under “Type of business” in Annex A, it says that the daily allowance would be available for,
“Committee Visits and official business
Members of parliamentary delegations
Travel as a Representative of the House
Lords outreach programme”.
But paragraph 21 says:
“There are three categories of such business as follows”,
for parliamentary business away from Westminster.
Paragraph 21(b) refers to,
“travel in connection with certain authorised business, such as CPA and IPU business”.
Unless that covers the activities of the all-party groups, we have a problem. Will the Leader of the House tell us whether the phrase,
“such as CPA and IPU business”,
would cover all-party groups because so many of them are in relation to the IPU? We need to know that. A lot of Peers would like to go on some of these all-party group visits but are somewhat deterred by the fact that when they are away they are deprived of some of the allowances to which they feel that they are entitled.
Lord Sewel
My Lords, a centrepiece of the proposals, which perhaps causes some of us great difficulty, is the abolition of the separate overnight allowance and its wrapping up in a uniform fee of £300 for all Peers. Before I speak on that, I want to speak briefly about the matter of the £150 dealing with committee visits and delegations. For some years now I have been a member of and have chaired various sub-committees and committees of your Lordships' House. I have found an understandable reluctance among some Peers to travel away from Westminster on specific days when the House is sitting. My fear is that the proposals before us today will increase that reluctance. Can we have an assurance from the Leader of the House that if it is evident that it is becoming more difficult for Peers to go on delegations and, for example, committee visits to Brussels on a day basis, that that will be looked at fairly quickly? We get enormous value out of short visits to see the Commission and other European institutions, so it would be a sad thing if those were to attenuate over time.
Let me return to the main issue. On 28 June the noble Lord, Lord Strathclyde, in referring to the advantages of the £300 uniform fee, said:
“How much Peers spend on each item would be entirely up to them”.
Yes, but that is not the entire story. He also said in summing up that one of the major advantages would be that:
“This will mean a reduction in the amount that some Peers have claimed in the past”.—[Official Report, 28/6/10; cols. 1512-13.]
Again, yes, but that is not the whole story. First, how much real choice do Peers have on how they spend the daily allowance? There is actually not much choice at all if you live a significant distance from London. If you live 300, 400, 500 or 600 miles from London—I should declare an interest as I live in Aberdeenshire, which is just over 500 miles away from Westminster—and come down on a Monday, you are here for the rest of the week. You cannot go backwards and forwards, so you have to have accommodation for an entire week.
I do not think that Peers should be expected to live out of a suitcase. It is quite reasonable that they should be able to rent or obtain a modest one-bedroom flat. The going rent for that, on checking with estate agents and The House magazine, is somewhere in the region of £350 a week, which is £18,200 over a year, plus council tax and utilities. That is approximately £20,000 a year that someone needs to pay out in order to maintain a presence in London, which is an absolute requirement to attend your Lordships’ House. It is not a matter of choice; it is an imperative and a requirement.
Under the proposals, a payment of £300 over 145 sitting days—over a five-year Parliament there are actually fewer than 145 sitting days, but we shall take that figure for the moment—produces support of £43,500 a year. Those living a significant distance from London are locked into a system where almost 50 per cent of their total possible support will be taken up by the housing costs that are a pre-requisite of attending your Lordships’ House. That is not something which is faced by those whose primary residence is in London.
The noble Lord, Lord Strathclyde, said that some will lose. Yes, that is absolutely true, and we pray in aid austerity to defend it, which is reasonable. We ought to be prepared to make sacrifices in a situation where our fellow citizens are making sacrifices. So let us look at the 24-hour rate. The claimable amount for those whose principal residence is outside London will go down from £335 to £300 a day, which on a weekly basis is a small reduction of £140 a week. For those whose principal residence is in London, it is a move from £161 a day to £300 a day. That does not seem to be a contribution to austerity. How is that figure squared?
I recognise that there were two problems with the overnight allowance: some people did not tell the truth; and some people were confused because we had never defined what was a principal residence. We went through the pain of establishing a robust, common-sense and sensible definition of what is a principal residence. That is now followed-up by a paper trail by which you can clearly demonstrate that your principal residence is outside London. Why do we not use the robust system that we have introduced?
As the noble Lord, Lord Tomlinson, said, equity does not mean that you treat everyone the same but that you recognise the differences that people have to face in order to perform the same task. That is the essence of the problem. I accept that what is proposed has been brought forward in all honesty, that it is not perfect but deals with a number of problems, that everyone is treated the same and superficially it looks fair and simple and provides rough justice. My problem is that it has within its heart the possibility for great injustice, and that has not been addressed.
Lord Marlesford
My Lords, I support the proposals made by the House Committee and introduced by my noble friend the Leader of the House. I should like to offer some brief comments which, to some extent, relate to what the noble Lord, Lord Tomlinson, said—although they do not answer his questions and probably will not satisfy him.
First, I underline, and certainly welcome, the simplicity and lack of ambiguity in the new scheme. It will reduce to an absolute minimum the administrative cost and the bureaucratic burden on both the House and Members. I should point out that IPSA, which is tormenting MPs with its arrogance, insensitivity and pettiness, is costing £10,000 per MP per year to administer. It must be one of the most expensive payroll systems in the world. Newly-elected MPs are already expressing their resentment and irritation with it. It may well deter those who might otherwise consider becoming MPs in the future unless they are either independently wealthy or have a very low earning capacity in the outside world. I hope we never allow IPSA anywhere near the House of Lords.
Secondly, the new system may be rough and ready. It is not able and not intended to deal with individual circumstances: that would be the way which leads both to scandal and to IPSA. Some of us who live outside London will lose out, but so be it. On balance it is sensible, economical, transparent and fair.
Thirdly, to those who suggested the allowance should be taxable, I point out, because this is how the tax system has always worked, that that would enable the wealthiest with plenty of outside resources to benefit by arranging with their accountants, and through dialogues with inspectors of taxes, for their expenditure to offset the allowance under the appropriate tax codes.
Fourthly, to those who still believe that the allowance should be subject to receipts, I point out, as I did in my evidence to Cockburn, that a system based on actuals, as used in the business world, depends on three steps: first, checking the expenditure was made; secondly, ensuring that it was necessarily and exclusively related to the business function performed; and, thirdly, that the level of expenditure was appropriate to the status of the employee. These steps are the function in business of a line manager. We do not have line managers. To ask officials of the House of Lords to act as our line managers would be unreasonable, inappropriate and impractical.
Fifthly, the sums proposed—a maximum of £300 a day to cover all the cost of participating—are far from extreme. I believe that the public are much too sensible to compare this, for example, with the minimum wage. The maximum amount that one could receive would be £45,000 a year, but, on the basis of the average number of days on which we sat during the previous five years, the average would be £43,500. Let us compare that with three other reasonably comparable fields—I am sure that colleagues will have lots of other examples that they could give. An MEP currently receives a salary of £78,000 a year, a daily allowance amounting to £39,000 for a 160-day year, a general expenditure allowance of £42,000 and allowance for parliamentary assistants of £193,000. That makes a total of £352,000 per MEP, of which only the salary element is taxable. In addition, MEPs receive pensions and medical costs.
Three hundred pounds a day would pay the standard fee charged by a medical consultant, an accountant or a solicitor for about one hour. The international rate for a keynote speech of the sort which many Members in the House are experienced in making has for many years been approximately $10,000, which is £6,500 or the equivalent of five weeks’ worth of the proposed attendance allowance in the House of Lords or two-and-a-half weeks’ worth at a 50 per cent tax rate.
Let us end this prolonged discussion of our financial support so that we can focus our time and efforts on the parliamentary role for which we are privileged to be here.
Lord Soley
I shall speak not just on the matters before us today but also the way in which we address them. We are doing a bit of what we have done in past—it happened in the House of Commons, too; that is, amending on the Floor of the House. It is that which gets us into so many difficulties. This problem started in the House of Commons some 40 or 50 years ago. It blew apart with the passage of the Freedom of Information Act. That Act affected us here far less, but it is very important.
We need to emphasise, first, that this House is cheap to run, as my noble friend on the Front Bench said, not just by British but also by international scales of comparison. We need to emphasise, secondly, that we are unsalaried and, thirdly, that we do a very important job. We are part of the democratic system of which we should all be proud. That is why I have been so acutely concerned during the past few years by the disgrace brought on politicians by the collapse of a system which none of us could justify. Is today’s solution an absolutely good one? Of course it is not. Is it absolutely fair? Of course it is not. However, we need to look at it as part of a process, which is what I said when I last spoke on this matter. My concern is that if we go on doing what we have been doing, either in the House of Commons or here, and try to amend our income system on the Floor of the House after one report here and another there, we will continue to make mistakes.
For the past four or five years, I have argued against defining “first home” or “second home”, mainly because, in the British system of doing it, you invariably run into traps and dangers which you had not envisaged. I do not attempt to justify what David Laws said, but I ask what on earth we are doing in creating a system where it is legitimate and proper for the press or anyone else in public to ask, “Who are you living with? What is your relationship with them?”. We should not go down that road.
My noble friend Lord Tomlinson explained in a very good speech the problem of geography. I am with him on the principle, but make the point that an awful lot of people make the mistake of believing that we should say “London”—I notice how often “London” comes up. The reality is that you can get to most of the cities around London—Oxford, Reading, Chelmsford and so on—more cheaply and very often more quickly than you can get to the outer reaches of London. So that is not fair either. If you want to go to Oxford you can slip down the road to Victoria and catch a bus every 20 minutes, any time of the day or night, for £8.
IPSA in another place has suggested—I know that IPSA is not popular and I will come back to that in a second—that there needs to be another geographical way of measuring this. I am not convinced that geography is the best way of determining the question of how, as a couple of my noble friends have pointed out, we ensure that those people who come the furthest distance are given sufficient support to continue doing that.
That brings me back to the problem of how we define this. I know that IPSA is not popular. I know that from talking to colleagues on all sides of the House of Commons and from common sense. I have spent some time talking to Sir Ian Kennedy. He also knows that it is not popular. We need a system that enables us to address these problems over a period of time, getting it all right without having to have an occasional report, which we then present to the House and amend on the Floor, and then wonder why it goes wrong. I understand the feeling about IPSA and my guess is that, in the long run, it will get there but it is painful while it is learning not to make mistakes any more. If we are not to have IPSA I suggest that we need a committee of the House to look at all the anomalies and unfairnesses and address them as we go along—not in one grand slam every now and then. We need to do that on an annual or biannual basis.
Many other Parliaments have these problems. It will be a great comfort to my noble friend Lord Tomlinson to know that, when the Germans tried to pass their system over to an independent body for adjudication, the German constitutional court overruled them and said, “You can’t do that because the position of representatives, elected or otherwise, is too critical to the constitution to have another body decide it”. That is a great addition to the armoury of my noble friend sitting next to me. However, if we are not going to go down that route we need to find a better way than to amend reports on the Floor of the House because that is where it goes wrong. I have watched this happen in the House of Commons on a number of occasions.
We all had legitimate gripes about that system. It was a bad system in many ways. It often did not compensate Members in the way that they needed to be compensated for the work that they do, and exactly the same applies here. People talk about distance being unfair. I have raised the issue before that if you have a business such as a lawyer’s office or you are in academia or whatever, that gives you the administrative backup that you need so you may not need to employ a full-time person as others of us do. That is not fair either. These are complex issues that do not get sorted out on the Floor of the House in a big-bang solution every now and then.
What we are being offered today is a way of dealing with our immediate problems in a way that does not tie us up in this incredibly difficult business of defining a first or second home. We should remember that a number of noble Lords have already said that they would end up spending more time away from their primary home—which nobody questions is their primary home—because they are doing other things as well or have family commitments. Therefore, according to the rules that we have practised just recently, they would not be eligible to claim. In at least one case I know that a noble Lord has stopped claiming. There is no nice simple option. What we have today as the leaders of the Conservatives, Labour and the Cross Benches have said, is a straightforward system that is pretty robust and which we can use, but I ask the House to consider how we do this in future.
There has been a lot of talk about the media. It has to be said that the media did what they should do in exposing some of the abuses in the House of Commons and here. But—and it is an important but—the majority of MPs and certainly the majority of noble Lords in this House behaved perfectly well. There was a danger last year in my judgment that the media would inflict acute damage to the concept of democracy and to our democratic institutions. If you create a situation in which politicians are regarded with contempt—and they are never going to be wildly popular or the most popular people around—you create dangers. Curiously enough, it is that House down there and this House here that actually defend the freedoms that the media put into effect, and it would be quite good if every now and then the media remembered that. In the past 12 months, I wrote three articles on why we needed to change the existing system—one for the Sunday Times, one for the Daily Telegraph and one for the Times. None of them published them, and one of them actually said that it did not want to publish my article because it did not agree with it! Yet it is very largely what we are doing today. I noticed in the Times today a very supportive editorial for what the Government are doing today.
We should all start getting proud again of the constitution of which we are all part. We should all stand up and defend it and recognise that what happened was largely our fault because we did not change the system, but also recognise that we need some form of procedure that enables us to deal with these matters, not in some occasional debate of this type or by constantly trying to change it on the Floor of the House, but in a rather more sophisticated way. If it is not to be IPSA—and that jury is still out, as we wait to see how it deals with its current problem—we have to devise our own, because otherwise we will continue to get into problems and have to make amendments as we are doing on the Floor of the House today. If we had a trade union and a business negotiating on how you paid people and compensated people, everyone in the trade union and business would think that you had gone stark, staring mad—but we are doing it.
Lord Palmer
My Lords, I concur with what the noble Lord, Lord Sewel, said—especially with regard to committees of this House going to Brussels. The last time I went under his wise guidance as chairman of Sub-Committee D, I was horrified that I was allowed to claim for a not necessarily needed glass of white wine, which cost €3, yet when telephoning home, I was not allowed a €3 call to check that my wife was alive. I concur with what the noble Lord said—this really must be looked at again.
I add support to the amendment proposed by the noble Baroness, Lady Harris. If the Leader of the House could always guarantee the exact timetable for the Sittings of the House, full-fare flexible tickets would not be required. But until the timetable can be cast in stone, Members are forced to buy full-fare flexible tickets. A four-hour train journey in standard class, which is what I have to endure, is just about bearable if one is in flip-flops and a T-shirt, but not if you are trying to study parliamentary papers and dressed to attend your Lordships’ House. It is for these reasons that I very much hope that the House Committee will look at the noble Baroness’s amendment.
Like the noble Lord, Lord Tomlinson, in his very powerful speech, I would like to put on record that I acknowledge that the current system of expenses is swimming in murky waters. I am acutely aware of the recession, as are other noble Lords, as I watch both the businesses that I try to run struggle from the downturn in the economy. But it is important to put on record that the proposals before us today are heavily weighted against those of us who have long and arduous distances to travel, with all the extra hassle and expense that we incur having constantly to eat out in London. We are also away from our families and we do not have what the noble Lord, Lord McIntosh of Haringey, described back in December as the luxury of sleeping in one’s own bed.
I hope that the Leader of the House and the Chairman of Committees will look most carefully at what has been said this afternoon.
Lord Shaw of Northstead
My Lords, I entirely agree with the proposals that have been put forward, but I have one query. Will some discretion be allowed to play a part in fixing entitlement to travel expenses? On the face of it, when we come back in the autumn, I shall be able to claim mileage costs to and from Wakefield station, as well as car parking as well—a weekly Bill of £56. However, I could catch a taxi there and back for £32, which is a difference of £24 or, annually—if I work it out from usual attendance—of £700. Is this discretion open to the authorities that pass my expenses or not?
Baroness Symons of Vernham Dean
My Lords, I, too, was a member of the ad hoc committee under the chairmanship of the noble Lord, Lord Wakeham. It is worth remembering that we are talking, simultaneously at times, about four different systems: the current system; the system that the SSRB put forward; the system recommended by the ad hoc committee; and the system in today’s proposals. I should like to compare the ad hoc committee’s proposals with today’s proposals, as I think that we are missing some important points.
My noble friend Lord Tomlinson was exercised by the fact that the recommendation made by the ad hoc committee at paragraph 5.61 of its report moved outside the remit that the House gave us. It is important to recognise that the report makes that point fully and coherently at paragraph 5.56. The report goes on to recognise, as my noble friend Lord Tomlinson said, that since the general election things have changed. That is spelt out in paragraphs 5.58 and 5.59, which consider IPSA and possible changes to your Lordships’ House. There was no sleight of hand; this was clearly spelt out in the report. In paragraph 5.61, the noble Lord, Lord Wakeham, recommended, with the support of most of the group, that,
“consideration might also be given to the case for putting in place a simplified allowance”.
The position is straightforward; I do not think that anything underhand went on.
The simplified allowance that we are looking at is a £300 a day flat-rate allowance. I remind your Lordships that the ad hoc committee report recommended that we accept the SSRB’s £200 flat rate. It also recommended, as an alternative—the noble Lord, Lord Williamson, referred to this a moment ago—a £100 flat-rate, unreceipted allowance, or £300 for those living outside London. Concern has been expressed about the House not being so diverse because of the difficulties of travel on that basis, but that applies equally to the alternative proposed by the SSRB. It could be argued that there was another alternative—the £140 receipted alternative. Indeed, we recognised that that was the SSRB’s alternative. However, that £140 receipted alternative was attenuated for every day that an individual did not attend the House, so that the individual not only lost for that day but faced an additional deduction from what they would have received. In essence, I do not think that many people would have received anything like £140, because everybody has to be away from the House at some point. I really do not see that the £300 flat rate is very different from what the ad hoc committee put forward, which was either to take the SSRB proposal with its deductions or to have the flat rate that we proposed. I do not think that that is an arguable point. It is written in our report, which I am sure all of your Lordships have read assiduously.
The question then is whether this is fair in the light of what London-based Members would receive. It may be argued that London-based Members will get more, but I have always found the argument that some people’s good fortune must mean other people’s misfortune difficult to agree with. The fact is that I am one of those who are not London-based Members and therefore, theoretically, I lose under this. I do not believe that I am losing any more than I would have lost under the report, but I accept that London-based Members will be receiving more.
That then raises the question of equity. Equity can be looked at in a huge variety of ways—equity according to need or the equity of getting the same rate for the job that you do. Both are arguable cases. The fact is that the proposals before us are the same rate for the job that you do.
On a personal level, one of the reasons why I want these proposals to go through is that I have seen many of my colleagues torn apart on Thursdays and Fridays by the ghastly telephone call that goes, “Hallo, it’s the Sunday Times here”. People know exactly what is coming—intrusive questions of a deplorable nature, people outside their house and their neighbours’ houses, questions down at their local pub. To me, this system is worth it because it means peace of mind for me and my colleagues. That is of enormous value to all of us.
Then there is the public interest argument. The fact is that this is a transparent system. What people receive is absolutely in line with their attendance in this House. There is no hidden agenda, there is nothing else for someone to look for and there are no constant questions about who you are living with and how that works. It is completely transparent. The public can have confidence in what is happening. The rate for the job is £300 a day—end of story. I hope that it will be our end of story too.
Lord Tebbit
My Lords, I have a good deal of sympathy for the amendment put forward by the noble Baroness, Lady Harris. My main point, however, is about the allowances as they affect staff who Members may employ.
Let me be clear. I do not think that this ought to be a full-time House. We should not be full-time politicians. Over the years since I have been in this House, I have tended to attend on 60 or 70 days a year. At times I think I have made some difference in what I have done while I have been here, for good or ill—opinions may differ about that. I do not think that we want to encourage people simply to come here every day. Frankly, there are too many of us now anyway; we would overfill the place.
As I look back, I find that for several years—because I take that view and I attend for only about half the days that the House is sitting; that is, when there are things that I think are important for which I should be here or things that interest me—the amounts that I have drawn in allowances have been less in total than I have paid my part-time secretary. It is a privilege to be here, and I have been prepared to accept that. What worries me now, however, is the loss of the provision to be able to claim secretarial allowance—or office allowance, whatever you call it—during the time when the House is in recess. I cannot tell my secretary that she is not going to get paid because the House is not sitting. I am not prepared to do that; it would not be right. There is a case to be made for looking again at how the new system will affect those of us who intend to attend only 60 or 70 days a year but whose activities in the House and as politicians generate enough work to cause us to retain a secretary to help. Whatever happens, and broadly speaking I support the proposals that my noble friend has put forward, we need to look again at that aspect.
Lord MacKenzie of Culkein
My Lords, I support the resolutions before us but have some sympathy with the amendment of the noble Baroness, Lady Harris of Richmond. I was particularly surprised to note that there was no provision for first-class travel on sleeper trains. Many years ago, I got on to a sleeper train in Taunton, Somerset, where a rather drunken fellow countryman of mine insisted that I shared his cans of lager through most of the trip. After that, nobody in my organisation ever travelled second class on a sleeper train. I hope that the House Committee will look at that measure.
I support the changes proposed today, despite the fact that I am one of the losers. Noble Lords might ask why I do so, given that some provisions appear to be manifestly unfair. I live in Scotland but acquired a house in London solely for the purpose of attending this place. I go back to the decisions we made here on 22 March, when we approved the House Committee’s third report. At first blush, the decision on what constituted a principal residence seemed most reasonable. As my noble friend Lord Sewel said, it seemed straightforward and perfectly sensible—that is, the place where you spend most of your nights at weekends and during recesses. I too thought that was reasonable until I looked at the guidance for declaring one’s principal residence, which asks where you will spend most nights at weekends and during recesses in the forthcoming year.
I had considered going to Australia this summer for six to eight weeks. I have a brother in Melbourne, a brother-in-law in Sydney and a stepson in Perth—three very different parts of that very large continent. Given that I am in my 71st year, I am not going to see them that often so I thought that I would spend some time there. As I did not want to do anything that put me in breach of the Code of Conduct, or required me to appear before the commissioner, I rang the finance department to check that my travel plans would not cause any difficulty. The staff said that that was one of the things which would be looked at in a meeting that afternoon. I called back two or three weeks later and was told that they had not yet reached a final decision and were still considering the matter, but that their first thoughts were that my plans would go against me. Presumably, that means that I could not count my Scottish home—my home where I have lived for the past 10 years—as my principal residence and therefore could not claim travel expenses either.
I do not blame the staff in the finance department, who were most helpful. They have to work within the decisions that we make on the Floor of this House. This is clearly a classic case of the law of unintended consequences. However, it is one of the reasons I support the proposals before us, as they would remove all the opportunities for that sort of bureaucratic decision-making and for the denizens of the local press to check with my neighbours whether I have been seen at my principal residence over the whole of the summer. I certainly do not want that sort of nonsense; I do not think that any of us do. Several noble Lords have raised similar concerns.
I look forward to this House supporting the Motions before us. Let us accept them and see whether they have any effect on the pattern of attendance at this House. If they do, they will have to be revisited. However, in the mean time, I am pleased to support them.
Lord Monson
My Lords, I agree with a great deal of the argument proposed by the noble Lord, Lord Tomlinson, although I do not claim overnight allowance. I agree with his argument about fairness—or absence of fairness, as the case may be—and with his contention that the proposed changes will not, as is hoped, satisfy elements of the media or the public.
I turn briefly to a point made by the noble Lord, Lord Dholakia. Can the Leader of the House confirm that the proposed £300 and £150 are maximum daily allowances and that if a Member on a particular day felt that the amount of time, effort and expense incurred justified only a slightly smaller claim—say £120 or £100 —he or she would be free to make that claim and would not be faced with a choice between £150 and nothing at all?
Lord Graham of Edmonton
My Lords, I support the recommendations and fully recognise that colleagues on all sides of the House are not only entitled to but are justified in making their comments, especially from their own experience. I have been a Member of this House for more than 25 years, and until the past 18 months I never dreamt that there were different interpretations of the rules. I am not an expert, but I was told what I could claim and I have claimed it. Yet I have been astounded to find that colleagues, whose integrity I do not impugn, have interpreted the rules differently.
Colleagues in the House have gone through the past 18 months fearing that they will accidentally find themselves in trouble when they are not trouble-makers—and I very much sympathise with my noble friend Lady Symons. That is in part due to the various anomalies and blemishes in our arrangements, as has been explained by various experts and keepers of our conscience, from the Clerk of the Parliaments downwards. I pay full tribute to all my colleagues around the House. I look at the Leader; he and I have sparred for 25 years. None of us has lost any weight, we are still standing, and we are still here. From the Leader downwards—I say that with no disrespect to anyone—colleagues have had not only to wait until today but to grapple with finding a solution. What we have before us is their idea of a solution. I am sure that the Leader and his colleagues will understand that there will be a need to revisit the issue in light of what has been said by a number of colleagues.
As far as I am concerned, I am not wedded to either the past or the future. I accept that what we are looking at is the product of our good friends who help to lead us in one way or another. However, we are entitled to dignity and respect from outside the House for what we try to do. We know that it is terribly difficult to measure who is a good Member, who is not and who attends every day. I note that the noble Lord, Lord Tebbit, said that he is able to give 60 or 70 days a year here and, when he is here, he makes his presence felt. But others are able to attend more or less every day. We are all on the same level as far as integrity is concerned, and we are all entitled to weigh up our responsibilities in light of the great honour given to us by our party leaders, et cetera. The one thing that sticks in my craw is that collectively colleagues from all around the House, who without exception are good and honourable, have had to carry the burden of a nasty campaign waged through the press. At the end of the day we know that, whatever decision we take, we will be subject to exploitation and criticism by the press and others.
We are here to look at the benefits of the proposals and the extent to which our colleagues are saying, “This is what we think is a fair and equitable system”. I respect very much the point of view put by my noble friend Lord Tomlinson and others that noble Lords will lose out. As far as I am concerned, we will all be winners if we accept the Leader’s recommendations, and I wish them well.
The Chairman of Committees (Lord Brabazon of Tara)
My Lords, before the Leader of the House concludes today’s debate, I wonder whether the House might feel that it is time now for me, on behalf of the House Committee, to attempt to address those points which noble Lords have addressed to the committee’s report rather than to the Leader’s two resolutions. I shall attempt to deal first with the amendment in the name of the noble Lord, Lord Methuen. As the noble Lord described, that amendment would extend the £150 allowance for certain types of mandated business in the second category in Annex A of the report while away from Westminster on the days when the House is not sitting.
The House Committee took the clear view that now was not the right time to expand or uprate the entitlements on business away from Westminster. Therefore the range of entitlements is exactly the same as at present. For the types of business in category B, I point out that up until a few years ago, when they were reviewed by the House Committee, there was nothing paid at all. Category B was then included; it includes such things as CPA and IPU business. Members are currently reimbursed the relevant categories of expenses only in respect of days when the House is sitting. This sort of activity has been quite clearly distinguished from travel as an official representative of the House or a committee where Members are acting on our behalf. The noble Lord is asking for the current policy to be expanded, and on the grounds of cost and principle the committee does not support such an expansion at this stage. I emphasise that these categories and rates were reviewed relatively recently by the House Committee and that they will probably be reviewed again in due course.
The noble Lord, Lord Grenfell, made an interesting point about all-party groups—particularly on all-party country groups. Those have never been included in any category for allowances. It could be limitless if we were to include that sort of thing and, as I have said, we felt that this was not the right time to expand the entitlements and that we should try to keep them the same.
Lord Grenfell
The noble Lord says that this could become limitless, but I am not sure that that is really a fair argument. The question is whether, when Members of this House visit another capital on an exchange visit to other parliaments, the effect of that is the same as if they were going there representing the House. I am not quite sure why the noble Lord feels that this might be a limitless affair. It should be treated the same as when one is going to represent the House of Lords.
Lord Brabazon of Tara
If the noble Lord travels as a representative of the House of Lords, he would be able to claim an allowance under the first category in the table, so that is already provided for.
The noble Lord, Lord Sewel, was worried that members of Select Committees might be less willing to travel on committee visits at the rate of £150. I cannot remember exactly what the rate is now, but it is not the full daily rate. It is a reduced rate and is not far different from £150. The new scheme is intended to provide adequate support for Members to contribute to their activities, but if we find that there is a problem with Members being inhibited from travelling on committee visits, we will have to review the system—we are keeping it under review, as I have said. However, it is not the proposal to do so at the moment. In passing, I point out to the noble Lord, Lord Palmer, that the cost of his telephone call to his wife on an overseas visit could be taken from his daily subsistence allowance, which he would receive. I turn to the amendment in the name of the noble Baroness, Lady Harris of Richmond, which would, evidently, reimburse Members for first-class travel regardless of cost. The noble Baroness referred to the Wakeham group’s report and the difference between the SSRB’s recommendations and those of IPSA. The Wakeham group considered the merits of both sides of the proposals on train travel. It was prepared to accept the SSRB’s recommendations but noted the difficulty of verifying whether a Member was working. Noble Lords will recall the arguments about whether one was going to be working on the train and therefore whether one should travel first or second class. The group expressed a preference for the IPSA proposal, which rightly emphasised value for money over class of travel, and the House Committee agreed.
Lord Strathclyde
My Lords, this has been an interesting and lively debate in which many noble Lords have participated, and in which a considerable number of other Members have listened carefully to what has been said. The noble Lord, Lord Brabazon of Tara, has already responded with his customary dexterity to those issues that fall within the remit of the House Committee, and I would not seek to add anything other than my full support to his response.
It falls to me to respond to noble Lords who raised issues about the proposed scheme and the provisions in the two resolutions on the Order Paper. I begin by thanking the noble Baroness, Lady Royall of Blaisdon, for her handsome tribute to me. The House needs to understand that none of this would have been possible without a certain amount of co-operation, understanding and agreement among the usual channels, the Convenor of the Cross Benches and my noble friend Lord Wakeham and his group. Nothing has been simple about this. It required a great deal of thought and hard work. Many reports were commissioned and it took a great deal of time to bring us to this moment. I am painfully aware that this scheme does not and will not suit everybody but in our combined judgment, it was the best we could possibly do to suit as many Peers as possible.
When the noble Baroness, Lady Royall, said that we searched for a balance and got it about right, that is the right approach. It may be that we got it completely wrong and that there will be a deleterious effect on the attendance of the House. Of course, we will have to come back to review it if such difficulties arise. The Convenor of the Cross Benches was particularly concerned about that.
A number of issues were raised by my noble friend Lord Dholakia and others on a range of detailed issues. In the end, two speeches cast a substantially more cautious note about the direction in which we are going. The first was by the noble Lord, Lord Tomlinson, and the second was by the noble Lord, Lord Sewel. I understand where they are coming from although I had difficulties following entirely the thought processes of the noble Lord, Lord Tomlinson, and what alternative he was suggesting. While he was speaking I read again the words in the Wakeham report. To me it is clear. Paragraph 5.57 states:
“Since the publication of the SSRB’S report, and the appointment of this group, two key developments have taken place which we believe should cause those tasked with putting forward a new scheme to consider whether an alternative approach to that set out in this report … should be put forward”.
Paragraph 5.58 states:
“The first development was the publication of IPSA’s proposals for the House of Commons on 29 March 2010”,
and the second was,
“the new government’s proposals to reform the House of Lords in time for the next General Election”.
That was the clear signpost by the Wakeham committee to examine alternative proposals. Indeed Recommendation 17 states:
“We recommend that consideration might also be given to the case for putting in place a simplified allowance”.
I know that the noble Lord does not agree with that and we could spend a great deal of time on the process, but let us deal with the substance. I am indebted to the noble Baroness, Lady Symons, for what she said. She almost took the words from my mouth but put it rather better and more elegantly than I would have done. Equity can be viewed in different ways, but the flat-rate scheme that we are proposing—that I am proposing—today treats all noble Lords in exactly the same way. We recognise that Peers have to travel from afar through the travel arrangements. Under the scheme, the noble Lord, Lord Sewel, will be able to claim, for a four-day week, £1,200 per week. I know that that is not for every week, because sometimes the House does not sit, but it is a substantial amount of money. The noble Baroness, Lady Symons, described extremely well the differences between what was proposed by the SSRB and this proposal.
I have one unhappiness with what the noble Lord, Lord Tomlinson, said. That was his accusation that I had said that, broadly, this scheme would be cost-neutral and that he did not think that it would be. It is worth me explaining what I meant. The £300 is 11 per cent less than the current £335.50 maximum. It is 12 per cent less than the £340 maximum suggested by the SSRB. As my noble friend Lord Marlesford pointed out, it saves a considerable bureaucratic and administrative cost. My calculation was that if only 20 per cent of Peers claimed the £150 reduced fee, the scheme will cost no more than it currently does.
This time next year, we may or may not be in a position to make that judgment. Of course, it is still open to Peers to charge nothing at all. Extraordinarily—we should talk about this more—last year, 13 per cent of Peers attended the House of Lords, made their contribution and decided not to charge anything. They should be recognised for having done so.
It was about 40 years ago that the expenses scheme was brought in.
Lord Tebbit
I am sorry to interrupt my noble friend, but are his sums on the assumption of an unchanged number of Peers, or do they take into account the enormously increased number of Peers?
Lord Strathclyde
It is entirely typical of my noble friend to ask such an excellent question. My figures were, of course, on a like-for-like basis. He will recognise that phrase from his time in government.
Lord Sewel
I am very grateful to the noble Lord for giving way. Has he any calculation of the effect of moving from £161 a day to £300 a day for those who do not claim the overnight allowance?
Lord Strathclyde
No, my Lords, because I do not know how many of those who claim the £160 amount would claim the £300 amount, so I cannot help the noble Lord with that. It is my view that, on a like-for-like basis, it is broadly cost-neutral. The House is increasing in size, but was in any case, so it was going to cost more. I hope that we will get a worthy and worthwhile contribution from the new Members of this House who come here to play their part.
I was just saying that it is now 40 years since the original expenses scheme was introduced. I have no idea whether it will be another 40 years before we return to the issue. I know that it is the dream of the Deputy Prime Minister—and me—that long before that, we will have a fully reformed House, in which case there will be an entirely different regime.
The resolutions and Motions before us today will allow us to return in October to start afresh with a new scheme of financial assistance for Members. They allow us to put past indiscretions very much behind us. I believe that they will give us the confidence to look forward and concentrate fully on the excellent work that this House does in holding the Government to account. I very much hope that the House will now approve the resolutions before us.
House of Lords: Travel Expenses
(13 years, 9 months ago)
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Lord Strathclyde
Travel Expenses
That the following provisions should apply to journeys commenced on or after 1 October 2010-
(a) in respect of journeys by car, motorcycle or bicycle for which Members of this House are entitled to a mileage allowance, Members should also be entitled to recover road tolls (other than congestion charges), and
(b) in respect of journeys by public transport for which Members are entitled to recover fares, Members should also be entitled to recover the costs of parking at stations, ports or airports (where it is appropriate to do so).
House Committee: First Report
The Chairman of Committees
That the First Report (HL Paper 18) from the Select Committee be agreed to.
Amendment to the Motion
Lord Methuen
As an amendment to the above Motion, at end to insert “but with the addition of the following words at the end of the first sentence in paragraph 22- “whether or not the House is sitting.”, and with the omission of the words “(if the House is sitting)” in the second table in Annex A”.
Lord Methuen’s amendment to the Motion not moved.
Amendment to the Motion
Baroness Harris of Richmond
As an amendment to the Motion in the name of the Chairman of Committees, at end to insert-
“but that it be an instruction to the Committee to bring forward proposals for a scheme for Members living more than 90 minutes’ train journey time from Westminster to be reimbursed for the cost of a first class rail ticket”.
Baroness Harris of Richmond
I beg to move and to test the opinion of the House.
The Lord Speaker decided on a show of voices that Baroness Harris of Richmond’s amendment to the Motion was disagreed.
Motion agreed.
Consolidated Fund (Appropriation) Bill
Employment and Support Allowance (Transitional Provisions, Housing Benefit and Council Tax Benefit) (Existing Awards) Regulations 2010
(13 years, 9 months ago)
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Baroness Thomas of Winchester
That this House takes note of the Employment and Support Allowance (Transitional Provisions, Housing Benefit and Council Tax Benefit) (Existing Awards) Regulations 2010 (SI 2010/ 875). First Report from the Merits Committee
Baroness Thomas of Winchester
My Lords, these regulations are about transitional arrangements for the gradual migration of people from incapacity benefits—that is, incapacity benefit, severe disablement allowance and income support on the grounds of incapacity—to employment and support allowance, which will begin in October this year with a small trial run and then, from next February, will be rolled out nationally over the next three years. At the outset I should make it clear that I support the direction of travel of these regulations. My reason for drawing them to the attention of the House is simply that they are very important to the lives of many of the most vulnerable in our society and there are questions that need answers—not least because Citizens Advice, in its evidence to the Social Security Advisory Committee, said that the goalposts appear to have shifted since the introduction of ESA. Another good reason for having this debate is that these regulations were in the previous Government’s pipeline and we need to know where we are now.
Under the regulations everyone on the old incapacity benefits will be retested by an Atos Healthcare professional for the work capability assessment, after which, according to the revised impact assessment for the regulations, 23 per cent of the cohort are expected to be found fit for work and therefore not entitled to any component of ESA. Another reason I was encouraged to table this take note Motion was the Merit Committee’s helpful report—its first report of this Session—and, in particular, Appendix 1, which has a very useful question-and-answer section. The Merits Committee drew attention to these regulations on the grounds of interest to the House. I only wish that they were of interest to more Peers—although I must say that there is a much fuller House now than there usually is when we discuss social security regulations. Although I am extremely pleased to welcome the noble Lord, Lord Knight of Weymouth, to the opposition Front Bench—for these are really his regulations—I wonder where are all the other Peers who might be expected to speak up for the disadvantaged.
We owe a debt of gratitude to the Social Security Advisory Committee, which has published a thoroughgoing report into these regulations. The more I read the committee’s report, the more I realised that there was a lot of complication in the system, although I accept that things will eventually be simpler. Even the Explanatory Memorandum says:
“The introduction of a Transitional Addition to ESA will add some complexity to the benefit system on a short term basis”.
It can say that again.
The House will be delighted that I am not going to list all the complications arising from the different permutations of benefits, tax credits and pensions. Nor will I mention various anomalies resulting from migration, some of which the Government have addressed as a result of the SSAC’s report. However, I will mention just one complication. Contributory ESA is a taxable benefit, whereas for those who were migrated in 1995 from the old invalidity benefit to incapacity benefit there was an income tax exemption. There is a cohort of about 500,000 claimants who theoretically could find themselves liable to pay tax, although it has not yet been decided by HMRC whether to continue to exempt them. As time goes on, that number will drop.
One glimmer of light is that the Budget has increased the amount of tax-free allowance, so I would imagine that the number of claimants owing tax by the time migration is complete will be small. Perhaps my noble friend can tell us when he expects a ruling on this. However, I accept that income tax rules are not part of the regulations but a consequence of them. One reason why this is important is that, as the Explanatory Memorandum says:
“Ministers have committed on several occasions that no existing incapacity benefit customer will see a cash reduction in their benefit on conversion to ESA”.
Turning back to the SSAC’s report, I note that the committee is calling for a delay in the rollout of ESA until various conditions are met. The conditions are that there is a stronger evidence base on what works and whether ESA is achieving its aims of helping more people into work; that the new regime for claimants with a health condition has bedded down; that changes have been made to the WCA as a result of the review by the DWP; and, finally, that there is an upturn in the labour market.
Not surprisingly, this Government are even keener than the previous Government to get cracking with the migration. The last thing that they want is to wait any longer, which I understand. However, the SSAC is not the only body warning about trouble ahead if changes are not made. Professor Gregg, the architect of the sanctions regime in the two most recent Welfare Reform Acts, has now added his voice to those who urge the Government to make radical changes to the way that ESA operates before the migration of IB claimants begins. In particular, he criticises the way in which the system leaves large numbers of failed WCA claimants to languish on jobseeker’s allowance with no prospect of work. Professor Gregg is reported as saying:
“To start moving people who may have been on incapacity benefit for years straight onto jobseeker’s—
allowance—
“is ridiculous. Before wading into the stock, the system has to be right”.
This sentiment is echoed by many groups, including Citizens Advice, which gave valuable evidence to the SSAC. It states:
“ESA was welcomed by many as offering support to those who face significant barriers to working, because of an illness or disability. There seems to be considerable confusion, however, as to whether it is effectively offering help to those who may be able to work with a lot of support. The goalposts appear to have shifted since its introduction, with the current implication being that if a person is able to work at all, they will not be eligible for ESA even if their illness or disability presents a very significant barrier to their finding work”.
It goes on to point out that those who are found to be ineligible for ESA will be moved on to JSA, which offers a lot less support, or perhaps on to no benefits at all, and will therefore be much further away from the help and support they need if they are to return to sustainable work.
In Appendix 1 of the Merits Committee report the department states that claimants on JSA with a health condition may restrict their availability for work provided that the restrictions are “‘reasonable’ given their condition”. It goes on to say that,
“the Department has been looking at what additional support may be required to help them return to work”.
Can my noble friend elaborate on whether that additional support is going to be forthcoming?
In general, something is clearly going wrong with far too many of these work capability assessments. Is it really the case, as we have read, that thousands of vulnerable people, some suffering from terminal cancer, Parkinson’s disease, multiple sclerosis and clinical depression, have had their applications for ESA declined and told to look for work? I have read the Chief Medical Officer’s report published in March this year in which he called for some changes to be made to the descriptors, particularly around fluctuating conditions where exertion is a significant component. He recommended quite a lot of other changes that will have to be legislated for. I hope that this will happen quickly and that the Government will not just rely on the mantra that work is good for people’s health. I, too, can quote Dame Carol Black’s excellent review, published two years ago, of the health of Britain’s working age population in which she says:
“Recent evidence suggests that work can be good for health, reversing the harmful effects of long-term unemployment and prolonged sickness absence”.
I agree with that, but she goes on to say,
“putting people on JSA, which is designed to be a more active benefit than IB by focusing on what people can do rather than what they cannot do, is not enough”.
She calls for more to be done not just to raise aspiration and motivation, but also to address health conditions. She also says quite categorically that:
“Help and support to find work will not be appropriate for all, especially those with more severe health conditions”.
What is needed is a full and independent review of the work capability assessment that looks at the full picture of who should be eligible for ESA and not just at the individual descriptors.
My main questions are, first, to ask my noble friend whether the many criticisms of the way in which the work capability assessment is carried out by Atos Healthcare are being adequately addressed and, secondly, whether he is confident that Jobcentre Plus will have enough trained staff throughout the country from October to give the right support not only to those on the employment side of ESA, but also to those who have been on IB and who may, after migration, find themselves in a very different climate on JSA. Many of these new JSA recipients are likely to have a health condition or disability. Has the department factored into staff planning the increased help that the new JSA recipients will need?
While we are talking about staff, can he tell us the position of the whole of the staffing of JCP? I was alarmed to read in last week’s Official Report for another place, in a debate about jobs and unemployment, that the Minister said categorically that JCP staff would be reduced by freezing external recruitment and not extending fixed-term contracts when they come to an end. Is it not the case that Jobcentre Plus will need all its staff on hand when the migration starts? Although we may be talking about what are now called “back office” staff, along with my noble friend Lord Kirkwood, I think that, in view of their open plan offices, all JCP staff are on the front line, which is splendid. Can my noble friend say whether recruitment into JCP is still going on or whether it is now up to full strength? From the impact assessment I see that a further 700 to 900 full-time staff will be needed for the migration. Does JCP ever advertise its own jobs in JCP offices? Is the sentence in the Explanatory Memorandum, “We are also discussing the allocation of additional funding”, any longer applicable under the heading “Support for Local Authorities”?
Lord Kirkwood of Kirkhope
My Lords, I am delighted to follow my noble friend. I declare an interest: as my colleagues may know, I am a non-executive, non-remunerated director of the Wise Group in Glasgow.
My noble friend Lady Thomas has an eagle eye for finding statutory instruments and Orders in Council which are of serious significance. Her experience in both the Merits Committee and now in the Delegated Powers Committee serves the House well and we are in her debt. These are important regulations. My spies, of whom there are many, tell me that, technically, they are legally ambiguous. If I did not know the noble Lords, Lord McKenzie and Lord Knight, as well as I do, I would think that this was a deliberate Labour spoiling tactic to leave a gremlin in the system to subvert the confidence of the incoming coalition Government. However, that is a quite unqualified and undignified accusation and I make it only in passing.
There are some technical ambiguities in the regulations. This serves to demonstrate how important it is to simplify some of these systems. If the professionals dealing with these regulations cannot make up their minds whether or not they are clear, I do not know who can.
I wish to make one or two brief points about the significance of the long-term implications of these regulations. I am an unqualified supporter of Professor Paul Gregg’s personalised conditionality concept. During the course of the Welfare Reform Bill last year, colleagues will have heard me expound this theory. Professor Gregg rightly captures the deal we will be offering people in future. Yes, there will be conditionality and people will have to be responsible for their actions, but the deal has another side to it: there will be a tailored, sensitive conditionality over which they will have a voice and which they will be able to help mould and shape for their own personal circumstances. That is the offer. The offer has two sides to it, both of which are important.
These orders should not to be considered in the context of the panic caused by the deficit-reduction problems that we face right now, because I hope that this system will sustain the support that we give to people in these circumstances not just for the three years of the next comprehensive spending period but for five, 10 or 15 years. If it works and can be made to work well and sensitively, it will serve us in the long term. Therefore, the regulations should not necessarily be shaded or influenced too much by the financial circumstances that immediately face us, although they are significant.
We need to be realistic about how many people we can expect to help in the short term. If we manage to get upwards of 1 million people back into remunerative work where they have some prospects of job retention and progression, it would be a marvellous success. If expectations are too high, particularly if they are driven by the perception of cuts and not of progressive policy changes, we will be in some trouble. We need to be realistic about what we can achieve. We shall get a better policy outcome in delivery if we do that.
We should work with the willing. Jobcentre Plus staff at the front line know this. I agree with my noble friend: everybody in Jobcentre Plus offices that I visit is in the front line. The only people in the back are the managers; perhaps we can get rid of some of them in order to support the front-line staff. The only people who are backstage are the big cheeses; it is the front-line people whom we are trying to support. We need to work with the willing. It is clear from my work in the Wise Group that there are people who are anxious and positively engaged in trying to get back to work. If you can have success with some of them early on, the word spreads and you get positive feedback. People then say, “Well, if it’s worked for my next-door neighbour, then I hope it can work for me”.
There is a spatial dimension to this problem. That is nothing new. Anybody who has studied these policies in the past understands that labour market conditions in Reading are different from those in Merthyr Tydfil or downtown Liverpool. When the policy is rolled out from October, and subsequently when it is rolled out nationally from February, that needs to be borne in mind. For the reasons that I gave earlier, conditionality must be sensitively applied in favour of the client as often as possible.
I am therefore confident that there can be a coherent policy. The direction of travel is absolutely right. Both Front Benches have made as much progress as they reasonably can. It is a very difficult area, and it is made more difficult by the financial circumstances, but it is the right thing to do. However, we need a coherent, long-term policy. We should think about a single working-age benefit. It is hard to get from where we are now to there; it will take time; but we should do nothing that gets in the way of that and makes it more difficult.
My noble friend spoke about providers. I think that some providers believe that the quality of the medical personnel who do the medical examinations which inform this process could be better. The decision-makers who take forward that work—it is crucial work for the individuals that it affects—need to have some responsibility for making sure that the quality of the medical reports is consistently good. If it is not, there needs to be something in the system that gives them the ability to say to Atos or their line managers, “I’m really not comfortable with the medical evidence that I am getting that informs my decisions”. That is an important piece of the business model that needs in the implementation to be carefully considered. I know that my noble friend is aware of it and I am confident that he is on the case. I hope that he will do everything that he can to make sure that those decision-makers get the best information so that they can make the best decisions possible.
The explanations given to people on incapacity benefit when they are first contacted, and subsequently when the policy is rolled out after February, need to be clear. I hope that the quality of the offer that is being made—I hope that it is an offer because as I said it is personalised and conditional—will be explained to them. The responsibilities that they have are different. Some of them fall foul of those responsibilities because they do not know what they are. In the past, that has been because some of the letters and communication strategies that have been used have been opaque. If you are confronting this situation for the first time and are in a vulnerable household, the last thing you need is ambiguity about what you are facing. We need to be crystal clear about what we now require—because “require” is the only verb that can be used in this new situation.
Also, from a provider point of view, there is a lot of concern about people who leave the system. There are people who should not have been in the system in the first place, but an estimated 30 per cent will exit the system. American experience suggests that a lot of those people become destitute, and that is not in anyone’s interests. In America you can move to the next-door state and start again. You cannot do that in the United Kingdom so we need some follow-through to make sure that people are not being dumped. The object of this policy is not to dump people: it is to apply it to people who are properly eligible. If my noble friend could give me some assurances about that I would be grateful.
This is not just about people getting people into sustainable jobs. I am pleased that we are talking about what I would consider to be sustainable jobs and not just jobs for 13 weeks, which was never sustainable under the old system. We are making progress in that direction, but we need to talk about job retention and advancement as well. We must not lose sight of that. We need to be able to say to people that, even if they are getting ready for work and nearer the labour market, this is all about giving them work experience from which they can benefit. Therefore, as my American colleagues all say, they start with any job, move to a better job and then on to a career. They are being offered an ABC system. That is part of the offer. If we can do that, and it is possible with the proper back-up, support and implementation of the policy, then this is a win-win situation for everyone.
I am certain that my noble friend on the Front Bench is having all sorts of frayed conversations with the Treasury. I would like to strengthen his arm—his hand, rather, because strengthening your arm is to do with drinking. To strengthen the hand is a Quaker concept which I understand is more beneficial to everybody. I hope that he will hold out. If this policy is to work, there will be a degree of invest to save across the broader policy front. If he does not win support from his colleagues in that direction, even if the policy is absolutely 100 per cent, with the best will in the world, he may still fail because we cannot do this if there is absolutely no money to give people the opportunity to train themselves off benefit and into work, which is the idea behind the policy.
Lord German
My Lords, I also rise to support my noble friends in welcoming the intention and general thrust of these regulations and changes. Supporting incapacity benefit claimants into work and making sure that people are on the right benefit with the right level of support is obviously the correct thing to do. There is no doubt either about the significance of these regulations. About 1.5 million people in our country will be affected and some of them are the most vulnerable in our society. The issues that I want to comment on, therefore, are not about the principle but about the process of migration—“it ain’t what you do, it’s the way that you do it”.
There are two outcomes that I am sure my noble friend the Minister will wish to avoid—the unexpected and the unintended. The unexpected might be failure somewhere in the process of change—perhaps a blockage in the appeals process or a group of vulnerable people who are marginalised by the whole process. Since it is unexpected, all you can do is ensure that the system is as robust as possible and that everything is in place before it migrates and is therefore able to withstand the shocks. The unintended consequences, however, can be guarded against more easily. For that we look to the reports of the Merits Committee and the Social Security Advisory Committee. They have produced a clear, evidence-based set of reports, which should help to steer the Government through the maze that is the migration process.
As I know from the dates given on the SSAC report and the Government response, it appears that the response is from the previous Government. I therefore offer a brief analogy to my noble friend the Minister, based on my experience. I took over a ministerial portfolio in Wales; one month beforehand, the previous Minister from another party in a coalition had thrown the switch on a new computerised payment system for farmers. The system was intended to surpass anything else in the past; it was all-singing and all-dancing, and introduced a new payment structure. Needless to say, it went terribly wrong in year one but was corrected and became an exemplar system in year two. I shouldered a large part of the anguish of the claimants while my predecessor escaped without a scratch. I hope that our noble friend will benefit in coming out of this without a scratch.
Lord Knight of Weymouth
My Lords, I am most grateful to the noble Baroness, Lady Thomas of Winchester, for tabling this Motion, which has allowed for an excellent debate. It also allows me to reassure the noble Lord, Lord Kirkwood of Kirkhope, that the regulations are not some kind of incendiary device planted by me and my noble friend Lord McKenzie to cause the Minister a problem.
The situation in which I find myself is slightly odd. This is my first time at this Dispatch Box scrutinising the legislative work of the noble Lord, Lord Freud, but I am afraid that it is not a chance to show my great forensic skills in unpicking the inadequacies of the regulations. That is, of course, because the regulations were inspired by the previous Government’s White Paper, which was written by the Minister before he jumped ship and joined the other side. They were then signed in March by my friend Jonathan Shaw, when he was working with me as a Minister at the Department for Work and Pensions. Therefore, the Labour Government’s regulations are now being tabled by the Tory Minister who inspired them when he was a Labour adviser. As the shadow Labour Minister, I can assure your Lordships that I am not opposing the regulations.
Instead, I want to ask the Minister a series of questions, similar to those raised by the noble Lords and the noble Baroness who have already spoken, about the policy context in which these regulations will now operate. That context has changed with a change of Government, in particular with the introduction of the work programme. The basis of the regulations, which we fully support, is that we should move people in incapacity benefit through a work capability assessment to then decide which sort of employment support allowance they should be on or whether they are fit for work and can go straight on to jobseeker’s allowance. I assume that, under the work programme, this would determine not only the level of benefit but also what support people would receive under the work programme. The contractors under the programme would then be paid on the basis of the numbers that they would get into work.
The first set of questions then arises. If you go through the assessment and are moved on to JSA, you suffer a benefit cut after a transition period, as set out in the order. The theory is that then you will be helped into work. However, given that, according to the impact assessment, 93 per cent of incapacity benefit customers have been on the benefit for over a year, what assessment has the Minister made of the numbers who will go into work, given their distance from the labour market? Has he allowed for a worsening labour market? Will he not listen to the Social Security Advisory Committee and wait until recovery in the labour market is secure?
I know that the right honourable Chancellor of the Exchequer, George Osborne, predicted that due to his Budget more than 2 million jobs would be created in the private sector in the next five years, but the OECD said two weeks ago that it expected the UK recovery to be,
“too muted to result in strong job creation”.
The OECD also said that Labour’s active labour market strategy had prevented unemployment from rising as rapidly as in previous recessions, and said:
“While the large fiscal deficit makes it essential to focus on cost-effective programmes and target the most disadvantaged groups, labour market policies should remain adequately funded. In this context, it may also be of concern that the new Budget ends funding for two crisis measures, namely, the Future Jobs Fund and the Six Month Offer”.
So it looks as if government action will make things more difficult for disadvantaged groups in the labour market because of the ending of those programmes.
Has the Minister convinced the Treasury that the market is able to raise the finance for the work programme, given that it is paid by results in a highly uncertain labour market? What assessment has he made of the impact on those communities, particularly former mining communities, where there is a high concentration of incapacity benefit claimants? Will those areas get special help as £25 per week is cut from many people’s benefit?
What is the Minister’s analysis of how the saving of £1 billion in the impact assessment will be drawn geographically? Has he then looked at how that will relate to the over £1 billion of additional savings in a few years’ time shown in the Budget through changes to the disability living allowance? Will those DLA claimants be protected under this order?
I have a few other concerns about how things are being planned in practical terms, especially given the Government’s fiscal position. First, the order is dependent on contractors being able to carry out the assessments, and a number of important points have been raised about these. I am pleased that the Government are so supportive of the changes for those going through chemotherapy, which we agreed before we left office, that they re-announced them in their Written Statement. I hope that they are also sticking with the changes that we were making for sufferers of ME.
Can we go further to meet the concerns of those with mental illness, especially given the worries faced by these individuals following the Government’s announcement of the ending of primary care trusts and the consequent breakup of the NHS? Has the Minister considered automatically moving those with complex mental and physical illnesses straight on to the appropriate ESA without an assessment, to relieve them of the concerns of going through such an assessment?
There is one other worry regarding assessments, which was raised by the noble Lord, Lord German. When I was a DWP Minister a few months ago, there was only one contractor capable of doing this work—Atos Origin. Does the Minister share my concern that that contractor is already struggling to do the current amount of work on time? What is he doing to get more contractors into that market? Can he guarantee that the capacity will be there, especially to meet the needs of the Treasury in scoring the savings on this programme and the DLA cuts? Perhaps the noble Baroness, Lady Thomas, was right to call for a review.
Like the noble Lord, Lord German, I worry about appeals. The Tribunals Service is already overloaded, as we have heard from the noble Lord’s speech. This work will mushroom under the programme and the DLA changes. Has the Minister agreed with the Treasury and the Justice Ministry that the budget for the Tribunals Service will be protected so that he can guarantee a service? Otherwise, people will wait an age for their appeal and remain on the higher benefit, and the Treasury will not get its savings.
Will the Minister give us an update on how the extra work for Jobcentre Plus and its contractors, referred to in paragraph 10.2 of the Explanatory Notes, will be delivered and paid for? Is there new money for this? Is it contracted?
That work would currently be part of Pathways. In government, we found that in the end that programme was disappointing, after such a good start in the pilot phases. It showed no extra gain from using the private sector over Jobcentre Plus. Does this cause the Minister to pause and wonder whether the backdoor privatisation of Jobcentre Plus embodied in the work programme will work? Does he agree with our conclusion that we need to ensure that those who are moved straight to jobseeker’s allowance should get extra help, given that their health may not be perfect and their distance from the labour market may be significant? Will this be priced into the work programme? Will this in turn include specialist help for those with mental illness, as was so brilliantly provided by the mental health co-ordinators in Jobcentre Plus who were put in following the work of Carol Black? Will the access to work programme continue so that we can ease the ways into work for some of those customers?
I am sorry to ask so many questions—I note that the Minister was scribbling away frantically and I hope that he can answer them. I suspect that he may not be able to answer them all, but those that he cannot need an answer. I urge him, and those listening on his behalf, to ensure that, if he cannot answer them now, he does so in writing and places a copy in the Library.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, I thank the noble Baroness, Lady Thomas of Winchester, for initiating this debate and other noble Lords for their contributions. I am particularly pleased to welcome the noble Lord, Lord Knight of Weymouth, to the opposition Front Bench. I will do my best to respond to as many questions as possible, but I am under a time constraint and to answer them all would take most of the night. That pun was not deliberate.
No one denies that there is a fundamental problem with the way in which incapacity benefits have being managed. We want to improve the quality of life for the worst off in our society. That does not mean leaving people languishing on benefits which provide financial support but no way back into work. There are now 2.2 million people claiming the old-style incapacity benefits and many of these have had no contact with the department for many years. It is time to change this. We have announced plans for radical reforms of the welfare-to-work system and the implementation of the work programme. The work programme will provide the support that will help people to return to work and will be an integrated package of support, providing personalised help for people who find themselves out of work, based on their needs rather than the benefit they claim. The detail around the work programme will come out in the months to come and will answer many of the questions that the noble Lord, Lord Knight, has posed.
We will build on the strengths of the personalised support delivered through JSA so that all jobseekers with a health condition or disability, including customers converted from incapacity benefits, can access the appropriate support to help overcome their specific challenges. I make it absolutely clear that the point of introducing the work programme is to provide a service to people who are being transferred. My main concern about the previous arrangements was that there was no such national provision for those people who needed that extra support.
These regulations enable the department to reassess all those on the old-style incapacity benefits, using the work capability assessment, so that we can look at what they can do, not what they cannot do. This is a positive move and a fundamental change in the way we perceive the abilities of those who have barriers to work because of a disability or health problem. The regulations provide for the conversion of existing awards of incapacity benefit, income support on disability grounds and severe disablement allowance to employment and support allowance, and are designed to facilitate as smooth a move from incapacity benefits to employment and support allowance as possible.
Where a customer is converted to ESA, the regulations provide not only for the protection of their incapacity benefit, income support or severe disablement allowance but any housing benefit or council tax benefit which may also be in payment at the same time. I hope the House will agree that this is a generous transitional protection which will enable people on the old-style benefits to move over time to the same rate of benefit as new ESA customers. The regulations also make consequential amendments to housing benefit and council tax benefit provisions.
Before I get into the detail, I congratulate my noble friend Lord Kirkwood on his intelligence network. He has once again managed to discover that we need to highlight the fact that we have become aware of a technical legal issue relating specifically to commencement of some of the powers under which the regulations were made by the previous Administration. We will therefore be taking steps to correct the position before the Recess. However, this will not result in any changes to the wording of the regulations as laid.
Now let me turn to the concerns that have been expressed by this House and by others. The first is the capacity of Jobcentre Plus. The reassessment of 1.5 million incapacity benefit claimants will be a challenge for the department and particularly Jobcentre Plus, but is one that we are equipped to deliver. It is also one that is essential, if we are to give these claimants the help they need, and have been too long denied, to improve their chances of moving back into work.
Jobcentre Plus is well equipped to deliver incapacity benefit reassessment to the proposed timeframe. The business case has established the level of staffing required for all three arms of the business to deal with the impact of all aspects of reassessment. The business processes will predominantly be based on customer contact via the telephone, but allowance has been made to deal with the contacts expected in Jobcentre Plus offices.
Implementation planning in terms of Jobcentre Plus staff is progressing at local level to ensure that resources are in place in the run-up to the start of reassessment. Resource recruitment, capacity planning and provision for healthcare professionals continues to progress in line with delivery plans, and is on target. IT provision to support reassessment remains on target. When Jobcentre Plus is at full capacity, it will be dealing with 10,000 cases per week or 700 cases per processing site. To mitigate capacity issues, sites purposely have been selected where it is known that the required capacity can be built to undertake this work. As part of monitoring the reassessment process, Jobcentre Plus will be able to control the flow of cases and if required move cases around the network to ensure that cases are processed in good time.
My noble friend Lady Thomas talked about extending the introduction of reassessment in the context of freezing the programme. The early introduction of the reassessment programme in Burnley and Aberdeen clearly is good practice. It has been suggested that it is being conducted too close to the start of national implementation to be of any real use, but this is not the case. This is not a pilot in the normal sense, but a phased introduction, and will enable us to gain early feedback on claimant and staff experience in relation to the new processes. Valuable information will also be gathered to undertake early validation of estimates, such as the proportion found fit for work. We do not think however that we should extend this trial, as this would delay the reassessment process which is so urgently needed.
There has been criticism, which we have heard today, of the work capability assessment. In March this year, a DWP-led review of the work capability assessment found that generally it is accurately identifying individuals for the right support. That said, the review also made a number of recommendations for improving the assessment, and we announced on 29 June our intention to implement these recommendations. Among them were the mental health issues which the noble Lord, Lord Knight, referred to. We will now begin to revise the work capability assessment accordingly. Implementing the recommendations of the review will ensure that the work capability assessment is fairer, more consistent and transparent. In line with our statutory obligations, we have also commissioned an independent review of the work capability assessment which will be led by the highly respected occupational physician Professor Malcolm Harrington.
The noble Lords, Lord Knight and Lord German, both asked why we do not have a list of conditions exempt from the assessment. We want everyone to have the opportunity to engage in work and the support needed to enable them to do so. It is important that we assess someone’s capability for work not on the nature of their health conditions or disabilities but on how severely those conditions impact on each individual’s ability to function. Having a list of exempt conditions was entirely the wrong approach. It led to people being written off and parked on benefit.
The primary aim of the employment and support allowance is to enable as many people as possible to engage in work by offering them the right support, and to ensure that benefits are paid to the right people until they are able to engage in work. This applies just as much to people with severe conditions who may still be capable of work, given the right support. We know that being out of work is harmful to health and that being in work is generally good for health. We want as many people as possible to engage in work. It is important that individuals who are keen to work, despite the severity of their condition, have the opportunity to work and are not automatically parked on benefit. As I said, we want everyone to have the opportunity to engage in work and to have the support needed to enable them to do so. We recognise that there will always be some people for whom that is not possible because of their severe level of disability. That is why a support group was developed for people with limited capability for work-related activity, who should not be required to engage in that activity as a condition of getting benefit—and who will not be so required.
My noble friend Lord German and the noble Lord, Lord Knight, raised the matter of appeals. Joint work is under way across the DWP and the Tribunals Service to mitigate the impact of increasing workloads by focusing on four key areas: streamlining processes within both DWP and the Tribunals Service, including an end-to-end review of the appeals process; reducing the number of appeals by looking at the messaging we use to manage customer expectations and in particular the language in the disallowance letter; increasing capacity in the Tribunals Service through increasing administrative, judicial and medical resources; and strengthening the working relationship between DWP and the Tribunals Service. We believe that this will lead to an improved appeals service for our customers in due course.
My noble friend Lady Thomas raised the communications strategy issue. We will be developing additional sources of information for the reassessment process, focusing on how we will support our vulnerable customers in consultation with customer representative groups and advisory bodies. Details of these measures will be in place for the trials in October this year. We are also committed to engaging with customer representative groups so that they can support their customers through the migration journey. We have already consulted with national stakeholders over the development of key products for our customers. We also recognise the importance of working with local groups to support our customers through this process and are proactively engaging with third-party organisations in the trial locations.
Taxation has been raised by the Merits Committee and the Social Security Advisory Committee as a point of particular concern; it was raised again today, particularly by my noble friends Lady Thomas and Lord German. Currently, people who have been on IB and severe disablement allowance are exempt from liability for income tax. This provision was introduced in 1995 and has continued ever since. It means that, unlike all other IB claims and new contributory ESA claims, this diminishing number of claimants have never had to pay tax on their benefit if their income reaches the level at which tax becomes payable. We recognise that individuals in this position, especially if they also receive tax credits, could experience a significant reduction in their overall income, even if their benefit income is maintained by the regulations that we are debating today. On the other hand, they have received transitional protection for more than 15 years, which does not apply to more recent claimants, who have to pay tax on the same amount of income.
Baroness Thomas of Winchester
My Lords, I am grateful to all noble Lords who have spoken in this debate. I think that it has been valuable and I particularly welcome my noble friend Lord German to the DWP brief. He knows that the Chamber is not as full as it is on some matters it deals with, but all the better for that.
I was grateful to the noble Lord, Lord Knight, for explaining that we are in an Alice-through-the-looking-glass situation: my noble friend was the architect of his Government’s plans and now everything is reversed. This debate has brought out some of the real problems. We understand that the medical reports are not disease-specific, as it were; they look at what the person can do rather than what he cannot do.
However, the other side of the coin is the fact that there are an enormous number of appeals and a lot of them are successful, so something is going wrong. I was glad to hear him mention Professor Harrington's review—I remember that I have read it before. Presumably, if he suggests changes to the work capability assessment, that will be factored into my noble friend’s plans for legislation later in the year. Will it be dealt with then?
Lord Freud
I am pleased to clarify. Clearly, we will have Professor Harrington’s report later in the year. Timing depends on the exact nature of any recommendations that he may make. Obviously, we would like as many of those recommendations to be included as we can.
Baroness Thomas of Winchester
I was interested when the Minister said that the programme would be a challenge for Jobcentre Plus offices. That is probably the understatement of the year. I was a bit worried when he said that they will move cases around the network. I hope that that will not be done quite as it sounds—it sounds a rather curious thing to do—and that there will be a lot of telephone recruitment. I hope that it will all work.
I end by saying that my noble friend Lord German had the right phrase when he said, “It ain't what you do, it's the way that you do it”. That should be applied to the regulations. I am most grateful to all noble Lords who have spoken in this debate; I look forward to the Minister’s reply by letter, if he has not been able to answer some of the questions.