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Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
1. What recent steps his Department has taken to increase opportunities for young people to volunteer.
The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)
In the current financial year, the Department has provided £39 million in grants to the v organisation. On 22 July, the Prime Minister announced the introduction of the national citizen service to give young people an opportunity to develop the skills needed to be active and responsible citizens, mix with people from different backgrounds and start getting involved in their communities.
Mrs Hodgson
I thank the Minister for his response. At a fringe event at the Conservative party conference, I understand that the Minister for the Cabinet Office was quoted as saying that in his opinion the big society would be “chaotic and disorderly”. That being the case, I feel that his heart is perhaps not in it. How can he go on to encourage young people to volunteer so that they can pick up the right skills and be employed fruitfully in the future?
Mr Hurd
We are absolutely committed to that, and the national citizen service will be an extremely important opportunity to connect young people with their own power to make a difference in their communities. I know that the hon. Lady took a strong interest in that through her work on the Select Committee on Children, Schools and Families. If she had had the opportunity to talk to some of the young people who had taken part in this year’s pilot, she would have been as impressed as I was by the transformative effect that it had on them and on how they view their community and their own power to make a difference. We are very excited about it.
Duncan Hames (Chippenham) (LD)
Voluntary organisations in my constituency rely on the great efforts of many people who are retired, and they are crying out for younger volunteers. Those volunteers need not just be teenagers, however. What plans do the Government have to facilitate opportunities for volunteering by people of working age?
Mr Hurd
We have planned a series of initiatives for the forthcoming years to promote wider volunteering and to connect people again with their own power to make a difference locally—that is the heart of the big society. I cannot be drawn on the detail of those plans, because they are subject to the spending review.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
If voluntary service for young people is to work, the third sector has to still be alive. This afternoon the Chancellor is going to try to drive a steamroller over the big society. Can the Minister explain why, in answer to parliamentary questions from my hon. Friend the Member for Glasgow Central (Anas Sarwar), three quarters of Whitehall could not say what contracts they had in place with the third sector? How can the Department protect the third sector from cuts this afternoon if it does not know what contracts are in place? Is the Minister not, in effect, flying blind?
Mr Hurd
I suspect that the right hon. Gentleman will eat his words later when he hears the Chancellor. I do not see any steamroller in evidence in relation to the big society, which is absolutely central to the Government’s mission. A central strand of that mission is to open up the public services to a more diverse set of providers, including and specifically contributions from the voluntary and community sectors. As the right hon. Gentleman well knows, they are in a position to add a huge amount of value. That is a specific commitment of this Government, and we are going to deliver on it.
Stuart Andrew (Pudsey) (Con)
2. What steps he has taken to increase the efficiency of his Department’s mechanisms for Government procurement.
Julian Smith (Skipton and Ripon) (Con)
8. What steps he has taken to increase the efficiency of his Department’s mechanisms for Government procurement.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
Procurements of major projects by the British Government have typically taken 77 weeks. They have frequently involved the extensive use of external consultants. That process is costly and wasteful, excluding small businesses, social enterprises, and voluntary and charitable organisations. That results in procurements that are too often uncompetitive, delayed, expensive and ineffective. We are taking steps to streamline the process. In the meantime, we are renegotiating contracts with the bigger suppliers to the Government on a single-customer basis, thus leveraging the Government’s buying power. That will deliver some £800 million-worth of savings in this financial year alone.
Stuart Andrew
Sir Philip Green’s report showed just how little time the previous Government afforded to the basic principles of cost-effective commissioning and procurement. Does the Minister feel that that attitude is embodied in the ill-considered note left by the ex-Chief Secretary to the Treasury as he left his old job?
Mr Maude
If the last Government, including the right hon. Gentleman, had bothered to spend the time that we are spending getting into the unglamorous parts of Government spending to find out just how much money can be saved, he might not have felt it necessary to leave a note in quite the stark terms that he did, true though it was. The fact is that there is a huge amount of wasteful spending. Sir Philip Green has done a sterling service in picking up some stones and providing the evidence for that, and we will be acting on his recommendations to see how we can take costs out of the overheads of Government. That is the best way to protect front-line services and to protect the jobs of dedicated public servants, which the right hon. Gentleman claims to care about.
Julian Smith
Does my right hon. Friend agree that small business has been locked out of the procurement process for far too long? Will he start to give small businesses, particularly those in Yorkshire, a fairer crack of the whip?
Mr Maude
A big benefit arising from the changes that we are proposing to make to the way in which services are procured is that they will open the door to smaller businesses. Over-prescriptive procurements make it very expensive for small businesses to take the risk of committing to tendering, and they tend to be excluded on a self-selecting basis. We want to change that. It is our aspiration that 25% of contracts should be let with small and medium-sized enterprises. That is the direction in which we hope to go, and I am sure that my hon. Friend’s constituents in Yorkshire will take full advantage of it.
Gordon Banks (Ochil and South Perthshire) (Lab)
Will the Minister be able to publish information in future to show that his aspiration to help small business is not just an aspiration but a reality?
Mr Maude
One of the stark conclusions of Sir Philip Green’s review was that the quality of Government data is lamentably poor. It is not easy to know exactly what the position is. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) referred to the lack of centrally held data about contracts with the voluntary and charitable sector; that merely begins to illustrate the problem.
Mr Nigel Dodds (Belfast North) (DUP)
The Minister talks about small and medium-sized enterprises gaining more from Government contracts, but can he indicate what he is doing to ensure that there is a good spread of that throughout all regions of the United Kingdom?
Mr Maude
All regions and nations across the United Kingdom should be able to benefit from that aspiration. We are going to expose much more widely the tender documents that are available so that small businesses will find it much easier to take part in these sometimes quite intimidating processes that have excluded many of them in the past. [Interruption.]
Mr Speaker
Order. I understand that the House is eagerly anticipating later business, but when there is a constant hubbub it is very discourteous and most unfair both on the person wanting to ask the question and on the Minister deputed to answer it.
Charlie Elphicke (Dover) (Con)
3. What recent progress has been made on his Department’s review of non-departmental public bodies.
Chris Skidmore (Kingswood) (Con)
13. What recent progress has been made on his Department’s review of non-departmental public bodies.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
Last week I announced the first results of the Government’s review of quangos. This is a work in progress; the principal aim is to increase accountability. We believe that where the state carries out a function it should be accountable to a Minister or to a local council unless one of three rigorous tests is met. To pass, the function must be purely technical, tasked with measuring facts or figures, or plainly required to be politically impartial. We reviewed 901 bodies and intend that nearly 200 will cease to be NDPBs, and we will merge a further 118 and substantially reform a further 171.
Charlie Elphicke
Does the Minister agree that the review should include the misuse of public funds by quangos and public sector balance sheet organisations in paying lobbyists to brief against the Government or elected Members in the execution of their mandates?
Mr Maude
Guidelines already limit the use of external consultants for those purposes, and we intend to tighten them further, because the public find it quite offensive that a quango should be spending taxpayers’ money on hiring external consultants to lobby the Government to encourage them to spend more taxpayers’ money.
Chris Skidmore
Will the Minister tell the House how many quangos were created by the previous Government and, of those, how many will remain as a result of the changes that he is introducing?
Mr Maude
As I said, we will reduce significantly the number of NDPBs. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) was bragging the other day about how many quangos he was planning to get rid of, but sadly the last Labour Government failed to act on their intentions.
Albert Owen (Ynys Môn) (Lab)
Last week the Minister announced that many quangos would be done away with and their responsibilities transferred to third sector organisations. Will he assure the House and myself that those organisations, such as citizens advice bureaux, will be properly resourced so that they can provide people with specialised advice? Will he dispel the myth that this is being done on the cheap?
Mr Maude
The aim of the quango review is not particularly to save costs or money—although it will—but principally to increase accountability. When functions are transferred, such as consumer advocacy functions to CABs, there will be a transfer of resources. The hon. Gentleman will have to wait a little longer to hear the extent of those resources.
Mr David Lammy (Tottenham) (Lab)
Why does the Minister intend to disembowel the Equality and Human Rights Commission? Does he not believe that its responsibility to promote equality on behalf of women and ethnic minorities is important? Why is he reducing it to a purely regulatory body?
Mr Maude
Many people felt that that body was not spending taxpayers’ money well. Its function is important and we concluded that it justified the EHRC continuing to exist as an independent body, but given that we are facing a situation in which, as the former Chief Secretary helpfully pointed out, there is no money left, significant savings have to be made. The EHRC will have to play its part in that.
Mary Macleod (Brentford and Isleworth) (Con)
4. What recent progress has been made on establishing the national citizen service.
Charlotte Leslie (Bristol North West) (Con)
7. What recent progress has been made on establishing the national citizen service.
The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)
In July, the Prime Minister announced the start of the bidding process for providers of national citizen service pilots. We have been really pleased with the response, and in the next few weeks we expect to announce the successful bidders. We expect to provide places for about 10,000 young people, with a good geographical spread.
Mary Macleod
The national citizen service is a great example of how young people can make a difference in their local communities. What can I do to persuade people in Brentford and Isleworth to get more involved in the project?
Mr Hurd
I thank my hon. Friend for her interest. As I said, the successful bidders will be announced shortly. They will be responsible for recruiting local young people and communicating the opportunities in their area. If a pilot is run in her area, I urge her to support its provider, as I would urge all MPs to do. The experience of young people in the pilots that have already taken place just down the road from her in Hammersmith has been extremely positive.
Charlotte Leslie
In my constituency, some of the richest wards exist side by side with some of the poorest wards in the country. Can the Minister reassure me that children from more disadvantaged backgrounds will also be encouraged to get involved in the national citizen service?
Mr Hurd
I can certainly give my hon. Friend that assurance, and those children will be more than encouraged. Involving people from all kinds of backgrounds is a central aim of the programme and a key part of its value. As part of the commissioning process, organisations bidding to deliver a pilot next summer have been asked to set out their specific plans to support the broadest range of young people to participate. [Interruption.]
Mr Speaker
Order. There are still far too many private conversations taking place in the Chamber. I want to hear, and I hope the House wants to hear, Steve Rotheram.
Steve Rotheram (Liverpool, Walton) (Lab)
As a former employee of a quango, I am following the Minister’s much-vaunted “bonfire of the quangos”, as he called it. Now that the comprehensive spending review is upon us, can he tell the House what the total savings will be?
Mr Speaker
Order. Unfortunately, that question suffers from the disadvantage that it bears absolutely no relation to the question on the Order Paper. We must have another go, so I call Stella Creasy.
Stella Creasy (Walthamstow) (Lab/Co-op)
The tender document for the national citizen service pilot sets out the Government’s refusal to meet the total costs of the programme. Just how much of the bill does the Minister expect the voluntary sector and young people themselves to meet?
Mr Hurd
The cost of the pilots will be revealed as a result of the spending review. We are committed to two years of pilots to test a range of approaches to delivering the service, which will help us to identify the most cost-effective way forward. We will have a clear idea of the likely costs of a wider roll-out of the national citizen service once we have evaluated the two-year pilot phase.
Richard Fuller (Bedford) (Con)
5. What assessment he has made of the likely effect on social enterprises of reductions in Government expenditure.
The Minister of State, Cabinet Office (Mr Oliver Letwin)
Of course, social enterprises will be affected by the spending review. However, as part of our structural reform programme, we are bringing forward huge new opportunities for the social enterprises of this country—indeed, for the voluntary and community sector as a whole—to participate in the delivery of public services.
Richard Fuller
I am heartened by my right hon. Friend’s response. He may be aware of the current uncertainty surrounding Foxgloves residential home, which provides respite care for families of children with epilepsy and autism. It is working well with the council to find a solution, but other solutions should come from the community. Are there are any plans to bring forward the use of unclaimed assets so that social enterprises can draw on them to provide alternatives, and the parents at Foxgloves can continue to use it and secure its future?
Mr Letwin
The sort of case that my hon. Friend raises is relevant to our concerns, and we are very focused on that. It is one reason for our introducing the big society bank, which will be partly funded in just the way that he describes, and can, in turn, fund social enterprises and voluntary and community service organisations that require funding in the interim.
Roberta Blackman-Woods (City of Durham) (Lab)
According to research by the National Council for Voluntary Organisations, third sector organisations that provide education and training opportunities could be the most imperilled by public spending cuts. What is the Minister doing to ensure that training opportunities in the third sector remain? Has he pressed the Department for Business, Innovation and Skills and the Treasury on that?
Mr Letwin
I think that the reverse will turn out to be the case, in the sense that the Government are planning a huge and terribly important Work programme, which will focus heavily on not only getting people into jobs, but training them for jobs. We are also greatly enlarging the programme of apprenticeships, and there are various other elements, about which hon. Members will hear in the spending review announcement. Consequently, we anticipate more, not fewer opportunities for voluntary and community organisations to participate in training and employment.
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
6. What recent progress has been made in delivering his Department’s policies on Government commissioning and procurement.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
Commissioning is currently too prescriptive; tender documents can be immensely lengthy, specifying every detail of every step in every process. That stifles innovation, excludes new entrants to the market and adds wholly unnecessary cost. We intend that commissioning should be outcome-based, leaving much more scope for innovative providers from the social enterprise, voluntary, charitable and small business sectors to bid. Whenever possible, commissioning should be based on a payment-by-results model.
On procurement, I refer my hon. Friend to my reply to Question 2. [Interruption.]
Mr Speaker
Order. Once again, I understand the excitement and anticipation, but the House must come to order. Such conduct makes a bad impression on the electorate, whose support we so recently sought.
Stephen Metcalfe
I thank my right hon. Friend the Minister for his answer. Following his earlier comments, I seek assurance that small and medium-sized enterprises in my constituency can access Government contracts. Can he give me any examples of practical help now or in future that would make that easier to achieve?
Mr Maude
We certainly hope that that will be the case. It is our aspiration that 25% of Government contracts should end up in the small and medium-sized sector. We are committed to publishing online, in an easily accessible form, all Government tender documents. That will make it much easier for small businesses, which can otherwise be put off the process, to take part.
Jon Trickett (Hemsworth) (Lab)
In terms of commissioning and procurement, the public sector procures £13 billion-worth of services from the charitable sector. On Monday, a think-tank suggested that the Government’s statement today will wipe out about £5 billion of that procurement—the whole of the increase that was achieved in the past 10 years. What are the Minister’s intentions for funding the voluntary sector? How does he reconcile cuts in that sector with the Prime Minister’s aspiration for the big society?
Mr Maude
We are very aware of concerns in the sector. The Chancellor is very aware of them, and will have something to say about the matter a little later. However, there must be reductions in public spending for the simple reason that the former Chief Secretary set out with such uncharacteristic lucidity in his valedictory note.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
9. What recent assessment he has made of the effectiveness of the use of third sector organisations by local authorities in delivering public services.
The Minister of State, Cabinet Office (Mr Oliver Letwin)
As I mentioned in my response to my hon. Friend the Member for Bedford (Richard Fuller), the Government believe that the voluntary and community sector has a huge role to play in providing public services. Indeed, our intention is vastly to enlarge the potential for that to occur.
Catherine McKinnell
Newcastle city council has reassured me of its commitment to using the voluntary sector, but what will the Minister do to ensure that the severe cuts to local authority funding do not mean that the big society is just an underfunded big con?
Mr Letwin
We are extremely conscious of the fact that there may be a gap between when we introduce the new reforms that I described and when the effect of the expenditure cuts is felt. My right hon. Friend the Chancellor will have very much to say on that when he makes his statement, and I would not want to pre-empt what he will say on how we will handle that situation.
Ben Gummer (Ipswich) (Con)
Suffolk county council was recently part of the body that commissioned drug and alcohol treatment services in Suffolk. Unfortunately, a very small, excellent charity in my constituency—the Iceni Project—was excluded from that process because of its size. What can the Minister do to ensure that the Iceni Project will be included, and will he agree to meet it and me?
Mr Letwin
I would of course be delighted to meet my hon. Friend and the charity in question. As we restructure contracts in the way in which my right hon. Friend the Minister for the Cabinet Office mentioned—away from hugely prescriptive tender contracts and into payment by results—I hope we will find that there are huge opportunities for charities such as the small one in my hon. Friend’s constituency to participate and deliver excellent results. We should not have the huge bureaucratic burdens that prevent the smaller voluntary and community organisations from participating.
Helen Goodman (Bishop Auckland) (Lab)
I am sorry to say that the Minister sounds rather naive. I went to visit Crisis in Sunderland. Three quarters of its money comes from a combination of housing benefit and local government grant. When both those are cut, how can it maintain its services?
Mr Letwin
I think the hon. Lady is ignoring the extent to which our programme of structural reform will enlarge opportunities for people to participate in services from the voluntary and community sector—[Laughter.] Opposition Members may not believe that, but that is because they did not try to find ways to deliver services on the basis of payment by results, or to find ways that actually work. We know that voluntary and community organisations are capable of that. When they do it, they will find that there is access to a large amount of revenue that is currently denied to them.
Mark Pawsey (Rugby) (Con)
10. What steps his Department is taking to share best practice in procurement among Departments.
The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)
Procurement of basic commodities was carried out without any effort to leverage the scale and buying power of the whole Government—[Interruption.]
Mr Speaker
Order. I understand the excitement, but I hope that that practice, which was discontinued some time ago, will be discontinued in future. The Minister must be heard.
Mr Maude
That led to one part of the Government buying basic office supplies at seven and a half times the cost that other parts incurred. Allowing wasteful spending of that type to remain unreformed would mean that front-line services and the jobs of dedicated public servants would be more at risk. We are mandating that all Departments and public bodies should in future buy through supplier contracts negotiated on behalf of the whole of central Government. That will cut the costs of Government overheads by some—[Interruption]
Mr Speaker
Order—[Interruption.] Order. In so far as we could hear the Minister, I think we have got the drift of it.
Mark Pawsey
I thank the Minister for his reply in as much as I heard it. It is sound commercial practice to maximise buying power by adding together the purchases of all bodies within an organisation and to use that to drive down prices from suppliers, yet Sir Philip Green found waste arising from huge variation in the prices paid by different Departments. What steps will the Minister take to co-ordinate Government procurement in future?
Dr Alan Whitehead (Southampton, Test) (Lab)
Will the Minister ensure that best practice in sustainable and green procurement is part of his briefing in ensuring best practice in Departments, and does he consider that the abolition of the Sustainable Development Commission will help or hinder him in that process?
Mr Peter Bone (Wellingborough) (Con)
Q1. If he will list his official engagements for Wednesday 20 October.
The Prime Minister (Mr David Cameron)
This morning I had meetings with ministerial colleagues and others and, in addition to my duties in the House, I shall have further such meetings later today.
Mr Bone
During this Parliament, our contributions to the European Union will increase by £17.5 billion, so yesterday’s cuts to the defence budget will not go to reduce the deficit, but to subsidise our European partners. This is obscene. What would the Prime Minister like to say to the European Union?
The Prime Minister
First, the point is that the previous Government gave away some £8 billion of rebate and got nothing in return. I am clear that we will not accept any increases in the EU budget in the next seven-year financial perspective. We have called for a cash freeze in the size of the EU budget for 2011 and we are working hard to make this case across Europe. Just yesterday, I spoke to the new Dutch Prime Minister as he is another ally in trying to ensure that, as we make difficult decisions at home, we do not spend extra money on the EU budget.
Edward Miliband (Doncaster North) (Lab)
I want to start by asking the Prime Minister about something that the Justice Secretary said. Unfortunately, he has become part of the “squeezed middle” due to the logjam on the Tory Front Bench. Three weeks ago, the Justice Secretary—a former Chancellor—said:
“I do not rule out the risk of a double-dip recession”.
On the same day, the Prime Minister said that the UK economy was out of the danger zone. Which of them is right?
The Prime Minister
First, let me compliment the Justice Secretary because he has something that I am not sure the Leader of the Opposition has yet acquired, which is bottom.
If the Leader of the Opposition read out the full quotation from the Lord Chancellor he would find that it referred to western Europe as a whole. That is the point. Perhaps he would like to read out the whole quote now.
Edward Miliband
The—[Interruption.] Let me be very clear about this. The Justice Secretary said:
“I do not rule out the risk of a double-dip recession”
because of global fear and crisis. He was talking about the United Kingdom. It is a very simple question for the Prime Minister. Who is right? Is it the Justice Secretary when he does not rule out the risk of a double-dip recession? Or is the Prime Minister saying that the Justice Secretary has put his foot—or his Hush Puppy—in it? Is he saying that the Justice Secretary was wrong to say that there was a risk of double-dip recession in the UK?
The Prime Minister
Of course, the Leader of the Opposition must ask the questions and I must answer them, but he must—if I may say so—ask a complete question which should include the complete quotation. Have another go.
Mr Speaker
Order. I want time for Back Benchers, especially those on the Order Paper. Let us make some progress.
Edward Miliband
Look, the Prime Minister knows as well as I do that there are risks in the global economy, including to the United Kingdom. The Chief Secretary revealed yesterday that half a million jobs will be lost as the result of the Chancellor’s announcements today. What people who are in fear of losing their jobs will want to know is what the consequences of the spending review will be for them. They will think that this spending review will be a failure if it leads to rising unemployment next year. Will the Prime Minister say that he agrees with them that the spending review will be a failure if unemployment were to rise next year—yes or no?
The Prime Minister
That is a much better question; I think we are making some progress. The whole point of the Government’s approach is to take the British economy out of the danger zone, which is where it was left by the last Government. This is very important: the choice that we were left with when we came into power was to accept what the last Government had set out, but this is what was said about that. The Governor of the Bank of England said that it was “not a credible plan”, the CBI said that it was not a “credible path”, the OECD said that it was a “weak fiscal position”, and the IMF said that it was not good enough. We had a choice: should we keep what we were left with or should we take bold action to get Britain out of the danger zone? That is what we have done. That is what today is all about, and it is time that the right hon. Gentleman asked something relevant to that.
Edward Miliband
The Prime Minister began by saying that it was a good question, then he said that it was irrelevant. Which is it? Let me give him another—[Interruption.] I know that he is getting advice from the Chancellor; he can answer the questions himself. Let me try the Prime Minister on another question, because he did not answer that one.
The Energy Secretary, who does not seem to be around—[Hon. Members: “He is here!”] Oh, he is there. Excellent. I am glad that he is here. The Energy Secretary says that the Government should not be “lashed to the mast” of the Government’s tax and spending numbers were economic circumstances to change. Does the Prime Minister agree? In particular, if at the end of November the Office for Budget Responsibility were to forecast a rise in unemployment next year, does the Prime Minister think that the tax and spending judgments of the Government should change? Yes or no?
The Prime Minister
First, to respond to what the right hon. Gentleman said about me and the Chancellor, I know that it is a novel concept, but in this Government the Prime Minister and the Chancellor speak to each other.
On unemployment, the independent Office for Budget Responsibility—which we have established and which is fully independent—is forecasting that unemployment will fall next year, the year after and the year after that. It is forecasting that employment—[Interruption.] One question at a time, please. The right hon. Gentleman is very eager. The Office for Budget Responsibility also forecasts that employment will rise next year, the year after and the year after that. That is the independent forecast, and one of the reasons for that is that we have taken the economy out of the danger zone. He asks about the Energy Secretary, but what is interesting about this Government is that two parties have come together in the national interest to sort out the economic mess that was left by the other. That is what has happened, and that is why there is real unity in this Government in dealing with the mess that we inherited.
Edward Miliband
Let me give the Prime Minister another chance, because the truth is that the global economic outlook is uncertain, as the former Chancellor admits—the Prime Minister does not really want to admit it—and it could affect the UK. The question that people will be asking as they watch these exchanges is this: if things change, and if unemployment were to rise next year, will the Government revise their tax and spending plans? It is a simple question; the Prime Minister can just say yes or no.
The Prime Minister
Where the right hon. Gentleman is absolutely right is that we live in a dangerous world economy, and the outlook for the world economy is choppy and difficult. That is what the Justice Secretary was talking about and what the Chancellor has been talking about. The question for the Government is this: in an uncertain world economy, are we taking the British economy out of the danger zone? Are we doing the right thing to protect the long-term interests of people’s jobs and livelihoods? That is what we are doing. What the right hon. Gentleman is doing is thoroughly irresponsible, and I think he probably knows it.
Edward Miliband
This is very interesting, because the Prime Minister used to say that he was a different type of Conservative, but I have given him the chance to say that he will change his plans if unemployment rises, and he has ducked the chance to do so. We all remember the catchphrases: “If it isn’t hurting, it isn’t working”; “Unemployment is a price worth paying.” He sounds exactly like that. What we have is a Prime Minister lashed to the mast of the tax and spending plans. Should he not admit it? He is taking the biggest gamble in a generation—with growth, with people’s jobs and with people’s livelihoods.
The Prime Minister
We all remember some catch phrases: “No more boom and bust”—remember that one?—and “Prudence with a purpose”, which left us with the biggest budget deficit in the G20. We remember that, and who was the economic adviser at the Treasury at the time? He is sitting right there—[Interruption.]
The Prime Minister
Let me give the right hon. Gentleman one simple piece of advice that I learned sitting in his seat for five years: if you have not got a plan, you cannot attack a plan. He has not got a plan, so he has got nothing to say—[Interruption.]
Nicky Morgan (Loughborough) (Con)
Charnwood borough council has completed the online publication, three months early, of all its expenses over £500. In the light of today’s announcements, is it not right that taxpayers want to know exactly how much is spent in their name and what the money is spent on?
The Prime Minister
My hon. Friend is absolutely right, and one of the ways that we will try to save money while not losing too many jobs in the public sector is by making sure that we are more efficient. One of the best tools for efficiency is transparency: putting online what is spent and how it is spent, and what people’s salaries are can help to drive down costs in a way that makes public services better while saving money at the same time.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Q2. Many of my constituents fear for their jobs. Will the Prime Minister reassure them by explaining how cutting science funding is part of a strategy for growth? Germany is increasing its science funding by 7%. On jobs, is the Prime Minister’s message to Newcastle: “Auf wiedersehen, pet”?
The Prime Minister
The hon. Lady makes a very good point, which is that, in making spending reductions—whoever had won the last election would have had to make spending reductions—it is vitally important that we try to protect economic growth. The last Government were committed to 20% departmental spending reductions, and I can say—without, I hope, pre-empting all of my right hon. Friend the Chancellor of the Exchequer’s statement—that I hope she and the whole House will find that we have struggled hard but we have been able to freeze the science budget in cash terms, which is a good outcome for science.
Mr Oliver Heald (North East Hertfordshire) (Con)
Will the Prime Minister join me in paying tribute to the work of Save the Children and other charities that deal with development work in some of the most difficult places in the world? Does he share my delight in today’s news of the release of Frans Barnard in Somalia?
The Prime Minister
I do, and I am very grateful to my hon. Friend for raising this case. We have been in close contact with Save the Children over the kidnap of Frans Barnard, who is doing vitally important work on its behalf in Somalia, and we are delighted by the news that he has been freed by his kidnappers. Let me praise the professionalism of Save the Children and thank the Somali clan members who were involved in his release. I am sure that it will be good for him to be back with his family after what must have been a very frightening and difficult few days.
Sandra Osborne (Ayr, Carrick and Cumnock) (Lab)
Q3. On the day when more than 2,000 supporters of Christian Aid, including some from my own constituency, have come to Parliament in support of a cross-party consensus on protecting the aid budget, does the Prime Minister agree that we should be leading a global crackdown on the tax-dodging that costs poor countries more each year than they actually receive in aid?
The Prime Minister
I do; on a day when I am sure that there will not be cross-party agreement on everything that is discussed, we should just take one moment to celebrate the fact that this country, almost alone among other countries, is going to meet the United Nations target of 0.7% of gross national income for overseas aid by 2013. We have made difficult choices under this Government in order to deliver that, and to keep our international promise to some of the poorest people in the world. Every party in the House can be proud of the role that it will play in ensuring that Britain stands up for aid in our modern world, and we can put pressure on other countries to do the same thing.
Jessica Lee (Erewash) (Con)
Will the Prime Minister join me in backing the supporters of Ilkeston Town football club in my constituency who are working hard to put together a bid to save the club? If they are successful, it will be the first supporter-owned football club under the new coalition Government, and a real asset to us in Erewash.
The Prime Minister
My hon. Friend makes a good point. Many hon. Members will have football clubs in their constituencies that sometimes struggle financially, and seeing one owned by its supporters is a very positive move. I hope she will not mind if I spend more of my time on another football bid, which is the very important bid to make sure that England hosts the World cup in 2018.
Lindsay Roy (Glenrothes) (Lab)
Q4. I have already briefed the Prime Minister on the likely impact of the interim cap on migrant workers on a leading-edge company in my constituency. The one graduate sponsorship licence issued has suddenly been withdrawn. Can the Prime Minister assure me that he will review this case urgently, as this expert is pivotal to growth and jobs in our community?
The Prime Minister
I thank the hon. Gentleman for giving me notice of his question. I will arrange for the Minister for Immigration to look urgently at this case. The point is that we have consulted business and other interested parties on how the limit should work. We have also asked the Migration Advisory Committee to consult on what the actual limit should be. The consultations are closed and we will announce the findings in due course. The reason for an interim cap is that it was important to have a temporary limit to ensure that there was no closing-down sale, as it were, before the final limit was introduced. I will make sure that the Minister for Immigration gets in touch with the hon. Gentleman about this case.
Mr Christopher Chope (Christchurch) (Con)
Q5. May I ask my right hon. Friend a question of which I have given him prior notice? Will he tell the House why he believes that the first-past-the-post system for election is far fairer than the alternative vote system?
The Prime Minister
My hon. Friend tempts me into answers that will not delight everyone on this side of the House. I am clear that I have always supported the first-past-the-post system. I like to have the individual link between constituency and MP. In some cases, the alternative vote would have led to even more disproportional outcomes in national elections. Let me thank my hon. Friends who I know have misgivings about this referendum for allowing the Parliamentary Voting System and Constituencies Bill to go through. I think we should make this argument in the country rather than try to wreck the Bill in the House.
Dr William McCrea (South Antrim) (DUP)
Q6. Now that the final day of the Chancellor’s judgment has arrived, can the Prime Minister assure me by confirming that the decision taken on the 50,000 savers of the Presbyterian Mutual Society will be both fair and equitable? Will he assure us that no sleight of hand will be used in delivering the full financial package promised by the previous Administration to the Northern Ireland Executive?
The Prime Minister
I thank the hon. Gentleman for his question. Having already announced one of the Chancellor’s nuggets from his speech, it would be testing our friendship if I announced another. I gave my word about finding a settlement for the PMS. I know how important this is in Northern Ireland. I know that people lost money and that there was frustration that Ministers would stand at the Dispatch Box and say that no one had lost money during the financial crash—they did in the PMS. I hope that the hon. Gentleman will be satisfied by what the Chancellor has to say in a moment.
Dan Byles (North Warwickshire) (Con)
Last week, I joined a parliamentary delegation to China, where I was able to pick up a copy of Chairman Mao’s “Little Red Book”. Is the Prime Minister interested to learn that Chairman Mao said:
“Thrift should be the guiding principle in our government expenditure.”?
If Mao Tse-tung supports coalition policy, does that not mean that the Labour party is in a minority of one?
The Prime Minister
I am glad that my hon. Friend has been travelling and seeing the world. [Interruption.]
Mr Speaker
Order. I want to hear the Prime Minister’s views about Chairman Mao.
The Prime Minister
I am glad that my hon. Friend is travelling the world and learning so much. We learned a few weeks ago that even Cuba is making reductions in public spending, so I think this puts the modern Labour party somewhere between China and Cuba—but I am not quite sure where.
Michael Connarty (Linlithgow and East Falkirk) (Lab)
Q7. Following a meeting with the Northern Ireland human rights commissioners yesterday, it is clear that this Government intend to breach the spirit and the letter of the Good Friday and the St Andrews agreements by refusing to bring in a Human Rights Act specifically for Northern Ireland, as recommended by the commission and supported recently by more than 80% of the Protestant and Catholic communities. How can the Prime Minister possibly excuse this betrayal of the people of Northern Ireland?
The Prime Minister
I thank the hon. Gentleman for his question. I will look at that carefully; I know that it has been discussed. It is a difficult issue and there are some problems that we need to resolve, but I will look at it and write to the hon. Gentleman.
Mr David Nuttall (Bury North) (Con)
Does the Prime Minister agree that it is completely unacceptable that the European Union is expanding its bureaucracy while here in the UK we are cutting ours?
The Prime Minister
I agree with my hon. Friend. This is a point that I have made at the European Council in the past and that I will make again at the next one. There are allies for these views in Europe. I talked about the Dutch Prime Minister; the Germans are also unwilling to see increases in the budget in future. We need to work with these allies to try to explain that it is just unacceptable. When we are making difficult decisions at home, Europe should be doing the same with its own budget.
Mr Tom Watson (West Bromwich East) (Lab)
Q8. Is it wise and right that Ministers invest in offshore tax havens?
The Prime Minister
I think that that issue was fully raised by Channel 4, and fully answered by the Government. Everyone should obey the law; everyone should pay their taxes.
Philip Davies (Shipley) (Con)
Q9. Despite the Prime Minister’s earlier answers, can I tell him that at a time when we are cutting budgets in this country, it is absolutely unacceptable that the Government rubber-stamped an increase in the budget of the European Union? Given that he pledged at the general election that only two budgets would be ring-fenced—those for the health service and overseas aid—will the Government go to the European Union and say that we are not only talking about freezing the budget, but want it to take the pain and cut its budget?
The Prime Minister
My hon. Friend makes a fair point, but the fact is that we opposed the increase in the budget that he voted against the other night, and will go on opposing increases in the budget. The key is the next financial perspective: that is the best way in which to control the budget. We need to build allies for that, we need to build our argument for that, and we need to make sure that Europe starts to live within its means.
Mr David Anderson (Blaydon) (Lab)
Q10. The North East chamber of commerce has reported that 17,000 construction jobs are at risk as a direct result of proposed cuts in local councils. For some of us in the House, unemployment is not just a subject for theoretical discussion. Some of us have lived through and experienced the real desolation that unemployment means. Will the Prime Minister now tell us clearly whether he believes today what he believed in 1992—that unemployment is a price worth paying?
The Prime Minister
I do not take that view at all. I take the view that we must do everything we can to get our people into good and well-paid jobs. I have to say, however, that if we do not tackle the deficit, every job in the country will be under threat. That is the point. We are not doing this because we want to; there is no ideological zeal in doing this. We are doing this because we have to.
The hon. Gentleman mentioned the British Chambers of Commerce. What the British Chambers of Commerce said at the time of the Budget was that this
“will have positive effects on business and investor confidence”
and
“will be welcomed by companies the length and breadth of the country—and across the globe.”
That is what the chambers of commerce think. They think that we are right to take this action, and they think that the Labour party is wrong.
Mr David Evennett (Bexleyheath and Crayford) (Con)
Q11. Does my right hon. Friend agree that you do not need a basic economics primer to know that when there is a £44 billion black hole in the public finances, you should not propose additional commitments of £10 billion in speeches made outside the House around the country?
The Prime Minister
And in speeches after which they will not answer any questions, which is a novel approach.
My hon. Friend is right. We have a problem with the deficit in this country, and we have got to deal with it. We have set out the ways in which we are going to do that, and we have set out a plan. The Opposition do not have a plan, and you cannot attack a plan unless you have one yourself. If all you can do is come up with extra taxes for extra spending, you are completely irrelevant to the debate in the country today about how we pay down our debts. That is the question, and we have the answer.
Mrs Jenny Chapman (Darlington) (Lab)
Q12. Given the Prime Minister’s repeated assurances that the north-east has nothing to fear from him, his Government, and public sector job cuts because he believes that the private sector will thrive in the vacuum, can he name just three businesses in the north-east that he believes will be expanding their work forces in the next 12 months?
The Prime Minister
This week 38 businesses wrote to the papers backing the action. Those businesses were spread right across the country, but let me give the hon. Lady some satisfaction in terms of the north-east. I believe that the north-east has a great future in renewable energy, and she is about to hear that we are protecting capital spending so that the carbon capture and storage projects will go ahead and the investment in wind power will go ahead. As for the green investment bank, which lots of people have talked about, we will be putting proper money into it so that it can invest in the north-east and elsewhere in the country.
Nick Boles (Grantham and Stamford) (Con)
Q13. Can my right hon. Friend reassure my constituents who rely on the excellent hospitals in Grantham and Stamford that he has rejected the advice of the shadow Chancellor, and will protect spending on our NHS?
The Prime Minister
I can absolutely give that guarantee. That is something on which we fought the election, something that is in the coalition agreement, and something that my right hon. Friend the Chancellor will be delivering.
We will have to make difficult decisions, including difficult decisions about the NHS, but what I can say is that we will fulfil our promise that national health spending will not be cut in real terms under this Government. That is a big contrast with what we hear from the Labour party, which has said in terms—particularly the shadow Chancellor—that protecting the national health service is wrong. We do not agree: we think that it is right.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
When the Prime Minister accused Labour Members of scaremongering during the general election for highlighting the Conservative threat to take security of tenure from council tenants and impose massive rent increases on them, was he goading us to use unparliamentary language or was he simply being economical with the truth?
The Prime Minister
The right hon. Gentleman will hear in a minute what our plans are for bold housing reform that will lead to more social homes being built, but it does not actually involve changes to tenure. I do think that we have to look at new ways to get houses built. The fact is that under the last Government we had housing targets and vast amounts of investment in social housing, but house building was lower in every year of the last Government than it was under the previous Conservative Government. That is a common story: vast amounts of money spent, with very poor results.
Annette Brooke (Mid Dorset and North Poole) (LD)
Q14. Last week, a special day was allocated to raising awareness of secondary breast cancer. There is an urgent need to collect good data on people living with secondary breast cancer in order to improve the outcomes for people living with that incurable disease. Would the Prime Minister be prepared to meet a delegation from the all-party group on breast cancer and a few people from the relevant charities?
The Prime Minister
I will be very happy to do that, and the hon. Lady is right to raise this issue. We do have a good record on cancer in this country, but it needs to be a lot better if we are to get it up to the best level in Europe. Part of that is about early diagnosis, which I have spoken about and on which I know the Health Secretary is taking action. However, as she says, all of us will have met in our own constituencies people with secondary breast cancer and we need to give the issue more attention. I will be happy to have the meeting she suggests.
Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)
Q15. Four years ago, Gary Dunne, from my constituency, was murdered in Spain. His parents, Lesley and Steve, have fought a long and ultimately successful campaign to have his body returned for burial in this country. Would the Prime Minister agree to meet Mr and Mrs Dunne to discuss proposals for changes in the law, so that no other family has to go through the ordeal that they went through?
The Prime Minister
The hon. Gentleman raises a very important case. Anyone who has lost a relative who has died overseas knows the enormous worry about how to deal with these issues and how to get things sorted out. On behalf of the whole Government and the House, I send my condolences to Mr and Mrs Dunne. I know that they have dealt with this case with great dignity and courage. I hope that the fact that they have now been able to bury their son in the UK will help them to start to come to terms with their terrible loss. I am very happy to meet them and try to work out what we can do to deal with sad situations such as this. There is a problem when different countries have different rules, particularly where the death has occurred some time before, but we should try to work it through and I am happy to meet them.
Duncan Hames (Chippenham) (LD)
Does the Prime Minister agree that, if graduates are to be asked to make a greater contribution to the cost of their education, in order to be fair those with the greatest ability to pay should make the greatest contribution?
The Prime Minister
Yes, I completely agree. In the end, I think that almost everyone in this House wants the same thing: we want well-funded universities; we want universities that are able to exercise some independence; we want a growing higher education sector; we want people from low-income backgrounds to be able to go to the best universities in the country; and we want a proper element of progressivity. That is what Lord Browne proposes, and we are going to amend that to make it even more progressive. In particular, I think that moving the salary before you start to pay back from £15,000, which we had for many years, to £21,000 is a really big step forward. I hope that we can get all-party agreement for what would be a good and proper reform of higher education for the long term in our country.
Mr Virendra Sharma (Ealing, Southall) (Lab)
I am sorry for not giving the prior notice to the Prime Minister, but I am confident that, given his reassurance on the NHS, he will be able to answer my question this afternoon. Does he agree with me and the Secretary of State for Health that it makes no sense to close Ealing hospital’s accident and emergency department, given that 100,000 patients use this service each year? Will the Prime Minister also take this opportunity to end rumours of coalition plans to close the entire Ealing hospital?
The Prime Minister
I will have to get back to the hon. Gentleman on the detail of his question, but we believe that those top-down reorganisations that took place in the NHS, in which many accident and emergency units were closed without taking into account what local people wanted, were wrong. The whole point of the reform of the NHS is to put power in the hands of patients and doctors, so decisions about hospitals will be made on the basis of what local people want and not on the whim of Ministers.
Andrew Selous (South West Bedfordshire) (Con)
Many of my constituents are gravely concerned that when young people are found guilty of serious crimes and offences and get off with a caution no action is taken against their parents. Will the Prime Minister agree to consider that matter and perhaps to have words with the Justice Secretary about what could be done?
The Prime Minister
I am very happy to look into that issue. As we seek efficiencies and savings in the Home Office and the Ministry of Justice, we are going to have to be reformers. We are going to have to be more thoughtful and creative about how we have a criminal justice system that carries out punishment in which the public are confident, but that is not so wasteful of public money as what we have now. It is a challenge for us and it is a challenge that we will have to rise and meet.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
It looks as if there is a possible end to the current industrial dispute at British Airways. Will the Prime Minister join me in sending a clear message to senior management at British Airways that should the cabin crew decide to return to normal working, there should be no harassment, no bullying and, most importantly, no recriminations?
The Prime Minister
I think the most important thing is that this strike ends—that this action ends—and that British Airways gets back to working properly. The fact is that there is a hugely competitive airlines sector out there and those of us who love our national carrier and want it to be a success want to see people go back to work and work out how to make it compete with others that are striving ahead in the world. That is what we need, and the last Government did not really say that.
Mr Speaker
Order. Before the Chancellor comes to the Dispatch Box to make his statement, let me say to the hon. Member for Linlithgow and East Falkirk (Michael Connarty) that points of order come after statements.
Comprehensive Spending Review
(13 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chancellor of the Exchequer (Mr George Osborne)
Today is the day when Britain steps back from the brink and when we confront the bills from a decade of debt; a day of rebuilding, when we set out a four-year plan to put our public services and welfare state on a sustainable footing for the long term, so that they can do their job of providing for families, protecting the vulnerable and underpinning a competitive economy. It is a hard road, but it leads to a better future.
We are going to bring the years of ever-rising borrowing to an end. We are going to ensure, like every solvent household in the country, that what we buy we can afford, that the bills we incur we have the income to meet and that we do not saddle our children with the interest on the interest on the interest on the debts that we were not prepared ourselves to pay.
Tackling this budget deficit is unavoidable. The decisions about how we do it are not. There are choices, and today we make them. Investment in the future, rather than the bills of past failure: that is our choice. We have chosen to spend on the country’s most important priorities: the health care of our people; the education of our young; our nation’s security; and the infrastructure that supports our economic growth. We have chosen to cut the waste and reform the welfare system that our country can no longer afford.
This is the context of this spending review. We have, at £109 billion, the largest structural budget deficit in Europe—this at a time when the whole world is concerned about high deficits and our economic stability depends on allaying those concerns. We are paying at the rate of £120 million a day, £43 billion a year in debt interest—this at a time when we all know that the money would far better serve the needs of our own citizens than those of the foreign creditors we borrow from. We have inherited from the previous Government plans—if one can call them that—that envisaged our national debt ratio still rising in the year 2014. Not a single penny of savings had been identified. Indeed, they were plans that envisaged the Chancellor of the Exchequer standing here in 2014, presenting a spending review that still had years of cutting public spending ahead of it. That is why, last year, the International Monetary Fund warned this country that it had to accelerate the reduction in the deficit. That is why the OECD, the Governor of the Bank of England and the CBI all agreed with the IMF.
The action we have taken since May has taken Britain out of the financial danger zone. The immediate reductions to in-year spending have bought us a breathing space in the sovereign debt storm. The creation of an independent Office for Budget Responsibility has brought honesty back to official forecasts. I can confirm to the House that the OBR and its new chair, Robert Chote, have audited all the annually managed expenditure savings in today’s statement.
The emergency Budget in June was the moment when fiscal credibility was restored. Our market interest rates fell to near-record lows, our country’s credit rating was reaffirmed and the IMF went from issuing warnings to calling our Budget essential. Now we must implement some of the key decisions required by that Budget. To back down now and abandon our plans would be the road to economic ruin. We will stick to the course, we will secure our country’s stability and we will not take Britain back to the brink of bankruptcy.
In the Budget, I set out the tax increases we were prepared to make, including on capital gains at the higher rate, pensions relief on the largest contributions and, for the first time, a permanent levy on banks. We also had to increase value added tax, where, fortunately, we were able to benefit from the preparatory work in the Treasury of the previous Government. I made it clear that spending reductions rather than tax rises needed to make up the bulk of the consolidation. That is what the leading international evidence suggests works best. So I set out spending totals for the coming years and announced some £11 billion of welfare savings that would help to achieve them. I also set out a new fiscal mandate for the public finances to eliminate the structural deficit by balancing the cyclically adjusted current Budget over five years by 2015-16. We set a target of national debt falling as a proportion of national income by that same year. We explained how, for reasons of caution, we will achieve both these objectives a year earlier, in 2014-15.
I can confirm that the spending plans I set out today achieve a balanced structural current Budget and falling national debt on the same timetable. I can further confirm that the current spending totals I set out in the Budget for each of the next four years are the same as the current spending totals I set out today. They have not changed. Next year, current expenditure will be £651 billion, then £665 billion the year after and £679 billion the year after that, before reaching £693 billion in 2014-15. The House will note that current spending is rising, not falling, over that period. That is partly because, even with the measures we take today, debt interest payments continue to grow in these years. Debt interest payments will reach £63 billion in 2014-15—it takes time to turn around the debt supertanker—but I can now report to the House that against the plans we inherited, one of the departments which suffers the greatest cut today, and at the steepest rate, is the department for debt interest. Debt interest payments will be lowered by £1 billion in 2012, then by £1.8 billion in 2013 and by £3 billion in 2014—a total of £5 billion over the course of the spending review, which is equivalent to 16 new hospitals or the annual salaries of 100,000 teachers.
At the Budget, I also set out my plans for capital spending over the next four years. I can tell the House that capital spending will be at £51 billion next year, then £49 billion, then £46 billion and at £47 billion in 2014-15. This is about £2 billion a year higher than I set out in the Budget. Given the contractual obligations we inherited from the last Government, doing anything else would have meant cutting projects that would clearly enhance the economic infrastructure of this country. This has no direct impact on whether we meet the fiscal mandate or the year in which the debt ratio starts falling. So, total public expenditure—capital and current—over the coming years will be £702 billion next year, then £713 billion, then £724 billion and £740 billion in 2014-15. In real terms, public spending will be at the same level as in 2008. Our public services and our welfare system will be put on a sustainable long-term footing and we will make sure that the financial catastrophe that happened under the previous Government never, ever happens again.
Let me now turn to the spending decisions and the three principles that we propose to apply to the choices that we have made. First, on reform, in every area where we make savings, we must leave no stone unturned in our search for waste, and we must deliver the changes necessary to make our public services fit for the modern age.
Secondly, on fairness, we are all in this together and all must make a contribution. Fairness means creating a welfare system that helps the vulnerable, supports people into work and is affordable for the working families who pay for it from their taxes. Fairness also means that, across the entire deficit reduction plan, those with the broadest shoulders will bear the greatest burden; those with the most should pay the most, and that includes our banks.
Thirdly, on growth, when money is short, we should ruthlessly prioritise those areas of public spending that are the most likely to support economic growth, including investments in our transport and green energy infrastructure, our science base and the skills and education of our citizens.
Let me explain now how those principles have guided our specific decisions. First, on reform, I believe that the public sector needs to change to support the aspirations and expectations of today’s population, rather than the aspirations and expectations of the 1950s, so the spending review is underpinned by a far-reaching programme of public service reform. We saw over the last decade that more money without reform was a recipe for failure; less money without reform would be worse, and we are not prepared to accept that, so we have begun by squeezing every last penny that we can find out of waste and administration costs.
Our ambition in this review was to find £3 billion of savings from the administrative budgets of central Government Departments. With the help of the Green review and the work done by my right hon. Friend the Minister for the Cabinet Office and Paymaster General, I can tell the House that we have gone further than we thought possible in cutting back-office costs. Quangos will be abolished; services will be integrated; assets will be sold; and the administrative budget of every main Government Department will be cut by a third. The result is this: we promised £3 billion of Whitehall savings; we will deliver £6 billion.
Of course, there is a very understandable concern about the reduction in the total public sector head count that will result from the measures in the spending review. We believe that the best estimate remains the one set out by the independent Office for Budget Responsibility. It has forecast a reduction in the head count of 490,000 over the spending review period. Now let us be clear: that is over four years, not overnight, and much of it will be achieved through natural turnover, by leaving posts unfilled as they become vacant. Estimates suggest a turnover rate of over 8% in the public sector; but, yes, there will be some redundancies, and that is up to the decisions of individual employers in the public sector. That is unavoidable when the country has run out of money.
We feel responsible for every individual who works for the Government, and we will always do everything that we can to help them to find alternative work. In fact, in the last three months alone, this economy created 178,000 jobs. So we should remember that, unless we deal with this record budget deficit decisively, many more jobs will be in danger in both the private and the public sector.
The Cabinet Office and the Treasury will oversee the programme of Whitehall savings. Both Departments will lead by example. The core Cabinet Office budget will be reduced by £55 million by 2014-15. Additional allocations will be provided to fund electoral reform, support the big society projects, establish community organisers and launch the pilots for the national citizen service, which will give young people for the first time a right of passage to citizenship. In recognition of the challenges faced by the voluntary and community sector, I am establishing a one-year £100 million transition fund to help those facing real hardship. The Treasury will see its overall budget reduce by 33%, and we will share the Department’s enormously expensive private finance initiative building, which my predecessor but one signed up to, by moving part of the Cabinet Office into the same premises.
The Chancellor is also a royal trustee, and I want to say something briefly about the civil list. As I outlined in the Budget, the 10-year settlement expired this year, and no provision for a new settlement had been made when we entered office.
Her Majesty has graciously agreed to a one-year cash freeze in the civil list for next year. Going forward, she has also agreed that total royal household spending will fall by 14% in 2012-13, while grants to the household will be frozen in cash terms. In order to support the costs of the historic diamond jubilee, which the whole country is looking forward to celebrating, there will be a temporary additional facility of £1 million. After that, the royal household will receive a new sovereign support grant linked to a portion of the revenue of the Crown estate, so that my successors do not have to return to this issue as I often as I have had to.
Central to this review—[Interruption.]
Mr Speaker
Order. All this noise makes progress slower and saps time that would otherwise be available for Back Benchers to question the Chancellor. Apart from anything else, it is unfair and discourteous.
Mr Osborne
Central to this review is the reshaping of our public services. First, there needs to be a dramatic shift in the balance of power from the centre to the locality. A policy of rising burdens, regulations, targets, assessments and guidance has undermined local democracy and stifled innovation. We will completely reverse that. We will give GPs powers to buy local services, schools the freedom to reward good teachers, and communities the right to elect their police and crime commissioners.
Secondly, we should understand that all services paid for by the Government do not have to be delivered by the Government, so we will expand the use of personal budgets for special education needs, children with disabilities and long-term health conditions. We will use new payment mechanisms for prisons, probation and community health services, and we will encourage new providers in adult social care, early years and road management.
For local government, the deficit that we have inherited means an unavoidably challenging settlement. There will be overall savings of funding to councils of 7.1% a year for four years, but to help councils we propose a massive devolution of financial control. Today I confirm that the ring-fencing of all local government revenue grants will end from April next year. The only exception will be simplified schools grants and a public health grant. Outside of schools, police and the fire service, the number of separate core grants that go to local authorities will be reduced from over 90 to fewer than 10. Councils and their leaders will remain accountable, but they will no longer have to report on 4,700 local area agreement targets.
The local government settlement includes funding for next year’s council tax freeze to help families when their budgets are tight. We are also introducing tax increment finance powers, allowing councils to fund key projects by borrowing against future increases in locally collected business rates.
Some in local government have concerns about the financing of social care. I can announce that grant funding for social care will be increased by an additional £1 billion by the fourth year of the spending review, and a further £1 billion for social care will be provided through the NHS to support joint working with councils, so that elderly people do not continue to fall between the cracks of two different systems. That is a total of £2 billion of additional funding for social care to protect the most vulnerable.
We will also reform our social housing system, for it is currently failing to address the needs of the country. Over 10 years, more than 500,000 social rented properties were lost. Waiting lists have shot up, families have been unable to move, and, although a generation ago only one in 10 families in social housing had no one working, this had risen to one in three by 2008-09.
We will ensure that in future social housing is more flexible. The terms for existing social tenants and their rent levels will remain unchanged. New tenants will be offered intermediate rents at about 80% of the market rent. Alongside £4.4 billion of capital resources, this will enable us to build up to 150,000 new affordable homes over the next four years. We will continue to improve the existing housing stock through the decent homes programme, and we will reform the planning system so that we put local people in charge, reduce the burdens on house builders and encourage more homes to be built, with a new homes bonus.
Within an overall resource budget for the Department for Communities and Local Government which is being reduced to £1.1 billion over the period, priority will be given to protecting the disabled facilities grant. This will go alongside a £6 billion commitment over the four years to the supporting people programme, which provides help with housing costs for thousands of the most vulnerable people in our communities. In recognition of the important service provided by the fire and rescue service, we have decided to limit its budget reductions in return for substantial operational reform.
Let me turn now to reforms in our security and defence. Yesterday, my right hon. Friend the Prime Minister set out the conclusions of the strategic and defence review. He explained in detail how we will protect the British people, deliver on our international obligations and secure British influence around the world. This spending review provides the resources to do just that. The budget for the Ministry of Defence will reach £33.5 billion in 2014-15, a saving of 8% over the period. On top of this settlement, we will continue to provide out of the reserve the resources that our forces in Afghanistan require. As the Chancellor, I believe strongly that if we ask our brave servicemen and women to risk their lives on our behalf in active combat, then we will give them all the tools they need to finish the job.
Our international influence and commitment to the world are not determined only by our military capabilities; our diplomacy and development policy matter too. Savings of 24% in the Foreign and Commonwealth Office budget will be achieved over the review period by a sharp reduction in the number of Whitehall-based diplomats and back-office functions. There will be a focus on helping British companies win exports and secure jobs at home, and with the help of UKTI we will attract significant overseas investment to our shores.
I can also confirm that this coalition Government will be the first British Government in history, and we will be the first major country in the world, to honour the United Nations commitment on international aid. The Department for International Development’s budget will rise to £11.5 billion over the next four years. Overseas development will reach 0.7% of national income in 2013; this will halve the number of deaths caused by malaria and save the lives of 50,000 women in pregnancy and of 250,000 newborn babies.
Whether working behind the counter of a charity shop, volunteering abroad or contributing taxes to our aid budget, Britons can hold their heads up high and say, “Even in these difficult times, we will honour the promise that we made to some of the poorest people in our world.”
Our aid budget allows Britain to lead in the world. It may be protected from cuts, but it is not from scrutiny. I have agreed with my right hon. Friend the International Development Secretary a plan of reform that reduces administration costs to half the global donor average, ends the aid programmes that we inherited in China and Russia, focuses on conflict resolution and creates an independent commission to assess the impact of the money that we commit.
Let me now turn to security at home. Protecting the citizen is a primary duty of the Government. Our police put themselves in harm’s way to make the rest of us safe, and we owe them our gratitude. But no public service can be immune from reform. Her Majesty’s inspectorate of constabulary found in his recent report that significant savings could be made to police budgets without affecting the quality of front-line policing. Tom Winsor is leading a review of terms and conditions that will report on how the police service can manage its resources to serve the public even more cost-effectively.
Using independent forecasts for the precept, the settlement that I am proposing today will see police spending falling by 4% each year. By cutting costs and scrapping bureaucracy, we are saving hundreds of thousands of police man hours. Our aim is to avoid any reduction in the visibility and availability of police in our streets. Our new national security strategy judges terrorism to be one of the highest risks facing this country. Therefore I am prioritising counter-terrorism over the review period, both in the Home Office budget and the single intelligence account. We have been assured that this will maintain our operational capabilities against both al-Qaeda and its affiliates and against Northern Irish terrorist threats. This will enable us to meet the terrorist threat and to protect the Olympic games in 2012.
Overall, the Home Office budget will find savings of an average of 6% a year. The Ministry of Justice’s budget will reach £7 billion by the end of the four-year period, with an average saving of 6% a year. A Green Paper will set out proposals to reform sentencing, intervene earlier to give treatment to mentally ill offenders and use voluntary and private providers to reduce reoffending. Some £1.3 billion of capital will also be provided over the period to maintain the existing prison estate and fund essential new-build projects, but plans for a new 1,500-place prison will be deferred.
The Law Officers’ Department will reduce its budget by a total of 24% over the period, with the Crown Prosecution Service greatly reducing its inflated cost base. Reforms will also be required to streamline the criminal justice system, close underused courts and reduce the legal aid bill. We do need fair access to justice but provided at a fair cost for the taxpayer.
All the reform that I have spoken of—to Whitehall and the way services are provided, to local government and to our defence, security and justice system—will improve both value for money for taxpayers and the service provided to the public. Next month, each Government Department will publish a business plan setting out its reform plans for the next four years, so that their priorities are clear and the public can hold them to account.
Reform is one of the guiding principles of this spending review—and so, too, is fairness. Let us be clear: there is nothing fair about running huge budget deficits and burdening future generations with the debts that we ourselves are not prepared to pay. How ironic that it was the last Labour Prime Minister himself who once observed that
“Public finances must be sustainable over the long term. If they are not then it is the poor…that will suffer most.”—[Official Report, 2 July 1997; Vol. 297, c. 304.]—
not that he is here in the Chamber today. That is why we are restoring order to our public finances before that is allowed to happen.
A fair Government deal with the deficit decisively, and that is what we are going to do. A fair Government make sure that those with the broadest shoulders bear the greatest burden. The distributional analysis published today shows that those on the highest incomes will contribute more towards this entire fiscal consolidation, not just in cash terms but also as a proportion of their income and consumption of public services combined.
I completely understand the public’s anger that the banks, which were so appallingly regulated over the last decade, and whose near-collapse wrought such damage to our economy, should now be contemplating paying high bonuses. We are overhauling the system of regulation that we inherited, so that the Bank of England, with its clout and reputation, is put in charge. We have set up the Independent Commission on Banking to look at the structure of the industry, and next year we will receive its report.
Today we set out very clearly, for all to take note of, our objective in taxing the banking industry going forward. We neither want to let banks off making their fair contribution, nor do we want to drive them abroad. Many hundreds of thousands of jobs across the whole United Kingdom depend on Britain being a competitive place for financial services.
Our aim will be to extract the maximum sustainable tax revenues from financial services. We will assess what those maximum revenues could be—not just in one year, but over a period of years. We have already decided, in the face of opposition from the previous Government, to introduce a permanent levy on banks. The legislation will be published tomorrow. Once fully effective, the permanent levy will raise more net each year and every year for the Exchequer than the one-year bonus tax did last year. I note that the previous Chancellor now admits that that failed to curb behaviour and was not sustainable.
However, that is not enough. We want the banks to pay not just by the letter of the tax law, but by its spirit. A year ago, the previous Government announced in a fanfare that they would require banks to sign up to the code of practice on taxation. I have asked the Revenue how many of our leading 15 banks actually signed up. The answer is four—four out of 15. That is what happened when they were in office—all talk and no action.
I have instructed the Revenue to work with the banking sector to ensure that the remaining banks have implemented the code of practice by the end of next month. We will also address the situation under the last Government where the gap between the taxes owed and the taxes paid grew considerably. So in this spending review, while the HMRC budget will be expected to find resource savings of 15% through the better use of new technology, greater efficiency and better IT contracts, we will be spending £900 million more on targeting tax evasion and fraud. This additional £900 million is expected to help us collect a missing £7 billion in tax revenues. Nor will fraud in the welfare system be tolerated any more. We estimate that £5 billion a year is being lost in this way—£5 billion that others have to work long hours to pay in their taxes. This week we published our plans to step up the fight to catch benefit cheats and deploy uncompromising penalties when they are caught.
That brings me to the wider welfare budget. A civilised country provides for families, protects the most vulnerable, helps those who look for work, and supports those in retirement. That is why one of the first acts of this coalition Government was to re-link the basic state pension to earnings and guarantee a rise each year by earnings, inflation or 2.5%. Never again will those who worked hard all their lives be insulted with a state pension increase of just 75p. But this guarantee of a decent income in retirement has to be paid for at a time when people are living much longer than anyone predicted. We should celebrate that fact, but also confront it. Lord Turner’s report on pensions, commissioned by the last Government, acknowledged that a more generous state pension had to be funded by an increase in the pension age. Even since its publication, life expectancy has risen further than it predicted.
Before the summer, we launched a review on increasing the state pension age, and that review has now concluded. As a result, I can announce today that the state pension age for men and women will reach 66 by 2020. This will involve a gradual increase in the state pension age from 65 to 66, starting in 2018, and it will mean an acceleration of the increase in the female pension age already under way since this April. From 2016, the rate of increase will be three months in every four rather than the current plan of one month in every two. Raising the state pension age is what many, many countries are now doing, and will by the end of the next Parliament save over £5 billion a year—money that will be used to provide a more generous basic state pension as we manage demographic pressures.
Earlier this month, we also received the interim report from John Hutton’s public service pensions commission. I am sure that the whole House will want to thank John Hutton for his excellent and independent piece of work. I welcome his findings. I hope that it will form the basis of a new deal that balances the legitimate expectations of hard-working public servants for a decent income in retirement with the equally legitimate demands of hard-working taxpayers that they do not pay unfairly for it.
I think that the elements of this new pension deal are clear. We should accept that public service pensions continue to provide a form of defined benefit and that there is no race to the bottom of pension provision. We want public service pensions to be a gold standard. At the same time, we should accept that they must be affordable. When these public service pension schemes were established in the 1950s, taxpayers made half the contributions; today, they make up two thirds of the contributions, and the unfunded bill is set to rise to £33 billion by 2015-16.
We should accept, as John Hutton does, that there has to be an increase in employee contributions, although I also agree with him that this should be staggered and progressive. That means that the lower-paid—and those in the armed forces—are protected, and the highest-paid public servants, who get the largest benefits, pay the highest contributions. We will await the full commission report next spring before coming to any conclusions on the exact nature of the defined benefit and the progressive contribution rise. We will also launch a consultation on the fair deal policy, as he recommends, but we will now carry out, as the interim report suggests, a full public consultation on the appropriate discount rate used to set contributions to these pensions. From the perspective of filling the hole in the public finances, we will seek changes that deliver an additional £1.8 billion of savings per year in the cost of public service pensions by 2014-15, over and above the plans left to us by the last Government.
It is also clear that the current final salary pension terms for MPs are not sustainable, and we anticipate that the current scheme will have to end. We will make a further statement following the publication of Lord Hutton’s findings.
The welfare system is also there to help people of working age when they lose their job, have a disability, start a family and need help with low pay. But the truth, as everyone knows, is that the welfare system is failing many millions of our fellow citizens. People find themselves trapped in an incomprehensible out-of-work benefit system for their entire lifetime because it simply does not pay to work. This robs them of their aspirations and opportunities, and it costs the rest of the country a fortune. Welfare spending now accounts for one third of all public spending. Benefit bills soared by 45% under the previous Government. In some cases, the benefit bill of a single out-of-work family has amounted to the tax bills of 16 working families put together. This is totally unsustainable and unfair. The last Government promised reform and flunked it: we will deliver.
My right hon. Friend the Work and Pensions Secretary is setting out proposals, with my support, to replace all working-age benefits and tax credits with a single, simple universal credit. The guiding rule will be this: it will always pay to work. Those who get work will be better off than those who do not. This represents the greatest reform to our welfare state for a generation. It will be introduced over the next two Parliaments at a pace that ensures that we get this right. I have set aside over this spending review more than £2 billion of resources to make this happen, and it will go alongside our new Work programme, which we are also funding today. Drawing on the skills of the voluntary sector and private providers, the Work programme will provide intensive help for those looking for work and support for those who could look for work but currently lack the confidence or the skills to try.
The Department for Work and Pensions will make savings to help to deliver these schemes by increasing the use of digital applications and reducing overheads. But we will also be seeking substantial savings from the rest of the £200 billion benefit bill, on top of those already identified in the Budget. As I said in June, the more we could save on welfare costs, the more we could continue other, more productive areas of Government spending. And in the massive public consultation we conducted over the summer, the overwhelming message we received was that the British people think it is fair to reform and reduce welfare bills in order to protect important public services.
So today I announce these further welfare savings. We will time limit contributory employment and support allowance for those in the work-related activity group to one year. This is double the length of time that applies to contributory jobseeker’s allowance. We will increase the age threshold for the shared-room rate in housing benefit from 25 to 35, so that housing benefit rules reflect the housing expectations of people of a similar age not on benefits. We will give local authorities greater flexibility to manage council tax, together with direct control over council tax benefit, within an overall budget that will be reduced by 10% from April 2013.
We will align the rules for the mobility and care elements of disability living allowance paid to people in residential care, generating savings but enabling us to continue with this important benefit. We will freeze the maximum savings credit award in pension credit for four years, thereby limiting the spread of means-testing up the income distribution.
We will further control the cost of tax credits by freezing the basic and 30-hour elements for three years; we will change the working tax credit eligibility rules so that couples with children must work 24 hours per week between them; and we will return the child care element of the working tax credit to its previous 70% level. We will also introduce a new cap on benefits. No family that does not work will receive more in benefits than the average family that does go out to work. That is tough, but fair. Of course, those in receipt of disability living allowance, working tax credit or the war widow’s pension will be excluded.
Taken together, all these welfare measures I have outlined will save the country £7 billion a year. But we want to ensure that low-income families with children are protected from the adverse effects of these essential savings—because this Government are committed to ending child poverty. I can announce today that I am increasing the child element of the child tax credit by a further £30 in 2011-12 and £50 in 2012-13 above indexation. This will mean annual increases of £180 and then £110 above the level promised by the last Government, and it will provide support to 4 million lower-income families. And I can confirm that using the same model we inherited, the spending review will have no measurable impact on child poverty over the next two years, while we await the conclusions of the report by the right hon. Member for Birkenhead (Mr Field).
Let me now turn to the universal benefits. I have taken the difficult decision to remove child benefit from families with a higher rate taxpayer. I wish it were otherwise, but I simply cannot ask those watching this earning just £15,000 or £30,000 a year to go on paying the child benefit of those earning £50,000 or £100,000 a year. The debts of the last Labour Government, and the need to ensure that the better-off in society also make a fair contribution, make this choice unavoidable. It also means that no further changes to child benefit are required. Child benefit will continue to be paid in the normal way to the great majority of the population from birth until a child leaves full-time education at the age of 18 or even 19. We can afford to do that because, according to the latest independent estimates we have received from the Office for Budget Responsibility, removing child benefit from higher rate taxpayers will actually save Britain £2.5 billion a year.
We will also keep the universal benefits for pensioners, in recognition of the fact that many have worked hard and saved hard all their lives. Free eye tests, free prescription charges, free bus passes, free TV licences for the over-75s and winter fuel payments will remain exactly as budgeted for by the previous Government, as promised. I am also turning the temporary increase in the cold weather payments introduced by the last Government into a permanent increase. In my view, higher cold weather payments should be for life, not just for general elections.
So, too, are the promises that we make on the national health service. The NHS is an intrinsic part of the fabric of our country. It is the embodiment of a fair society. This coalition Government made a commitment to protect the NHS and increase health spending every year. Today we honour that commitment in full. Total health spending will rise each year over and above inflation. This year we are spending £104 billion on health care, capital and current combined. By the end of four years we will be spending £114 billion. We can afford that, in part because of the decisions on welfare that I have just announced, and also because we have made tough decisions in other parts of the Government budget. But to govern is to choose, and we have chosen the national health service.
That does not mean that we are letting the Department of Health off the need to drive real reform and savings from waste and inefficiency. Productivity in the health service fell steadily over the past 10 years, and that must not continue. By 2014 we are aiming to save up to £20 billion a year by demanding better value for money—but the money we save will be reinvested in our nation’s health care.
As the independent forecasts we published in the Budget show, we need to make those savings to deal with our ageing population and the rising costs of new medical treatments, but there are also new services we can offer. A new cancer drug fund will be provided, spending on health research will be protected, and we will prioritise work on the treatment of dementia. We will expand access to psychological therapies for the young, the elderly and those with mental illness. We will fund new hospital schemes, including the St Helier, the Royal Oldham and the West Cumberland.
For health spending, as for other spending announcements, there will be consequential allocations for Scotland, Wales and Northern Ireland. The Barnett formula will be applied in the usual way, which means that the increase in health spending and the relative protection of education spending will feed through to the devolved resource budget. It means that all three nations will actually see cash rises in their budget, although rises below the rate of inflation. For Scotland the resource budget will rise to £25.4 billion in 2014-15. For Wales it will rise to £13.5 billion, and for Northern Ireland to £9.5 billion. In Scotland we are proceeding with the implementation of the Calman reforms. In Wales we will consider with the Assembly Government the proposals in the final Holtham report, consistent with the Calman work being undertaken in Scotland.
In Northern Ireland, the collapse of the Presbyterian Mutual Society has caused great hardship, and people have been left without their money for far too long. I confirm today that we will provide the Northern Ireland Executive with £25 million in cash and a £175 million loan to help those who have lost their life savings.
We will also help those across the United Kingdom who have lost money as a result of the collapse of Equitable Life. For 10 years the Equitable Life policyholders have fought for justice. For 10 years the last Government dithered, delayed and denied them that justice. It is time to right the wrong done to many thousands of people who did the right thing, saved for their future and tried not to depend on the state, and then were the innocent victims of a terrible failure of regulation.
So let me make it clear: I accept the findings of the parliamentary ombudsman in full. I have read the advice of Sir John Chadwick and I thank him for it, but I do not agree with the level of compensation that his analysis suggested. I agree with the ombudsman that the relative loss suffered is the difference between what policyholders actually received from their policies and what they would have received elsewhere. The parliamentary ombudsman herself recognised that a balance had to be struck between being fair to policyholders and being fair to taxpayers, particularly when many budgets and benefits are being cut. But money that we pay out has to come from general public expenditure. I have decided that the fair amount to pay out in total is in the region of £1.5 billion, two thirds of which will be found in this spending review period. Those who had with-profits annuities were particularly hard hit, as they were retired and were unable to move their savings elsewhere. As a result, the Government will cover the cost of the total relative loss suffered by those deserving people. The scheme will start making payments next year.
Those measures, and our welfare reforms, mean that it will always pay to work; the benefits savings will help us protect key public services such as the national health service; and there is help for those who have saved and lost everything. These are fair decisions, consistent with the second principle of this spending review.
The third and final principle centres on growth and promoting a private sector recovery. By restoring macro-economic stability we have brought certainty to business, and by cutting business taxes we are giving businesses the freedom to compete. Today’s review builds on those steps, because even when money is short we should prioritise the areas of public spending that are most likely to support economic growth. That is what we are doing with the Department for Business, Innovation and Skills. Administration will be cut by £400 million, 24 quangos will go, lower-priority programmes such as Train to Gain will be abolished, and adult learners and employers will to have contribute more to further education. But that means that today I can announce the largest ever financial investment in adult apprenticeships—an increase of more than 50% on the previous Government’s provision, helping 75,000 new apprentices a year by the end of this spending review period.
We will maintain and invest in the post office network and protect community post offices. We will come forward with our detailed response to Lord Browne’s report on higher education funding and student finance, including our plans to provide financial support to encourage those from the poorest households to stay in education. Our universities are the jewels in our economic crown, and it is clear that if we want to keep our place near the top of the world league tables, we need to reform our system of funding and reject—as, to be fair, many Opposition Members do—the unworkable idea of a pure graduate tax. Clearly, better-off graduates will have to pay more, which will enable us to reduce considerably the contribution that general taxpayers have to make to the education of those who will probably end up earning much more than them.
Overall, annual savings of 7.1% will be found from the budget of the Department for Business, Innovation and Skills—the minimum it was asked to find. Within those savings, however, the Secretary of State and I have decided to protect the science budget. Britain is a world leader in scientific research, and that is vital to our future economic success. That is why I am proposing that we do not cut the cash going to the science budget. It will be protected at £4.6 billion a year. Building on the Wakeham review of science spending, we have found that within the science budget, significant savings of £324 million can be found through efficiency. If they are implemented, with this relatively protected settlement I am confident that our country’s scientific output can increase over the next four years.
We will also invest £220 million in the UK Centre for Medical Research and Innovation at St Pancras, and fund the molecular biology lab in Cambridge, the Institute for Animal Health in Pirbright and the diamond synchrotron in Oxford.
Research and technological innovation will help us with one of the greatest scientific challenges of our times—climate change—and support new jobs in low- carbon industries. So today, even in these straitened times, we commit public capital funding of up to £1 billion to one of the world’s first commercial-scale carbon capture and storage demonstration projects. We will also invest more than £200 million in developing offshore wind technology at port sites.
Yesterday protesters scaled the Treasury, urging us to proceed with their idea for a green investment bank. That is the first time anyone has protested in favour of a bank—but we will go ahead. I have set aside in the spending review £1 billion of funding for that bank, but I hope that much more will be raised from the private sector and the proceeds of future Government asset sales.
The aim of all those investments is for Britain to be a leader of the new green economy, creating jobs, saving energy costs and reducing carbon emissions. We will also introduce incentives to help families reduce their bills. We will introduce a funded renewable heat incentive, and our green deal will encourage home energy efficiency at no up-front cost to homeowners, allowing us to phase out the Warm Front programme.
Overall, the total resource settlement for the Department of Energy and Climate Change will fall by an average 5% a year, but there will be a large increase in capital spending, partly to meet the unavoidable commitments that we have been left on nuclear decommissioning.
The Department for Environment, Food and Rural Affairs will deliver resource savings of an average 8% a year, but we will fund a major improvement in our flood defences and coastal erosion management that will provide better protection for 145,000 homes.
Britain’s arts, heritage and sport all have enormous value in their own right, but our rich and varied cultural life is also one of our country’s greatest economic assets. The resource budget for the Department for Culture, Media and Sport will come down to £1.1 billion by 2014-15. Administrative costs are being reduced by 41% and 19 quangos will be abolished or reformed. All that is being done so that we can limit four-year reductions to 15% in core programmes such as our national museums, the front-line funding provided to our arts and Sport England’s whole sport plans. We will complete the new world-class building extensions for the Tate Gallery and the British Museum. The Secretary of State will provide details of further projects shortly. I can also announce today that, in order for our nation’s culture and heritage to remain available to all, we will continue to fund free entry to museums and galleries. There is also ongoing provision of the £9.3 billion of public funding for a safe and successful Olympic and Paralympic games in London in 2012.
We have approached the BBC to ensure that it, too, makes its contribution, as a publicly funded organisation, to savings during the spending review. I am pleased to confirm that this week we have struck a deal. The BBC will take from the Government the responsibility for funding the BBC World Service and BBC Monitor, as well as part-funding S4C. That amounts to some £340 million of savings a year for the Exchequer by 2014-15.
To ensure that the cost of those new obligations is not passed on to the licence fee payer, the BBC has agreed a funding deal for the full duration of its charter review. The licence fee will be frozen for the next six years. That deal helps almost every family, and is equivalent to a 16% saving in the BBC budget over the period, similar to the savings in other major cultural institutions.
The BBC has also agreed to reduce its online spend and make no further encroachments into local media markets in order to protect local newspapers and independent local radio and TV. It will contribute to the £530 million that we will spend over the next four years in bringing superfast broadband to rural parts of our country that the private sector will take longer to reach. Pilots will go ahead in the Highlands and Islands, North Yorkshire, Cumbria and Herefordshire. All that will help encourage the growth of our creative industries as a key part of the new economy that we are seeking to build.
After our defence requirements are met, the Department for Transport will receive the largest capital settlement. Over the next four years we will invest more than £30 billion in transport projects—more than was invested during the past four years. Of that, £14 billion will fund maintenance and investment in our railways. Direct bus subsidies will be reduced, but statutory concessionary fares will remain.
The cap on regulated rail fares will rise to RPI plus 3% for the three years from 2012, but that will help this country afford new rolling stock as well as improve passenger conditions. The Secretary of State will set out how more of the transport money will be allocated next week.
However, I want to tell the House today about some of the projects that will go ahead. For let us remember that, even after the tough spending settlements, the country will still be spending more than £700 billion a year. In Yorkshire and Humber, capacity on the M62 will be expanded, £90 million will be spent on improving rail platforms across various towns and cities, and we will also improve line speeds across the Pennines. In the north-east £500 million will be spent on refurbishing the Tyne and Wear metro and the Tees valley bus network. In the north-west we will invest in rail electrification between Manchester, Liverpool, Preston and Blackpool, and we will provide funding for a new suspension bridge over the Mersey at Runcorn.
Rail and roads in Scotland are devolved to the Scottish Executive, and roads in Wales are also devolved, but I can tell the House that major rail investments around Cardiff, Barry and Newport will go ahead.
In the east midlands the M1 and the A46 will be improved. In the west midlands we will extend the Midland metro and completely redevelop Birmingham New Street station. In the south-west we will fund improvements on the M5 and the M4, and the new transport scheme for Weymouth. In the east of England, colleagues will be delighted to know, the A11 to Norwich will be upgraded. Around London, we will widen the M25 between 10 different junctions and complete improvements to the A3 at Hindhead.
In London, on top of the Olympics, a major investment in our capital city’s transport infrastructure will take place. Crossrail will go ahead and key tube lines will be upgraded for the 21st century.
That is nothing like the complete list, because next week, we will set out more details. So, yes, we are saving money and putting the state on a more sustainable footing, but even then, we will spend tens of billions of pounds on Britain’s future infrastructure. Next week the Secretary of State will also set out our national infrastructure plan, so that private money is put to work in building for this country the economic infrastructure that our businesses need. Our regional growth fund will also help us do that. As promised, £1 billion has been found for the fund over the next two years—money designed to lever in private investment in areas of our country where it has been too absent over the past decade. I can announce today that I am providing close to half a billion pounds extra in the third year for the regional growth fund.
Long-term investment in the capacity of our transport, our science and our green energy will all help move Britain from its decade-long dependence on one sector of the economy in one part of the country, and the ruin to which that has led.
The most important ingredient of a 21st-century economy is well-educated children, who believe in themselves and aspire to a better life, whatever their background or disadvantages. In June, after the Budget, when the Chief Secretary to the Treasury and I turned our attention to how to allocate spending between Departments, we set ourselves a goal. We wanted to see if it was possible, even when spending was being cut, to find more resources for our schools and for the early years education of our children. I can tell the House that we have succeeded. It has meant other Departments taking bigger cuts, but I believe strongly that that is the right choice for our country’s future.
There will be a real increase in the money for schools, not just next year or the year after, as the previous Government once promised, but for each of the next four years. The schools budget will rise from £35 billion to £39 billion. Even as pupil numbers greatly increase, we will ensure that the cash funding per pupil does not fall. We will also sweep away all the different ways in which money is ring-fenced so that schools can decide how to spend their money as they think best.
We will also introduce a new £2.5 billion pupil premium, which supports the education of disadvantaged children and will provide a real incentive for good schools to take pupils from poorer backgrounds. That pupil premium is at the heart of the coalition agreement, and at the heart of our commitment to reform, fairness and economic growth.
Parents, teachers and community groups will be supported if they wish to establish free schools. We will fund an increase in places for 16 to 19-year-olds, and raise the participation age to 18 by the end of the Parliament. That enables us to replace education maintenance allowances with more targeted support.
We will also provide support for the early years of our children. The increased entitlement to 15 hours a week free education for all three and four-year-olds that was introduced under this Government will continue. Sure Start services will be protected in cash terms and the programme will be focused on its original purpose. We will help them further by introducing for the very first time 15 free hours of early education and care for all disadvantaged two-year-olds, so that those children have a chance in life and are ready like the rest of their classmates for school.
Overall, the Department for Education will be required to find resource savings of only 1% a year. Central administration will be cut by a third and five quangos will go. The capital budget will, as we know, have to bear its share of the reductions, but as the House knows, we have had to phase out the hopelessly inefficient and over-committed Building Schools for the Future programme. However, £15.8 billion will be spent to maintain the school estate and to rebuild and refurbish 600 schools. I repeat: the resource money for schools—the money that goes into the classroom—on the broadest definition, including all the main grants, will go up in real terms every year. That is a real investment in the future of our children and in the future growth of our economy too.
Let me conclude. The decisions we have taken today bring sanity to our public finances and stability to our economy. We have dealt decisively with the largest budget deficit this House of Commons has ever had to face outside of wartime. We have had to make choices—choices about the things we support—and today I have announced real increases in the NHS budget and the resources of schools, as well as new investment in the infrastructure of our economy. I have announced real reductions in waste and reforms to welfare and although that will reshape public services to meet the challenges of this time, I think it is the right choice.
I have one final observation. During the process of this spending review, I have received many submissions, including one from the Labour party. It said that the average cut for unprotected Departments should be set at 20% over the coming four years, rather than the 25% that I anticipated in my June Budget. I have examined that proposal carefully and consulted the published documents of my predecessor, the right hon. Member for Edinburgh South West (Mr Darling), and because of our tough but fair decisions to reform welfare and the savings that we have made on debt interest, I am pleased to tell the House that that has been possible. The average savings in departmental budgets will be lower than the previous Government implied in their March Budget. Instead of cuts of 20%, there will be cuts of 19% over the four years, so I thank the Opposition for their support and input and look forward to their votes.
This coalition Government faced the worst economic inheritance in modern history. The debts we were left with threatened every job and public service in the country, but we have put the national interest first. We have made the tough choices. We have protected health and schools and investment in growth, and we have reformed welfare and cut waste. We have made sure that we are all in this together, and we have taken our country back from the brink of bankruptcy. A stronger Britain starts here, and I commend this statement to the House. [Interruption.]
Alan Johnson (Kingston upon Hull West and Hessle) (Lab)
Mr Speaker—[Interruption.]
Mr Speaker
Order. The House needs to calm down. It is getting a little over-excited and there is a long way to go.
Alan Johnson
Mr Speaker, we remember well the cheers at the end of the emergency Budget in June, when the Chancellor finished on a peroration about his Budget being progressive and fair. It took the Institute for Fiscal Studies only 48 hours to show that it was totally unfair, and that the burden of the emergency Budget fell two and half times more on the poorest than on the richest. We have seen today hon. Members cheering the deepest cuts to public spending in living memory. For some Government Members, that is their ideological objective—[Interruption.] Not all of them, but for many, that is what they came into politics for—[Interruption.]
Mr Speaker
Order. Ms Bray, you are getting quite over-excited. You must calm yourself—and remain calm. It is in your interest and the House’s interest.
Alan Johnson
Today is the day that abstract figures and spreadsheets turn into people’s futures, people’s jobs, people’s pensions, people’s services and their prospects for the future, and the day when the statistics that were nestling comfortably in the lap of the Chief Secretary yesterday actually become the uncomfortable truth for many people and families throughout this country.
We hear the chant on every occasion, but Government Members are deficit deceivers. They have peddled a whole series of myths to the British public. The most incredible myth of all is that the biggest global economic crisis since the great depression is the fault of the previous Government—[Interruption.] You see? The strings are pulled and away they go.
The Chancellor said that the Government have brought Britain back from the brink of bankruptcy. Perhaps he will confirm three facts. Fact No. 1: when the global crisis hit, the UK had the second-lowest debt of any G7 country. Fact No. 2: the previous Government inherited a debt interest level of 10p in every £1 of tax received, and even after a world recession, we bequeathed a figure that was 15% lower. Fact No. 3: the interest rates that the UK pays on its debt have been falling since the beginning of the year. Perhaps the Chancellor, in the interests of accuracy, can confirm those statistics.
When the last comprehensive spending review took place in 2007, the Chancellor was the shadow Chancellor. Was he calling for reduced public spending? Read the Hansard. Was he calling for regulation of the banking industry? I have two things to say about 2007. I have read his contribution to the debate. First, instead of arguing for reduced public spending, he argued that we were spending too little. He complained that we were slowing the growth in health and education expenditure. Indeed, the Conservative party supported every penny of our spending plans until well after the collapse of Lehman Brothers in America, which set off the disastrous chain reaction that caused the global recession.
In 2007, far from calling for regulation of the banks, the Conservatives were calling for deregulation of the banks. The right hon. Member for Wokingham (Mr Redwood) produced a report on behalf of the then Leader of the Opposition who had called for greater regulation of the banking industry. We need to get the facts right.
The Chancellor described his emergency Budget in June as being unavoidable and fair. We know that it was unfair, because the IFS produced the statistics with devastating and forensic accuracy a few hours later, and we also know that it was avoidable. The deficit has to be paid down—[Hon. Members: “Ah!”] Here they go again. The Chief Whip’s spreadsheet tells them when to stand up and what to say. Where is he? He does not need to move to have influence on his Back Benchers. So we do need to bring the deficit down.
Today’s reckless gamble with people’s livelihoods runs the risk of stifling the fragile recovery. The ridiculous analogy with credit card debts insults the intelligence of the British public. If countries around the world had not run up debts—that is what the fiscal deficit is, by the way—to sustain their economies, people would have lost not their credit cards, but lost their jobs, lost their houses and lost their savings. The Liberal Democrats know that, and they argued that when seeking the support of the electorate. The Deputy Prime Minister argued that, and then he discovered Greece. In the period between the ballot box closing and his ministerial car door opening, the Deputy Prime Minister discovered a different approach.
Like us, the Liberal Democrats—every single one of them—were elected to this House on a platform that said, in the context of reducing the deficit, that speed kills. The Chancellor repeats a long list of those who support his swift cuts; he mentions it all the time. Curiously, he failed to mention the other countries in the United Kingdom—Scotland, Wales and Northern Ireland—which do not support these measures. Perhaps that is why he calls himself a one-nation Tory. Here is another supportive quotation that he missed out, and he can take this down and use it in future briefings:
“The measures we have taken have been commended by international bodies such as the European Central Bank, the European Commission, the IMF and the OECD. They have also won the approval of the international markets.”
That was the Irish Minister of Finance last December, when he told the Irish Parliament that his austerity plan meant that they had turned the corner. Four months later, they slid back into recession.
The concerns of those watching this announcement today went beyond the misrepresentation of figures and the clever Punch and Judy stuff in which we all engage—including myself at times. They will be interested in whether they will stay in work, whether they will stay in their homes and whether they will stay safe on the streets. We are told that the expected job losses from this spending review—and the Chancellor confirmed it—will be some 490,000. PricewaterhouseCoopers reported last week that 1 million jobs were at stake because the impact on the private sector is just as severe. Is it not the case that at the same time as the Government are throwing people out of work, they are reducing the support to help people return to the workplace?
I applaud the ideas and the efforts of the Secretary of State for Work and Pensions to do what we were seeking to do and make work pay—[Interruption.] He often gives credit to what we did when we were in government. The fact is, however, that today’s proposals will make it harder for people to return to work because of the changes to working tax credit; because of the changes to support for working parents; and because of the huge increase in fares for those who have to travel to get the jobs. The Secretary of State has had his job made harder by today’s announcement.
On housing, the Chancellor has announced the retreat of central Government from any role in building new affordable homes. Can he tell the House how many jobs will be lost in the construction sector as a result of his decision to all but end capital funding for house building? Crime has fallen dramatically in the last 13 years. I heard what the Chancellor said about the report from Her Majesty’s inspectorate of constabulary, but the Home Office is not a protected Department. As it deals with counter-terrorism and policing, the public will be worried that they will lose more police on the streets.
Spending has to be reduced—[Interruption.] Yes, spending has to be reduced, but the front-line services on which people rely must be protected. We support moves to ring-fence the health budget—[Hon. Members: “Ah!”] The point about the health service is not that its budgets will be protected, it is the taking of £2 billion to £3 billion out of those budgets to pay for a top-down structural reorganisation that the Conservatives told the public in their manifesto would not happen. This is the top-down reorganisation to end all top-down reorganisations, and we are already seeing the loss of jobs in the NHS as a result.
On education, the Chancellor mentioned that the pupil premium would be funded. There are stories already about teachers and teaching assistants losing their jobs as a result of today’s announcement. We will have to look at the statistics carefully, including the small print, before we can see what is happening on education. The Chancellor said that they will keep a version of education maintenance allowance. That is good, because it has been the biggest single contributor to lifting the number of children from poorer homes who stay in education—and it was introduced by the Labour Government. He told us that it will be introduced in some form, but he did not say how. Nor did he say what effect the removal of ring fences will have on Sure Start, which is crucially important to ensuring that we have a more progressive society.
On the NHS, we believe that the real-terms increase will be more than swallowed by the cost of the reorganisation. It would be good if the Chancellor could confirm that the baseline for the NHS will exactly reflect its actual budget this year. It seems to us from the statistics that there may be some smoke and mirrors.
Without growth, the job of getting the deficit down becomes impossible. A rising dole queue means a bigger welfare bill and less tax coming in—a cost of at least half a billion pounds for every 100,000 people thrown out of work by the Government’s approach. To get the deficit down, the starting point must be jobs, jobs, jobs. That remains the core of the difference between us and the Government. We were told that the Ministry of Justice will see 14,000 jobs cut. Does the Chancellor agree with the Department’s assessment that the vast majority of those—11,000—will be from the front line? Can he confirm that £230 million of taxpayers’ funds have been earmarked for redundancy costs in that Department alone? What is the total scale of redundancies expected across the public sector? What will the total redundancy bill be? Thanks to the Chief Secretary’s gaffe yesterday, we know that the Treasury has provided the Chancellor with estimates: he should share them with the House. Can the Chancellor confirm that the poorest will still bear a greater burden than the richest, with the middle squeezed even further, and that women will shoulder three quarters of the cuts? Does he still claim that these measures are progressive and fair?
There is an alternative approach. The Chancellor finished by suggesting that their cuts were the same as ours—[Hon. Members: “Less.”] Less than ours? That is even more utter and complete nonsense, for two reasons. First, the Conservatives calculated the 20% figure by some very dodgy formulae that stretched the limit of credibility for the protected Departments. Secondly, the Chancellor has not caught up with the fact that we have listed a series of measures with which we agree—for instance, the increase in capital gains tax and the changes to welfare. The Chancellor has not caught up with the statements that we have made about the welfare bill. We will look at the further measures that the Chancellor has announced today, but if we take the statements that we have made into account, we came into this debate with departmental cuts half the level of those that the Government are proposing.
This spending review is not about economic necessity; it is about political choices. The Chancellor argues that Labour would have done nothing about the deficit; he goes on to say that his cuts are no worse than ours. He cannot have it both ways. He cannot be right in both arguments, although he does manage to be wrong on both counts. The difference between us is that the Government are removing almost twice as much from Department budgets, while we were looking for a much more gradual, much slower reduction, which would not stifle the very low levels of growth in our economy. It is our firm belief that the rush to cut the deficit endangers the recovery and reduces the prospects for employment in the short term and for prosperity in the longer term. We believe that we can and should sustain a more gradual reduction, securing growth. I do not believe that the Chancellor or the Prime Minister sufficiently understands the worries and concerns of families up and down this country. Those worries will have multiplied considerably as a result of the Chancellor’s statement today.
Mr Osborne
He’s a nice guy, but he’s in the wrong job. The truth is this: frankly, either member of the Balls family would have done a lot better than that, and they might even have asked me a question or two, but let me try to respond to what he said.
The right hon. Gentleman keeps talking about a plan B, but he has not even got a plan A. There was a complete denial of the fact that this country has the largest budget deficit in the G20. He made no acknowledgement of the fact that the credit rating agencies were looking at this country when he was in the Cabinet and no acknowledgement of the fact that our market interest rates were the same as Spain rather than others. Frankly, he spent half his statement defending the economic policy of the last Labour Prime Minister—who perhaps could have turned up to hear it—but that is totally irrelevant to the questions put before the House today and the proposals that we have set out.
The right hon. Gentleman kept saying, “We want to reduce the deficit.” As far as I could tell, he did not agree with a single measure that I set out. He did not propose a single saving. He is a deficit denier, and the truth is this. We have been told for a whole year that we would get Labour’s deficit reduction plan. Before the election, let us remember, we were told in the debates, “Don’t worry, it’ll come after the election.” During the leadership contest, we were told that it would come after the leadership contest. After the leadership contest, we were told that it would come before the spending review, and then this morning, a member of the shadow Cabinet said on the radio, “We are not going to do an alternative to the spending review.” I then got this message in the Chamber that said that at eight minutes past 1 this afternoon, when the shadow Chancellor was actually in the Chamber, he sent an e-mail to members of the public saying:
“I’m going to be honest with you, being in opposition does mean”
we have to set out “a clear alternative”, and he then said, “Please share your thoughts with us.” Labour Members were in government until six months ago. They sat round the Cabinet table as the deficit increased. Six months later, they have not put forward a single idea for reducing the budget deficit. It is absolutely pathetic.
Despite the fact that the right hon. Gentleman says that he is relatively new to the subject, he dismisses, with a sweep of the hand, the verdict of the IMF, the OECD, the CBI, the chambers of commerce, the European Commission and everyone else who has looked at the British economy. I do not know whether he saw the letter from 35 leading employers in this country, but they included people such as the leaders of Asda and Microsoft—I know that the business community of this country is totally irrelevant to Labour now—and the person who founded the Carphone Warehouse, who I think used to be a supporter of the Labour party. All those people wrote to the national newspapers saying:
“Addressing the debt problem in a decisive way will improve business and consumer confidence.”
If the right hon. Gentleman wants to ignore all those people, what about Tony Blair? There is total silence on the Labour Benches for the man who won Labour three general elections. I think that the right hon. Gentleman was in the Cabinet when Tony Blair was Prime Minister, and he has said:
“The danger now is this: if governments don’t tackle deficits, the bill is footed by taxpayers, who fear that big deficits now mean big taxes in the future, the prospect of which reduces confidence, investment and purchasing power. This then increases the risk of prolonged slump”.
The right hon. Gentleman used to be a Blairite—[Interruption.] Well, at least the right hon. Member for Morley and Outwood (Ed Balls) has been fighting Tony Blair all his career and says he is wrong, but the shadow Chancellor used to be a supporter.
The right hon. Gentleman has dismissed all the leading businesses of Britain, all the international organisations and Tony Blair, but let me answer a couple of his specific questions—[Interruption.] Well, to be fair, in the space of about 10 minutes he asked three, so I will answer them. First, he asked about police numbers. Of course this is a challenge for the Home Office, but we believe that with the advice from the inspectorate of constabulary and Tom Winsor’s report, there will be no reduction in the availability and visibility of policing. However, the right hon. Gentleman was asked during the election—[Interruption.] He was the Home Secretary. [Interruption.] The new Leader of the Opposition asks—[Interruption.] This is what the man who was Home Secretary before the election said in the election, when he was asked a question on the “Daily Politics” show:
“Can you guarantee if you form...the next government that police numbers won’t fall?
Johnson: No”.
So what is the basis on which he makes his argument?
The right hon. Gentleman talks about the national health service, and he said that he agreed with our decision to ring-fence it. Presumably this is the same shadow Chancellor who said recently, “There is no logic, sense or rationality to this policy.” He has done a complete U-turn.
The right hon. Gentleman says that he rejects the minus 20% definition of the Labour cuts. At the same time, he began his statement by praising the Institute for Fiscal Studies, but that number comes from the IFS. He suggests that I have not paid attention to the announcements that he has been making this week. Well, it is true that I have been quite busy, but I have paid attention to what he has said. I understand that not many people got a chance to question him about his policies, but he said that taxes needed to be increased. However, when he was asked which taxes, he said that he was open-minded about it. That is a polite way of saying he hasn’t got a clue.
The right hon. Gentleman was once the great force of modernisation in the Labour party, and he has now ended up reading out the policies dreamed up by the new Leader of the Opposition. He said in that press conference earlier this week that being in opposition was not about “pretending to be in government.” Now we know how right he was.
Mr Andrew Tyrie (Chichester) (Con)
This is undoubtedly one of the most radical and—I think most people in all parts of the House would agree—necessary shake-ups of the public sector, whatever the scale of shake-up people wanted. Personally, I particularly welcome the cull of quangos, the re-examination of the private finance initiative, the efficiency drive in Whitehall, and the announcements on Equitable Life and the BBC. The Select Committee on Treasury will be looking in far greater detail than in the past at the Treasury’s decisions, and particularly at the way that it has prioritised between Departments and at the ring-fencing. We will also examine them for fairness. The Chancellor’s analysis in the June Budget presented that Budget as progressive. I would be grateful if he could confirm that this CSR is also progressive. I would also be grateful if he could say something about his plans to denationalise the banks.
Mr Osborne
First, let me thank my hon. Friend for the welcome that he gave—to repeat what I said —to what I implied about PFI, the contribution that the BBC will make and the very difficult choice that we all have to make in this Parliament about what is a fair settlement on Equitable Life. In particular, helping the trapped annuitants is an absolute priority and it is a good thing and, as I said, we found three times as much money as John Chadwick recommended.
My hon. Friend raised two particular points. First, he mentioned ring fences, and although we call them ring fences, in the end they are about priorities. We have made a choice. As a coalition Government, we have chosen certain things that we are going to cut—obviously we have made some difficult decisions on welfare—but we have also chosen to spend more money on health care and the resources going into schools. Those are choices, and in the end that is what politics in a democratic country is about. We have made those choices, so I would not regard them particularly as ring fences, more as democratic choices.
Finally, on the distributional impact, we have published distributional analyses in the book that I have published today—my hon. Friend will know that we are the first Government to attempt to do this—and I will very much welcome the Treasury Committee’s inquiry on the spending review, which I know he will conduct. We have used the methodology that is used in many other countries to try to allocate the benefit in kind of public expenditure, as well as the direct income effect of some of the benefit changes. We believe that that shows this is broadly progressive, in that the top quintile pays the most and it is broadly flat across the other quintiles. The same is true of some of the annually managed expenditure decisions as well, on which we have also published tables.
I very much welcome the Treasury Select Committee’s inquiry and its work on this matter. As I have said, this is the first time the British Treasury has attempted to do this, and we very much welcome the Committee’s input.
Mr Speaker
Order. A very large number of right hon. and hon. Members are seeking to catch my eye, and I would like to accommodate as many of them as possible. I therefore issue my usual exhortation to brevity with particular force. Single supplementary questions, please, and economical replies from the Chancellor of the Exchequer.
Mr Michael Meacher (Oldham West and Royton) (Lab)
In cutting the deficit, why did the Chancellor ignore the economic growth dividend, which could yield at least £60 billion in extra Government tax revenues over the next five years? Why did he not tax at all the 1% super-rich, whose wealth has quadrupled over the past decade? And why did he not introduce a major public sector, as well as private sector, jobs and growth programme, which could most effectively cut benefit payments and increase tax revenues?
Mr Osborne
The first thing I would say to the right hon. Gentleman is that we believe strongly, as do the major employers in this country and the people internationally who look at this economy, that dealing with the deficit is essential for sustainable growth. That is what this is all about: putting the British economy and our public finances on a sustainable footing so that we can create jobs in the future and so that the economy can grow.
The right hon. Gentleman talked about taxes on the top 1%. We introduced an increase in capital gains tax, and the truth is that not everyone in my party was particularly happy about it, but Labour had 13 years and all those Budgets in which to do that. The shadow Chancellor now rather lamely says that Labour supports the capital gains tax increase, but I would love to know, when the Cabinet minutes are published in 20 or 30 years’ time, whether he ever raised this matter in Cabinet. We took a decision to increase capital gains tax to the higher rate, and last week I published proposals for increasing tax on the very highest pension contributions. That is a £4 billion tax; it was not an easy thing to do, but we have done it. We have also accepted and lived with the previous Government’s decision to increase tax to 50%—of course, they introduced that in the last month they were in office. Again, that was not an easy decision. I am not instinctively in favour of higher marginal tax rates, but it is necessary at a time like this. I am determined that all parts of the income distribution should make a contribution, but that the people at the top of the income distribution should make the most.
Finally, on the disposal of the banks, at the moment we are not in a position to do that, but of course we monitor the situation the whole time and, as and when we can dispose of them, we will. I am very keen to create a more competitive banking sector at the end of this process, which is one of the reasons why we set up the independent commission.
Karen Bradley (Staffordshire Moorlands) (Con)
Areas such as Staffordshire Moorlands were neglected by the previous Government. Will the Chancellor tell the House how areas that have been let down by policies such as regionalisation will be helped by the measures announced by this Government?
Mr Osborne
We have much more focused local area partnerships that are going to help areas such as Staffordshire Moorlands, which I suspect were rather neglected by the regional development agency. I assume that such areas were not where the action was in the west midlands, and that the emphasis would have been on the big metropolitan centres. Her town of Leek and the surrounding countryside would, I suspect, have been ignored by the RDA. One of the advantages of local enterprise partnerships—and, indeed, the regional growth fund—is that we can focus on particular areas where we want to get more private sector involvement and create jobs.
Mr David Winnick (Walsall North) (Lab)
I witnessed the misery and devastation that occurred in my black country constituency and elsewhere during the Tory years, and all the indications that the Chancellor has given today are that there will be a repeat of that, and that, despite what he has said, the people who will suffer the most will be those on the lowest incomes. This will be a day of tragedy for the British people.
Mr Osborne
The hon. Gentleman is not known for overstatement, but I would say to him that we inherited a situation of rising unemployment, the biggest fall in output in a generation, the biggest banking crisis—thanks to the way in which the previous Government had regulated the banks—and a huge budget deficit. In the next hour—or however long you allow for questions, Mr Speaker—every single Labour Member who gets up should propose an alternative plan. It is very difficult to make choices, but they can attack this plan only if they have an alternative.
Bob Russell (Colchester) (LD)
I welcome the Government’s commitment to end child poverty—during this Parliament, we hope—which Labour failed miserably to do, but may I draw the Chancellor’s attention to what the coalition programme says about rented housing? Hundreds of thousands of families will be adversely affected by the removal or cutting of housing benefit. Will he confirm that local authorities have a statutory duty to house homeless families, and that the cost of bed-and-breakfast accommodation is considerably greater than that of housing benefit?
Mr Osborne
The housing benefit budget has been rising at a very rapid pace and, frankly, anyone doing my job would have to address that bill. We have sought to do that in a way that is fair and that balances the needs of the taxpayer with the needs of those in receipt of housing benefit. There has been a lot of speculation about social tenants, but we are not changing the social tenancy agreements of people in existing social tenancies—[Hon. Members: “Yes you are!”] That is what we are not doing. We are saying that for new tenants we will have to have something more like the market rent. I have to say that that was the policy of the previous Government—
Mr Osborne
But it was the stated policy of the previous Government to increase social rents over time to approach the level of market rents—[Interruption.] That was the policy of the previous Government. As I have said, we have tried to do this in a way that protects existing social tenants. It will help to build more social housing, and in the end the Opposition have to ask themselves why they failed so miserably on building social housing.
Stewart Hosie (Dundee East) (SNP)
The Chancellor has announced 500,000 job losses and cuts of £81 billion—that is just the cuts, not the tax increases—while giving no detail of how that will be achieved. This will cause huge anxiety among those in the public sector and those who depend on their services, and in the private sector firms that are dependent on public sector contracts. I believe that this is reckless: it cuts too fast and too deep. I have one question today: how can the Chancellor possibly imagine that, after his statement, a real-terms, direct cut to the Scottish block of around £4 billion can do anything other than weaken the ability of Scotland to recover in these difficult economic times?
Mr Osborne
First, we have preserved the Barnett funding arrangements. Secondly, the decisions that we have taken on the national health service and schools budgets in England will help the funding settlement for Scotland. What we are seeking to do, north and south of the border, is to put the United Kingdom’s economy on a strong and sustainable footing so that there can be growth in Scotland and in the rest of the country. My final observation is that people are pretty clear, in the House and in Scotland, that if Scotland had been independent over the past three years, given the scale of the banking crisis, it would now look like Iceland.
Robert Halfon (Harlow) (Con)
My constituents will welcome this Robin Hood public spending statement, particularly the resources that are going into cold weather payments, apprenticeships and help for young children. Does the Chancellor agree that people would rather have lower taxes and more spending on public services than spend £120 million a day paying off the debt?
Mr Osborne
My hon. Friend is right. This country is spending £120 million a day on debt interest. So all the pet projects that Labour has suddenly discovered—[Interruption.] Well, the truth is that the previous Labour Government inherited a golden economic legacy from the Conservatives, but we have been left the worst economic inheritance that any peacetime Government in this country have ever faced. Unfortunately, we have to deal with it, but we are doing that as two parties working together to clean up the mess that one party created. The goal that I have in sight is a more prosperous, sustainable economy and a public finance situation that is deliverable and affordable for the people of Harlow.
Teresa Pearce (Erith and Thamesmead) (Lab)
The Chancellor has told us that we can expect 490,000 public sector jobs to go in the next five years, while PricewaterhouseCoopers has made an expert estimate that another 500,000 private sector jobs will go. How does putting out of work 1 million people, who will no longer pay tax and will add to the jobseeker’s allowance and housing benefit budgets, cut the deficit and add to growth?
Mr Osborne
I shall make a couple of observations. First, the independent Office for Budget Responsibility—the hon. Lady is, after all, quoting its forecast, so I presume that she would accept its whole forecast—has predicted that unemployment will fall and that more private sector jobs will be created. Secondly, she must accept—even the deficit deniers in the Labour party must accept it, and they admitted it during the general election—that there would have been a reduction in the public sector head count if there had been a Labour Government. I do not know whether the hon. Lady agrees with that—she can shake her head, nod or whatever—but that is the truth. We have had to make some decisions, but there is a high turnover in the public sector anyway, so we hope that much of this can be accommodated by posts not being filled. There will be redundancies—I think the Labour party has accepted that there would have been redundancies under its plan—but we are going to do everything we can to deal with that situation and help those people to find work. In the end, however, the current size of the budget deficit means that we have to deal with this situation, or many, many more jobs would be at risk. Let us remember that this Government came into office with unemployment rising, and that is what we have had to deal with.
Nadhim Zahawi (Stratford-on-Avon) (Con)
The shadow Chancellor, although very good at the jokes, demonstrated in his response his confusion about the difference between fiscal and structural deficit. I wondered whether the Chancellor could help by explaining that difference to him.
Mr Speaker
Order. I do not think that we will go with that. With respect, Members must get into the habit of asking questions about the policy of the Government, not about advice to shadow Ministers. Let us get that straight.
Mr Jack Straw (Blackburn) (Lab)
The Chancellor of the Exchequer failed to answer the question put by my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson) about the extraordinary 11,000 reduction in the number of front-line probation and prison staff in the Ministry of Justice. Will the Chancellor confirm that this runs completely counter to what the Prime Minister said on 2 May about protecting front-line services, and that, even worse, it can only be a grave gamble with the security and safety of the British public and will eat away at the very successful fight against crime?
Mr Osborne
Obviously, I do not agree with right hon. Gentleman. All Government Departments have had to make savings. Is he really telling me that if his party had been re-elected and he had been in the Cabinet, the Ministry of Justice would somehow have been protected from any reductions?
Mr Osborne
Let me explain a couple of things to the right hon. Gentleman. First, as a member of the Cabinet, he fought the general election on protecting part of the health service, not the whole of it, if I remember correctly. He talked about two years of real increases in school funding, but we are going with four. I think he also made a promise on police numbers, but the then Home Secretary ditched the promise in the middle of the general election. The Ministry of Justice has to make a contribution. The right hon. Gentleman says, “Not on this scale”, but over the next four years, the actual reduction in non-protected Departments would have been greater under his Government than under ours because of the decisions we have taken on welfare. The Institute for Fiscal Studies calculated a figure of minus 20%; it is minus 19% in our figures. The Ministry of Justice is, of course, part of one of those non-protected areas.
James Morris (Halesowen and Rowley Regis) (Con)
I welcome the Chancellor’s statement, and I know that many hard-working people in my constituency will support the welfare reforms he has announced. Does my right hon. Friend agree that the welfare reform proposals made today are vital because the decisions were ducked by the previous Government?
Mr Osborne
My hon. Friend is absolutely right. These decisions are absolutely vital to provide economic stability and to make sure that Britain does not go back to the brink of bankruptcy. What I would say to my hon. Friend and his constituents, many of whom work extremely hard and for long hours to pay their taxes, is that it is not acceptable for those taxes to go into the debt interest that we pay to foreign creditors when we really want the money spent here at home. That is what this is all about—trying to reduce our debt bills and bring some economic stability by reforming a welfare state that, frankly, grew out of control. We have taken the decisions today. If people have alternatives, they can put them on the table.
Mr Clive Betts (Sheffield South East) (Lab)
With regard to the new rents at 80% of market rent levels for social housing tenants, when a tenant is out of work, will the rent be covered totally by housing benefit? In that case, is there no new money to pay for social housing? When a tenant is in work or seeking it, will not these new higher rents provide a disincentive to going out to work? Will the rents apply to existing tenants who seek to move home, which would be a disincentive to mobility?
Mr Osborne
We have had to take some difficult decisions on housing benefit, but I think they are fair and we have sought to protect the most vulnerable. Of course, the universal credit we are introducing means that it will always pay to work—that is the basic principle and housing benefit is part of it. The Secretary of State for Communities and Local Government will set out the reforms in detail. The principles are set out in the document, which the hon. Gentleman can look at. As I said, existing social tenants will be protected through their rent agreements.
Simon Hughes (Bermondsey and Old Southwark) (LD)
The Government have rightly taken decisions to deal with the deficit left by the international recession, the banks and the outgoing Labour Government. Can the Chancellor confirm that the policy behind the statement is not just that those with the broadest shoulders should carry the biggest burden, but that as well as children, pensioners and households on the lowest incomes will be protected most, which will be supported by the assessment of the impact of the Budget and the statement he has made and presented today?
Mr Osborne
The poorest suffer when a country loses control of its public finances. That, indeed, was the assessment of the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), and it was one of the few things he said that I agreed with. Constituents on the lowest incomes benefit from a Government trying to deal with this economic problem. The structural deficit—someone asked me about it—is the bit that does not go away when the economy grows. Labour Members seem to be suggesting that in four years’ time, a Chancellor of the Exchequer will stand up to announce the next four-year programme of cuts, which would not do this country much good.
Specifically on pensioners, we have of course taken the big decision to link the basic state pension to earnings, and we have protected the pension credit. Yes, there have been some difficult decisions on welfare, but I have sought to protect the most vulnerable, and I believe that our overall welfare reforms will help to provide incentives to many in our country who do not currently have them to seek employment.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
It is very disturbing that this statement simply does not disclose the extent of the cuts being made to transport, although it is clear that there will be a massive increase in both train and bus fares. How can that help economic recovery, including people’s ability to get to work?
Mr Osborne
We are spending more on transport projects over the next four years than was spent during the last four years. I have made every effort to prioritise transport spending, which has led to other questions coming down the line. Given that the hon. Lady is a Liverpool MP, I thought she might at least welcome the Mersey Gateway project. I am an MP for the north-west, as is the right hon. Member for Blackburn (Mr Straw), and we have been talking about the Mersey Gateway project for an awful long time. It is going ahead.
Richard Harrington (Watford) (Con)
Will my right hon. Friend confirm to me and my constituents that the purpose of today’s announcement is to take public expenditure back to 2008 levels, not 1888 levels as some Opposition Members have implied?
Naomi Long (Belfast East) (Alliance)
Given that Northern Ireland has a great reliance on the public sector, which means that these cuts will hit it pretty hard, when do the Government intend to bring forward their promised proposals to look at rebalancing the economy in Northern Ireland, along with the Northern Ireland Executive?
Mr Osborne
Of course there are difficult decisions today, but because of the decisions we have taken on the English health service and the English education system, Northern Ireland gets a relatively favourable settlement in comparison with some other parts of the country. We have also made the decision today on the Presbyterian Mutual Society and we want to work with the devolved Administration to ensure that people who have had no certainty for a long time can now get it and get some money for the savings they have lost. I promise the hon. Lady that my right hon. Friend the Secretary of State for Northern Ireland regularly raises with me issues about growth and investment in Northern Ireland. As I am sure the hon. Lady knows, he has lots of ideas for stimulating economic activity, and I believe he is going to bring forward his proposals later this year. We will all be able to participate in the debate about them at that time.
Ms Louise Bagshawe (Corby) (Con)
Does my right hon. Friend share my joy at the shadow Chancellor’s admission that the deficit must be reduced, and my mystification that he is apparently so bereft of ideas that today he sent an e-mail asking for “Answers on a postcard, please”?
Mr Speaker
Order. I must ask for a very brief reply. I hope that the message will be received.
Liz Kendall (Leicester West) (Lab)
Cutting funds for local councils by 28.4% over four years will decimate services in Leicester West, and allowing councils to borrow against business rates will further widen inequalities, as areas with more private businesses can borrow more to improve services. Can the Chancellor explain to me, and to my constituents, how that is fair?
Mr Osborne
I am sorry that the hon. Lady is opposed to more freedom for local government—[Interruption.] Well, that is what my increment financing proposal means. Along with our other decisions about grants, it means more freedom for local government. As I have said, this is a challenging settlement for local government. [Interruption.] Let me repeat that the Labour party created the budget deficit, and if the Labour party does not have a plan, it is in no position to criticise those who are trying to sort out this mess.
Tony Baldry (Banbury) (Con)
Do not an increase in the number of adult apprenticeships, commitment to the digital economy through the rolling out of universal super-fast broadband, investment in the green investment bank, protection for the science budget and the encouragement of green-collar jobs demonstrate the coalition Government’s belief, with every fibre of our being, that the only way forward for the country is a private sector-led recovery which will generate real wealth and real, new jobs for the 21st century?
Mr Osborne
Of course I agree with my hon. Friend. We made every effort to protect the science budget—that was one of the things that we strained to achieve—and if the efficiency proposals in the Wakeham report are implemented, that will lead to a real increase in scientific output. We have also been able to confirm the synchrotron project in Oxfordshire. Although Oxfordshire is extremely well-represented in the Cabinet, it is unfortunately not one of the counties that will benefit from a super-fast broadband pilot, but I hope that if the pilots are successful we will be able to roll them out in other rural parts of England, including the Banbury constituency.
Hazel Blears (Salford and Eccles) (Lab)
According to the independent organisation New Philanthropy Capital, the massive cuts of nearly 30% in local councils’ budgets over the next four years will mean cuts of between £3.2 billion and £5.1 billion in charitable and voluntary bodies which provide essential services for many of the most vulnerable people in our communities. What action will the Chancellor take to ensure that the Prime Minister’s much-vaunted big society does not end up smaller and weaker, and leave thousands of the most vulnerable citizens at risk?
Mr Osborne
As I mentioned early in my speech, we have provided some additional resources for the voluntary sector through the transition fund. As for the local government settlement, I said that it was challenging. The right hon. Lady, who used to be a member of the Cabinet, is well aware that some difficult decisions were required to reduce the deficit. If there are other areas of Government spending that she would have preferred me to cut more, she can tell me what they are, but she did not volunteer any in her question.
Jesse Norman (Hereford and South Herefordshire) (Con)
May I say, on behalf of not merely the people of Herefordshire but people in rural counties everywhere, how thrilled I am about the new super-fast broadband pilot? That is magnificent news. May I also ask the Chancellor whether it made a difference that the previous fundamental savings review had not been implemented when he came to see the problem face to face?
Mr Osborne
It did make a difference, and I found in the Treasury absolutely no plans to reduce the budget deficit. They were pencilled into the March Budget, which Labour Members all cheered at the time, but absolutely no plans were put in place.
I am delighted that we have been able to help Herefordshire in this way. It is one of the most rural parts of England, and I think that super-fast broadband is key to the future of the rural economy.
Sammy Wilson (East Antrim) (DUP)
We understand the economic mess that the coalition Government have inherited and the problems that it presents, but the spending review represents a huge gamble with people’s jobs, with economic growth and with public welfare. I suppose we all hope that it pays off.
How does the fact that capital expenditure will fall by 40% over the next four years in an already fragile Northern Ireland economy sit with the promise from the Secretary of State for Northern Ireland only last week that the investment programme would be protected? What assessment has the Chancellor made of the impact on his desire, and that of the Northern Ireland Executive, to rebalance the Northern Ireland economy?
Mr Osborne
Let me say first that the biggest gamble that the country could have taken in the current world environment would have been not to set out a credible plan to reduce the budget deficit. If we had not set out that plan and made our decisions, we really would have been in the firing line. Secondly, the capital spending cuts that I have—unfortunately—announced today are less than those proposed in the Labour Government’s plan, because of the increase in the capital envelope that I announced. That does make them particularly easy, but I have sought to prioritise infrastructure investments, and if there are good projects in Northern Ireland we can work on them with the devolved Administration. This is, of course, an area of devolved responsibility.
Finally, let me say that one of the absolute priorities of my right hon. Friend the Secretary of State for Northern Ireland, after security, is enabling the economy to grow and a private sector recovery to take place in Northern Ireland. I am sure it will be possible to arrange, some time later this year, an opportunity for us all to get together—the representatives in Northern Ireland, the Secretary of State and I—to discuss what we can do to help Northern Ireland see that private sector job growth.
Nick de Bois (Enfield North) (Con)
While I greatly welcome today’s announcement, my constituents—particularly my younger constituents, who live in an area where there is one of the highest levels of youth unemployment—would be keen to know what specific measures will be taken to support apprenticeships, thus enhancing their chances for the future.
Mr Osborne
We have already announced a record investment in apprenticeships, and many tens of thousands of additional apprenticeships. That is because of the difficult decisions that we made elsewhere in the Budget, and I think it shows that we are investing in the skills that our economy needs for the future.
Mr Andrew Love (Edmonton) (Lab/Co-op)
The Chancellor has announced the loss of 490,000 jobs in the public sector, and has not challenged the forecast by PricewaterhouseCoopers that 500,000 jobs will be lost in the private sector as a consequence. What estimate has he made of the number of jobs that will be lost in the construction sector, in view of what was said by my hon. Friend the Member for Sheffield South East (Mr Betts) about cuts in funds for social housing? Given the accepted sluggishness of the private sector recovery in the economy, will we not see significant increases in overall unemployment in the next year?
Mr Osborne
The hon. Gentleman, who is a member of the Treasury Committee, knows that the budget deficit was threatening the economic stability of the country. He also knows that his party proposed to eliminate the structural deficit over a slightly longer period than we propose. That, however, would not have reduced the scale of the cuts; it would merely have prolonged them. A structural deficit is a deficit that does not return when the economy grows. That is the definition of a structural deficit.
We are investing in road projects, and in housing projects: we are providing 150,000 new homes. The hon. Gentleman probably has not had time to study the document, but the capital cuts that have been set out today are less than the capital cuts in the March Budget presented by the Labour party.
Gavin Williamson (South Staffordshire) (Con)
Will my right hon. Friend assure the House that, unlike the Labour party, which abandoned Prudence after two years of government and pursued the policies of economic recklessness, he will continue to hold Prudence close to his heart to ensure that we have long-term stability and growth?
Mr Osborne
I can assure my hon. Friend that I am planning a long-term relationship with Prudence.
Mark Durkan (Foyle) (SDLP)
Can the Chancellor assure us that the green investment bank will be active and accessible to all regions, including Northern Ireland, and that relevant projects will not be disqualified by virtue of having a cross-border character? That would be entirely appropriate, given our market and environmental context.
Mr Osborne
In my statement, I set aside £1 billion of direct Government funding for the green investment bank. That will, I hope, be the minimum sum. I also want to dispose of certain Government assets and put the money from those sales into the bank, but I wanted to provide a minimum of £1 billion in case those asset sales took longer to realise than we hoped. I also want to lever in private sector investment so that the bank is a very successful vehicle for helping all parts of the United Kingdom invest in green energy. I am very happy to consider the case for cross-border projects because, obviously, the economies of Ireland and Northern Ireland are very closely linked, and I will come back to the hon. Gentleman on that specific point.
Sarah Newton (Truro and Falmouth) (Con)
We have inherited a social care funding system that is just not fit for purpose and that lets down tens of thousands of the most vulnerable people in our society. I greatly welcome the extra £2 billion of funding while we establish a new and reformed system. When will details of the extra funds be made available?
Mr Osborne
There are details in the book we have published today, and we will set out more details in the coming days. Also, we are, of course, waiting for Andrew Dilnot’s report into social care. We have tried to address a long-established problem that we are all aware of in our constituencies: the wall that is sometimes there between the health service and the local authority. Given the challenging nature of the settlement, I was conscious that social care might be affected, which is why I found the additional £2 billion for it.
Phil Wilson (Sedgefield) (Lab)
The Chancellor said in his statement that he would like the country to be able to afford new rolling stock. Can he say what that means for the intercity express programme, considering both that if it does go ahead it will create hundreds of jobs in my constituency and thousands more in the north-east of England, and that no public sector money will be required until after the next election?
Mr Osborne
I am very aware of that project. If the hon. Gentleman will bear with me, the Secretary of State for Transport will make an announcement on it shortly.
Stephen Williams (Bristol West) (LD)
The Chancellor said that fairness was one of the objectives of his statement. I grew up in poverty—in fact, I was on free school meals—and one of my ideological objectives in politics is to deliver social mobility, so will the Chancellor confirm that the £7.5 billion of extra investment he has announced today is the biggest part of the CSR and will help unlock potential in some of the poorest families in the country?
Mr Osborne
My hon. Friend brings a life experience to bear on this debate. The two biggest settlements have been for health and education. In education, we have particularly prioritised disadvantaged children, primarily those on free school meals. At the heart of the coalition agreement was the commitment to a £2.5 billion pupil premium. We have found that money on top of the flat cash settlement per pupil, even when pupil numbers are rising. It leads to a real increase in resource in schools—over four years, rather than the two years that the Labour party was offering at the general election. We are also offering for the first time 15 hours of free education for all disadvantaged two-year-olds, which will of course include those on free school meals. That offers a real chance to ensure that other people on free school meals have as successful a career as my hon. Friend.
Joan Ruddock (Lewisham, Deptford) (Lab)
The Chancellor said that he will replace the education maintenance allowance with more targeted support. Can he tell me and the thousands of families in Lewisham who will be affected what could be more targeted than £30 into the pocket of a family who are bearing the extra burden of keeping a teenager at school?
Mr Osborne
We looked very carefully at this programme, and it has a very high dead weight. We are raising the compulsory participation age to 18 and funding that—one of the policy’s original stated purposes was to get people to stay on after 16—and we will introduce a more targeted scheme, so there will be help. I have to say that we conducted a public consultation over the summer, and we received 100,000 responses, many from parents and children in receipt of EMA. It was one of the most prominent issues raised, and the overwhelming view of the responses was that it was not a well-targeted support. That has certainly been my experience from those in some of the schools that I have visited. We are looking for a more targeted payment that actually helps those whom this financial incentive would really encourage to stay on in education.
Mr Rob Wilson (Reading East) (Con)
I welcome the Chancellor’s commitment to protecting the science budget and his comments on Lord Browne’s review of university and student funding, but does he agree with me—and, apparently, the new shadow Chancellor—that the problem with a graduate tax is that the money goes straight to the Treasury and not to the universities?
Mr Osborne
My hon. Friend is absolutely right, and he has considerable experience in this area. The problem with the graduate tax, which we honestly looked at and honestly considered—[Interruption.] Actually, an enormous amount of work was done in looking at the feasibility of the graduate tax, some of it by the previous Government: the shadow Chancellor was the higher education Minister who ruled out a graduate tax, and under the previous Government the education Department published a paper about why it would not work. As I have said, we looked at this idea carefully—we approached it in a genuinely open-minded way—but there were many disadvantages to it. One of them was that it would represent a massive centralisation of the university system with, basically, the Treasury controlling, almost to the last pound, how much different universities would get. That is why, as I understand it, the Russell group of universities—for a start—are completely against it.
Sir Stuart Bell (Middlesbrough) (Lab)
On the Prime Minister’s statement which the Chancellor confirmed, the House will welcome the facts that the science budget is safeguarded, that the adult apprenticeship scheme will be advanced, and that £500 million will go into the Tyne and Wear metro and the Tees valley bus network.
Following on from the questions of my hon. Friends the Members for Erith and Thamesmead (Teresa Pearce) and for Leicester West (Liz Kendall), since the Chancellor places so much emphasis on fairness, how can it be fair to make 490,000 people unemployed in the public sector and a putative further 500,000 in the private sector? How can that be a sensible policy for growth?
Mr Osborne
That is, quite frankly, a deliberate misrepresentation of the number, which was produced independently. The number is for the reduction in the public sector head-count over four years. As I have said, there will be redundancies, but there will also be posts that go unfilled. The plan set forward by the Labour party also involved a reduction in the head-count of hundreds of thousands; the Leader of the Opposition admitted that on a number of occasions during both the general election and his party’s leadership contest. We have all got to face up to this challenge, but I should point out that the same organisation that produced the number that the hon. Member for Middlesbrough (Sir Stuart Bell) cites—the Office for Budget Responsibility—also forecasts falling unemployment through to 2014.
Andrew Percy (Brigg and Goole) (Con)
I welcome the commitment to infrastructure funding for Yorkshire and Humber, which follows the announcement on the review of the Humber bridge tolls two weeks ago. I also welcome the commitment to offshore wind energy. Just last week in North Lincolnshire, Labour and Conservative councillors voted through an offshore wind development at the South Humber gateway, which has the potential to bring 5,000 jobs to the region. However, that is now in jeopardy because Natural England is requesting that it be called in for a public inquiry, with the risk that the jobs will go to mainland Europe. Given the commitment to offshore wind, will the Chancellor have a quiet word with the Secretary of State for Communities and Local Government and encourage him to reject that application for a public inquiry?
Mr Osborne
I think that I would get myself into a lot of legal hot water if I were to do that, but let me make a couple of observations. First, all involved in planning decisions, whether at local, area or national level, should take into account the need for the economic investment that the British economy must have over the coming years and give that due consideration. Secondly, we have found additional money for offshore wind technology investment, including manufacturing at port sites, which was one of the issues the trade unions raised with me as a particular priority. Finally, both my hon. Friend and our hon. Friend the Member for Beverley and Holderness (Mr Stuart) have been very persistent in asking for a Treasury review of the Humber bridge tolls—in which no doubt the shadow Chancellor takes an interest, too—and there will be a Treasury-led review of the tolls, but I am not going to prejudge its outcome.
Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)
The Department for International Development operates within my constituency, and many people will welcome today’s commitment by the Government to spend 0.7% of GDP on international development. However, can the Chancellor tell me how much of that budget will be assigned to works previously delivered and paid for by other Government Departments, agencies and non-departmental public bodies?
Mr Osborne
There is a very substantial increase, of about 37%, in DFID’s budget. There are parts of international development work that the Foreign and Commonwealth Office carries out too—conflict stabilisation and the like. It is, of course, perfectly within the rules set on the UN commitment, which are internationally policed and so we cannot fudge them, and perfectly reasonable to count that expenditure towards the 0.7% target. However, the large bulk will be delivered through DFID, whose budget has a substantial increase. I suggest that it is a task for this House—all parties—to ensure that that development aid is well spent on the poorest people and on conflict prevention.
Andrew Bridgen (North West Leicestershire) (Con)
Does my right hon. Friend agree that the reason why the previous Labour Government failed to hold a spending review was because they bottled their responsibilities? Does he also agree that Labour Members are still running away from those now and that the cuts that we are seeing are no more than the butcher’s bill for 13 years of Labour profligacy and waste?
Mr Osborne
I completely agree with my hon. Friend. It is striking that in all the responses and everything that we have heard today from Labour Front Benchers and Back Benchers there has not been a single positive proposal as to how to reduce the deficit that they all sat there and allowed to grow.
Simon Danczuk (Rochdale) (Lab)
What will the increase in train fares do to get people out of their cars and on to the trains?
Mr Osborne
What I would say to the hon. Gentleman is that, again, we have to take a realistic decision about investment in our railways. We are going to invest £14 billion in them and we also want to invest in new rolling stock, on which I was asked a question by the hon. Member for Sedgefield (Phil Wilson), who has now left his place. That has required a tough decision on rail fares, but I hope that passengers will at least understand that if we want investment in rail stock we have to be able to afford it, and the people who use the rail stock should make a contribution to that.
Sajid Javid (Bromsgrove) (Con)
I welcome the bold and powerful statement that my right hon. Friend has made today and, in particular, the efforts to protect the most vulnerable. Does he agree that the biggest risk to our economy would have been to have done nothing at all, as advocated by most Labour Members, and that the action that he has taken today will do the most to restore economic confidence to our economy?
Mr Osborne
I agree with my hon. Friend. Whoever won the general election—whoever formed the Government—was going to have to come to the House of Commons to set out a plan for reducing the highest budget deficit in our peacetime history; the deficit is considerably higher than it was when Denis Healey had to go to the International Monetary Fund. We have set out those proposals, and I believe that they will deliver certainty and stability going forward. The market interest rates for British businesses and British families are already lower as a result of the decisions that we have taken since coming into office. As for the decisions that we have announced today, I have noted that not a single Labour Member has asked me about the increase in the child tax credit, which will help 4 million families.
Caroline Lucas (Brighton, Pavilion) (Green)
I am not sure how the Government can claim to be the greenest ever when it is estimated that Department of Energy and Climate Change and Department for Environment, Food and Rural Affairs funding combined will reduce by 47% in real terms over the next four years. However, my question is this: should the Chancellor not do more than just hope that the private sector will fill the huge gap between the £1 billion he has set aside for the green investment bank and the £4 billion to £6 billion that Ernst and Young says is the minimum required? He said that he would try to find a bit more through the sale of assets, but how much does he imagine that will fund as well?
Mr Osborne
There is commitment, even in these difficult times, to a carbon capture and storage demonstration, to the development of offshore wind technology and manufacturing at port sites, and to a renewable heat incentive. On the green investment bank, it would have been easy to say, in my position, “Let’s wait to see whether we can get some Government asset sales and some private sector money; just create the body and hope it gets the funding.” I wanted to provide a back-stop and I have done so today by making available £1 billion from general Government expenditure. However, I also want to see substantial Government asset sales go into the green investment bank and to lever in some private sector money, so that it is a multi-billion pound force for investment in our country.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
I congratulate the Chancellor and the Chief Secretary to the Treasury on this spending review. Delivering investment in 21st-century infrastructure will be welcomed by my constituents, as will the spending to protect the post office network and, most importantly for us, to deal with coastal erosion. Does he agree that it is the coalition Government who are making the difficult and politically courageous spending decisions? That has also been reflected today in the European Parliament, where Conservative MEPs voted to reduce the European Union budget, unlike Labour MEPs, who did not take that opportunity and instead also voted for tax-raising powers for the EU.
Mr Osborne
My hon. Friend tells me something that I did not know, which is that the behaviour of Labour MEPs is completely inconsistent with the message from their party that it is serious about trying to reduce Britain’s budget deficit. The money that we have found for flood and coastal defences totals about £2 billion and will help 145,000 households. Obviously, the relevant Secretary of State will make the announcements about the different tranches that will now go ahead, and I wish Suffolk Coastal every success.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
This is further to the question asked by my hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) and refers to the Chancellor’s use of the words “conflict resolution”, which strangely were also used several times by the Prime Minister yesterday in the context of a statement on defence expenditure. It also recalls the episode of the Pergau dam. Can the Chancellor give us an absolute assurance that ring-fenced funding for overseas aid will not find its way into defence commitments and will be used for the purposes outlined in the millennium development goals?
Mr Osborne
Let me say to the right hon. Gentleman that, first, the 0.7% target is internationally monitored and so, having said we are going to hit it, we obviously do not want to find the international bodies saying that we have badged overseas aid in the wrong way. [Interruption.] May I say to the hon. Member for Brent North (Barry Gardiner) that we have increased the international aid budget by almost £4 billion today? I understand that lots of Labour Members, and indeed Members on this side of the House, want to ask questions about specific difficult decisions that we have taken, but to quibble about the massive 37% increase in DFID’s budget is a little unfair. We have made a decision as a House of Commons to hit the 0.7% target, as internationally observed—all parties were committed to this in the general election—which we have to understand has consequences in Government budgets elsewhere. That involves a substantial increase in the international development budget. We are funding very specific projects on malaria, maternal health and the like, and as a country we should be proud and tell the world about our commitment, rather than suggest that the rules will be fudged when they cannot be because they are internationally policed.
Mr Aidan Burley (Cannock Chase) (Con)
Will my right hon. Friend take this opportunity to nail, once and for all, the lie perpetuated by many Labour Members that the international banking crisis is in some way completely responsible for the budget deficit, given that, in reality, the figures show that just £40 billion of the total £667 billion spent by Government last year went to prop up the banks?
Mr Osborne
If my hon. Friend has not yet had the opportunity to do so, he should look at chart 1.1 in the book produced by the Treasury, which shows that a structural deficit was emerging throughout the past decade and that that made Britain particularly ill-prepared for what happened in our banks. Of course, the poor regulation of our banking system meant that this country was probably affected more than any other, except for Iceland and perhaps Ireland. We are trying to sort that out, by addressing not only the public finances, but the regulation of the banks. As I say, if we had fixed the roof when the sun was shining, we would have been in a better condition to deal with the storms.
Jeremy Corbyn (Islington North) (Lab)
The Chancellor will be aware that housing is the biggest and most serious problem facing people in my constituency, because of overcrowding and a shortage of social housing. His proposals in July to cap housing benefit render at risk the lives of many people living in private rented accommodation, where the rent is paid by housing benefit, and his proposals now to have two tiers of council tenure do not sit very well, because one tenant will be living in secure accommodation on a fixed rent of about £100 a week whereas their next-door neighbour, because of an accident of dates, will be paying at least twice that in rent and will have no security of tenure. How does that fit with the notion that we are all in it together?
Mr Osborne
There is a problem in social housing, but frankly the party that the hon. Gentleman supported in this House—on and off—for 13 years did absolutely nothing to address it. We are trying to reform social housing provision so that more homes are built and so that there is more availability of socially rented properties, unlike the fall that we have seen recently. He talks about his constituents and he must ask himself—I certainly confronted this—whether it was fair to ask the people of his constituency who go out to work to fund housing benefit bills of £50,000, £60,000 or £70,000 a year. That is totally unaffordable to the working people of Islington. We have introduced what I think is a perfectly reasonable rule that the average family out of work should not get more in benefits than the average family earns in work. I find it difficult to see how people could object to that.
Andrea Leadsom (South Northamptonshire) (Con)
Does my right hon. Friend agree that in this country the key to our economic recovery will be the development and growth of new small and medium-sized enterprises? More people are employed in SMEs in this country than in any other sector. Does he also agree that in order to get SMEs up and running, it will be key that they have better funding, and that we remove barriers to entry for new providers to get funding to new SMEs?
Mr Osborne
I did not mention in my speech that we are funding the enterprise finance guarantee scheme to help small businesses get access to credit. In the Budget I also stopped the increase in the small companies tax rate that was going to take place under the previous Government. We want to help the small businesses and medium-sized enterprises that are the engine room of our private sector economy. I hope that some of the transport infrastructure, which is something that businesses often raise with us, set out today will help.
Mr Speaker
Order. This statement can run for only a few more minutes, so some people will be disappointed, but I reiterate the appeal for short questions. Help yourself and help others in the process.
Natascha Engel (North East Derbyshire) (Lab)
The Chancellor has announced a cut of 490,000 jobs in the public sector. Whichever way he slices it, that still means that even after four years and even if it is down to natural wastage there will be 490,000 jobs in the public sector that are lost to the economy. He also wants to move people off benefit and into work to save on the welfare budget. How does he make this add up? Where are the jobs coming from that the people who are now on welfare—
Mr Osborne
First, to put it in context, close to 200,000 jobs have been created in the last three months. Secondly, the Labour party’s plans involved a head-count reduction of more than 400,000. It was accepted by Labour politicians during the election that there would be a head-count reduction and that there would be redundancies. This is what happens when a country loses control of its public finances. If we had been better managed over recent years—if the people doing my job before me had managed to avoid this record budget deficit, which is the largest in the G20—[Interruption.] Opposition Members keep saying that this is all to do with the international situation. They have not yet managed to explain to me why we were the worst affected in that international situation. We have to take some difficult decisions, but it will help if private sector recovery helps to create jobs. The number that the hon. Lady keeps using is a number from an independent body—the Office for Budget Responsibility—that she presumably regards as credible, since she is quoting it, but the OBR also forecast falling unemployment over the period. She cannot really use one forecast from the body and not the other.
Mary Macleod (Brentford and Isleworth) (Con)
When my right hon. Friend met the IMF and World Bank officials in Washington recently, did they agree with his approach on reform, fairness and growth, which he has presented today, or did they suggest something else, like the Opposition have?
Mr Osborne
They said very clearly in their article IV assessment of the British economy that the measures we had taken were essential for fiscal sustainability. They do not always say that kind of thing about economies—last year, they criticised the previous Government’s economic plans. To be honest with my hon. Friend, I did not share all my detailed budget plans with the IMF; I thought I would share them with the House of Commons first.
Jim Shannon (Strangford) (DUP)
In the statement, the Chancellor did not mention additions to tax credits at any stage. One of the anomalies before the statement was made was, I understand, that people on an income of £45,000 would be penalised in their tax credits whereas those who had two incomes coming into their house, perhaps totalling £80,000, would not be penalised. That money is not cappuccino and cupcake money—it is for education and clothing for their children and for the mortgage. What steps will the Chancellor take to help those people?
Mr Osborne
I think the hon. Gentleman is referring to child benefit, and it has clearly been a difficult decision to remove child benefit from families where there is a higher rate taxpayer. It raises £2.5 billion. It is interesting to note that, although it was the first issue raised by the Leader of the Opposition at Prime Minister’s questions last week, not a single Labour MP has mentioned it. I think they are beginning to realise that making this their priority for public spending is probably a mistake. I understand that it is a difficult decision, but I have to try to make this fair. These higher rate taxpayers represent the top 20% of earners and the decisions that I have taken have tried to make this fair across the income distribution.
Paul Uppal (Wolverhampton South West) (Con)
It is often said of the last Labour Government that although talk is cheap, the consequences of their actions were very expensive. Does the Chancellor agree that the sentiment of the spending review is not about cuts but about responsibility and the financial responsibility that we bequeath to our children and our grandchildren?
Mr Osborne
My hon. Friend makes a very good point. We have talked a lot about fairness and about fairness across the income distribution, but there is also a fairness between generations. If we do not deal with these debts and do not have a credible plan, it will be our children and grandchildren who are saddled with the debts that we were not prepared to pay. I think that is very unfair.
Mr David Lammy (Tottenham) (Lab)
The Chancellor describes the cuts to local government as challenging, but will he clarify whether cuts to the area cost adjustment and to specific grants mean that cuts to local authorities could be up to 35%? Both those grants are based on deprivation. How does he reconcile that with his obligations on child poverty?
Mr Osborne
The right hon. Gentleman is obviously—I do not hold this against him—a centraliser rather than a localiser. He would like all these decisions to be taken by people doing my job and directed to elected local councils through grants. We take a different approach. We are sweeping away a lot of these grants. I have to say however—I am sure that this will be of interest to people in his constituency, as I know something of the nature of it—that the increase in the child tax credit will help. We have also, at the insistence of the Secretary of State for Communities and Local Government, put a great deal of resources into the Supporting People programme, which is particularly important in areas such as that represented by the right hon. Gentleman.
David Rutley (Macclesfield) (Con)
Does the Chancellor agree that the investments spelled out today in the regional growth fund will go a long way to help underpin growth and private sector jobs in the north-west, which we both represent?
Mr Osborne
As my hon. Friend is my local MP, I had better agree with him. His predecessor—people will remember the former Member for Macclesfield—was passionate about supporting manufacturing and I am glad that the torch has been passed to a new generation there. My hon. Friend is right. We need to see a private sector recovery and we need to see growth and investment in the north-west of England. We want to get away from the economy that we have seen over the past 10 years, where all the growth was focused on one sector and where, from memory, for every 10 jobs created in the south-east of England by the private sector one job was created in the midlands and the north. That is not a sustainable economic model.
Derek Twigg (Halton) (Lab)
I was grateful to hear the announcement from the Chancellor about the Mersey Gateway, which has all-party support. However, he knows that it must have funding to ensure that it can go ahead. Will he set out today, given that he is a local MP, what funding is allocated for the Mersey Gateway project?
Mr Osborne
I do not have the exact number to hand, but I shall give it to the hon. Gentleman this afternoon. We are funding the project as it was set out. I know the chief executive of Halton borough council because he used to be the chief executive of my local borough council. I have discussed it with him and I hope to have further discussions to ensure that the bridge is built and that the private investment linked to the bridge comes in. I shall give the hon. Gentleman the exact number later today.
Alec Shelbrooke (Elmet and Rothwell) (Con)
May I thank the Chancellor for taking the decision to give to Equitable Life more than three times the amount that was recommended in the Chadwick report? Will he describe to the House and to my constituents what settlement he thinks that the Equitable Life policyholders might have got if the Opposition were still in government?
Mr Osborne
We know the answer to that because they had 13 years to address the problem and gave absolutely nothing. They then set up Sir John Chadwick’s report and, although I thank him for it, I do not agree with its conclusions. I strongly suspect that if Labour had won the election, they would have agreed with his conclusions, which would have meant just a third of the money that I have set out today for Equitable Life policyholders. We are helping policyholders across the piece, but our particular priority has been the trapped annuitants, whom we will fully compensate.
Lilian Greenwood (Nottingham South) (Lab)
The Chancellor has confirmed that almost half a million public sector jobs will go under his plan, and PricewaterhouseCoopers estimates that another half a million will go in the private sector. Will he explain how adding a million people to the dole so that they are paying no taxes will bring down the deficit and help our economy to grow?
Mr Osborne
Let me explain it to the hon. Lady. This country has the largest Budget deficit in the G20. If we do not address that, there will be economic ruin for this country, so we are addressing it. The reduction in the public sector head-count will take place over four years. This economy created 200,000 jobs in the last three months and part of the head-count reduction will happen through turnover. The last time I checked, Labour were still committed to eliminating the structural deficit—they just would have taken longer over it—so the job losses and the head-count reduction would have been prolonged. I do not think that is right for this country.
Mr Robert Buckland (South Swindon) (Con)
As a fellow one-nation Conservative, does my right hon. Friend agree that today’s announcement has been driven not by some ideological crusade, as the Labour party has suggested, but by a genuine desire to spend more Government revenue on public services and less on servicing Labour’s debt?
Mr Osborne
My hon. Friend is absolutely right. Of course, we have made choices today. First, we have chosen to seek to reduce debt interest by going faster than the Labour party would have done. I think it is better to spend the money here rather than to give it to our foreign creditors. Secondly, we have chosen to put particular emphasis on trying to reduce the welfare bills. That has enabled us to increase investment in the NHS, schools and early-years provision, which we were discussing earlier. That is true to the values of one-nation conservatism and to the values of this coalition.
Barry Gardiner (Brent North) (Lab)
I welcome the Chancellor’s decision to honour the previous Government’s commitment to contribute 0.7% of gross domestic product to international development, but I would like absolute transparency on this. How much of the money that was previously allocated in the Defence and Foreign and Commonwealth Office budgets is now going to be covered by the Department for International Development’s budget?
Mr Osborne
Let me make two points. First, there is an increase of almost £4 billion in the DFID budget. Secondly, having a tri-departmental fund for DFID, the Ministry of Defence and the Foreign Office will help with conflict and supporting post-conflict stabilisation. It will grow from £229 million this year to £309 million in 2014-15—a growth of just short of £100 million. That will help us to avoid having to come into emergency situations, but it is, of course, pretty small given the scale of the increase that I have just announced in DFID’s budget.
Mr Speaker
Order. I am sorry to disappoint colleagues, but we have had a marathon session. I am grateful to the Chancellor and colleagues for their co-operation, but we must move on.
Points of Order
(13 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Thomas Docherty (Dunfermline and West Fife) (Lab)
On a point of order, Mr Speaker. You have been very generous in the amount of time that you have given today, but many Members on both sides of the House did not have copies of the Chancellor’s statement after he sat down. It seems that the Vote Office did not have sufficient papers or that the Treasury did not give it enough. Could you ensure that in future the Chancellor makes sure that the Vote Office is given ample copies of such statements so that hon. Members can scrutinise them?
Mr Speaker
The point is noted by the Chair and I feel sure that it will be noted by those on the Treasury Bench. We are doubly grateful to the hon. Gentleman.
Mr David Anderson (Blaydon) (Lab)
On a point of order, Mr Speaker. In response to my question in Prime Minister’s questions, the Prime Minister said that I mentioned the British Chambers of Commerce, but I did not. I referred specifically to a report from the North East chamber of commerce, which said that 17,000 jobs in the construction industry were at risk. I am the first to admit that my accent is not always the easiest to understand, but I am also sure that the Prime Minister was not misleading the House. Can you advise me on how this matter can be corrected?
Mr Speaker
The hon. Gentleman has just corrected it very successfully. I do not want to be personal, but let me say to him that I have never found the slightest difficulty in understanding what he has had to say. I hope that he is grateful for that.
Mr Speaker
We are always grateful for the quick-wittedness of the hon. Member for Rhondda, bestriding the Opposition Front Bench.
We come now to the ten-minute rule motion, for which the proposer has been very patiently waiting.
Police Terms and Conditions of Service (Redundancy)
(13 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mark Reckless (Rochester and Strood) (Con)
I beg to move,
That leave be given to bring in a Bill to make provision for police officers to be offered, or be made subject to, terms of redundancy; to set out the circumstances in which such redundancies can be made; and for connected purposes.
I should first declare an interest as a member of the Kent police authority. In that role, working with Kent’s chief constable, I will have to help to make the savings the Chancellor has just announced. I should also emphasise that I speak as a friend and supporter of the police. I pay tribute to their service and the fact that, almost alone among the public servants affected by today’s announcement, they forswear the right to strike.
In Kent, we are fortunate to have a chief constable who sees lower spending as an opportunity to deliver a new and more efficient way of policing Kent and to keep crime coming down. As we make cuts in the central grant—these might be higher than the overall figure of 4% per year that we have just heard—it is essential to allow police forces and authorities to decide how best to police their areas with the money they have. Unfortunately, the law does not currently give them that freedom, so we are asking chief constables to make cuts with one hand tied behind their back. That is because, historically, the police enjoy a unique status under the common law as constables who exercise discretion under the Crown. A senior police officer cannot order a constable to make an arrest; the constable must decide for himself. On that basis, the courts have traditionally held that the law of master and servant does not apply to the police. That law has evolved into the modern statute-based employment law that we have today, but, extraordinarily, the police still remain outside its scope. As no one employs the police, no one can make them redundant. A police officer is appointed subject to two years’ probation, but after that, unless they are found guilty of gross misconduct, their appointment as a police officer simply continues until they retire—generally after 30 years. It makes France look like a flexible labour market.
Hon. Members might ask how cuts will be made in police budgets. The answer is that they will be concentrated on cheaper civilians. On average, police forces are made up of about 60% police officers and 40% civilians, but as forces have set out projected plans for reductions, they have had no choice but to target civilian staff disproportionately. Strathclyde police say that they plan to lose 200 officers and 600 civilians, and Cambridgeshire police say that they plan to lose 470 officers and 550 civilians. In my own force, Kent, our chief constable had suggested cuts of 500 officers and 1,000 civilians.
Those civilians are employed in a range of roles—from call handlers to crime investigators to police community support officers—which are clearly on the front line of policing. Forces often use civilians for specialist roles that do not need fully warranted officers who have had costly training across all aspects of policing. That allows police forces to concentrate those officers where the public want them most. We want the police to do that, but unless we change the law, we risk forcing police officers off the streets and into back-office roles that are now done by police staff, because we let police authorities make their civilian employees redundant but make them pay police officers until they retire, whether or not they are needed and irrespective of performance.
The only flexibility—I use that word advisedly—that police forces and authorities have in respect of police officers is to force them to retire under regulations 19 and 20. Under regulation 19, police officers can be required to retire when they have reached pensionable service, which is generally after 30 years. Meanwhile, regulation 20 states that a police authority may require a police officer to retire
“if he is permanently disabled for the performance of his duty”.
But I must tell the House that, when in Kent one of our officers is injured while protecting the public and is perfectly capable of doing a good desk job, we would like to look after them, not force them to retire simply because they are the only type of officer to whom we can do that.
I am not sure whether those regulations will in any event survive what I suspect will be a wave of litigation that their use will soon engender, but I want to introduce the Bill because I believe that hon. Members should make that decision in the House. If we are to require police forces and authorities to make significant savings, we should allow them to do that in a way that makes most sense for local policing. We should certainly not force them to do it by targeting civilians, the old and the disabled.
I ask hon. Members for permission to introduce the Bill, since today we are telling our local police forces that they must make savings; we should also give them the freedom to decide how that is done.
Question put and agreed to.
Ordered,
That Mark Reckless, Mr Aidan Burley, Kwasi Kwarteng, Lorraine Fullbrook, Amber Rudd, Priti Patel, Mr Robert Buckland, Mr David Ruffley, Mr Douglas Carswell, Fiona Bruce, Mr Philip Hollobone and Mr Christopher Chope present the Bill.
Mark Reckless accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 14 October, and to be printed (Bill 81).
Parliamentary Voting System and Constituencies Bill
(13 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
15:50 - The Committee divided: - Ayes: 232 / Noes: 326 - Question accordingly negatived.
16:05 - divided: - Ayes: 237 / Noes: 319 - Question accordingly negatived.
16:20 - divided: - Ayes: 231 / Noes: 328 - Question accordingly negatived.
16:58 - divided: - Ayes: 231 / Noes: 308 - Question accordingly negatived.
17:15 - divided: - Ayes: 311 / Noes: 225 - Question accordingly agreed to.
21:00 - The Committee divided: - Ayes: 212 / Noes: 325 - Question accordingly negatived.
21:15 - The Committee divided: - Ayes: 322 / Noes: 167 - Question accordingly agreed to.
21:30 - The Committee having divided: - Ayes: 317 / Noes: 133 - Question accordingly agreed to.
21:47 - The Committee having divided: - Ayes: 305 / Noes: 114 - Question accordingly agreed to.
The Second Deputy Chairman of Ways and Means (Dawn Primarolo)
I remind the Committee that with this we are taking the following:
Amendment 341, page 6, line 35, leave out ‘2013’ and insert ‘2018’.
Amendment 342, page 6, line 36, leave out ‘fifth’ and insert ‘tenth’.
Amendment 38, page 6, line 36, at end insert—
‘(3A) After subsection (2) there is inserted—
“(2AA) The boundary review due to be completed by the date set out in subsection (2)(a) above shall not begin until both Houses of Parliament have approved a report from the Electoral Commission certifying that in its opinion sufficient measures have been taken to provide for the registration of eligible voters.”.’.
Amendment 70, in clause 9, page 7, line 32, at end insert—
‘(1A) This rule is subject to an independent assessment of the Boundary Commission as to the potential electorate within any area where the Commission, having consulted—
(a) the Electoral Commission,
(b) the Registration Officer of the local authority or authorities in that area,
(c) such other organisations and individuals whom the Boundary Commission may choose to consult,
determine that the difference between the registered electorate and the assessed numbers eligible to be registered is so significant as to give rise to concern about the number of people to be served within such constituencies as would otherwise be created by rule 2(1) above.’.
Amendment 125, page 10, line 2, leave out from ‘persons’ to end of line 6 and insert
‘who are estimated by the Office of National Statistics to be eligible to vote in United Kingdom parliamentary elections, whether or not they are so registered to vote.’.
Amendment 135, in clause 16, page 13, line 5, at end insert
‘with the exception of Part 2, which will not come into force until—
(a) after the referendum on the determination of powers devolved to the National Assembly for Wales under the terms of the Government of Wales Act 2006; and
(b) the Electoral Commission has reported to the House of Commons, that over 95% of eligible voters in each local authority area are estimated to be on the electoral register.’.
The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)
I welcome you back to the Chair, Ms Primarolo, and to the consideration of clause 8. I am delighted that we can continue debating amendment 127. Of course, we would not have been able to do this if the Opposition’s attempt to prevent us from doing so, when we dealt with the timetable motion yesterday, had succeeded. When I was last speaking to this group of amendments, we were having a brief exchange on the matter of Wales. I do not want to continue that exchange, because we need the opportunity to discuss the much more important issues relating to Wales and the other parts of the United Kingdom under clause 9, which I hope we will reach shortly.
I was also considering the amendments proposed by the hon. Member for Rhondda (Chris Bryant). One of the great advantages of having an overnight break is that we can look back at the Official Report and read what the protagonists have said. I looked back through the report of the 50 minutes that the hon. Gentleman took in proposing his amendments and found that he did not, as I had suspected, mention them once during those 50 minutes. We know not from him what the content of the amendments is. So I propose to move on from the hon. Gentleman to the right hon. and hon. Members who contributed something positive to the debate.
Much of what we heard was about registration and the fact—it is a fact—that many people do not appear on the electoral register. The hon. Member for Blackley and Broughton (Graham Stringer)—I am glad to see him in his place—made clear his view on that, and said, I think, that we were moving to a system whereby 3.5 million people are not on the register. I disagree with him about that. We are not moving to a system whereby 3.5 million people are not on the register; we are already at that stage, and have been for a very long time. The disgrace is that we have been so unsuccessful in dealing with the parts of the country where registration is insufficient.
My hon. Friend the Member for St Ives (Andrew George) set out some of the reasons why we will never achieve 100% registration, given the difficulties involved. He is absolutely right, and I do not disagree with his analysis in any way. That is why the Government are introducing proposals at least to help the process and get as many people as possible on to the register.
The difficulties that we have with the amendments fall into two groups. They would change the basis on which boundary reviews are effected, moving away from the number of registered electors to some other basis, whether an estimate of eligible electors or an estimate of population. Alternatively, they suggest that we delay the process and make it longer, by a variety of mechanisms. I do not believe that that is the right way forward. The proper course of action is to ensure that the register is as accurate as possible. As I have said, the Government are taking action to improve the registration system.
Amendment 125 would require the boundary commissions to use an estimate of eligible electors, to be provided by the Office for National Statistics. The ONS does not at present make any estimate of eligible electors. Census data are available, but a census is carried out only once a decade, does not cover eligibility to vote and may contain inaccuracies. Indeed, in evidence to the Political and Constitutional Reform Committee, the secretary of the Boundary Commission for Scotland said that there would be “significant practical problems” with using population rather than registered electorate for the purposes of the boundary review. It was mentioned that the electoral register is published annually, whereas the census, which does not record whether a person is eligible to vote, is published every 10 years.
Delaying the boundary reviews would simply make the information on which they are based more inaccurate. The general election held last May was based on electoral registration data 10 years out of date. That cannot be right, and that is my difficulty with amendments 341 and 342, tabled by my hon. Friend the Member for Leeds North West (Greg Mulholland). Those amendments would not only delay the initial review, but halve the frequency of such reviews, by requiring the boundary commissions to report before 1 October 2018, instead of 2013, and every 10th year after that, instead of every fifth year. That would simply make an unacceptable situation worse.
The Government’s proposals build on the existing arrangements for boundary reviews, which have been based on the electoral register for decades. It is right that we take action in support of complete and accurate registers, and the Government are taking that action. On that basis, I urge right hon. and hon. Members not to press their amendments.
Chris Bryant (Rhondda) (Lab)
We have had 51 speakers—or rather, 52, counting the Deputy Leader of the House, who has just spoken. Despite his rather petulant and “ad hominate” speech last night, we have none the less had a good debate. He did, however, correctly excoriate me for not fully adumbrating the amendments that we tabled. That was partly because I took 31 interventions, more than half of which were from Government Members, but perhaps it would be of assistance if I were now to explain precisely why our two amendments are important.
The Deputy Leader of the House was quite right last night to say that our two amendments, 127 and 135, which refer to different parts of the Bill, are not necessarily readily comprehensible at first sight—partly because one refers to clause 8 and the other to clause 16. Both appear at different points in the amendment paper. Consequently, Members will have to turn to pages 429 and 445 to find them.
Amendment 127 would include in clause 8 the words
“within twelve months of part 2 of the…Act…coming into force in accordance with section 16(2) thereof’.”
In other words, the Boundary Commission would produce its report within 12 months of an addition to clause 16(2), which we would insert through amendment 135, stating,
“after the referendum on the determination of powers devolved to the National Assembly for Wales under the terms of the Government of Wales Act 2006”.
The Deputy Leader of the House rightly told me off last night for not explaining precisely why we believe that that is important. As I tried to say in yesterday’s debate, historically, we have constructed Parliament in this country by determination according to the four different constituent parts of the Union. That has included the representation that each part requires in order for the Union to be solid and hold together, which is precisely what happened in the 1536 Act of Union, the 1707 Act of Union and the 1801 Act of Union. With all three, the first thing determined was how much representation there should be from Wales, Scotland and Ireland. Obviously, that was subsequently changed with the creation of the Irish Free State.
The further change to Scottish representation occurred when we introduced devolution, so, following the Scotland Act 1998, it was agreed that because a variety of powers would be given to the Scottish Parliament, it was right and proper for the number of seats that Scotland accounted for in the Westminster Parliament to be reduced.
The first referendum in Wales on devolution brought about the creation of the National Assembly for Wales, which does not have law-making powers or enjoy any powers over crime, justice or policing, so it is a somewhat different body from the Scottish Parliament. However, there is a proposition that follows on from the Wales Act 2006, and it will be tested in a referendum, which the Government have said will take place in the first quarter of next year, but for which as yet no date has been set. The Welsh Assembly Government have requested that it should be on 3 March, but the Secretary of State for Wales has not yet assented to that. We do not know whether a date has been agreed or whether the referendum will proceed. The date of 3 March may well be problematic, as—how can I put it?—it sometimes rains in Wales in March. Sometimes we have fairly excessive conditions in large parts of Wales at the beginning of March, so the date may well end up being inappropriate.
However, be that as it may, we need to be assured of what powers the Welsh Assembly will have if we are then to have a coherent Union-based understanding of how much representation there should be from Wales in the Parliament of the United Kingdom of Great Britain and Northern Ireland. That is why we have tabled the two amendments, and I shall press them to a Division, because I have not heard anything from the Deputy Leader of the House to alter my opinion that we should proceed on a Union-based understanding of how we create this House, not on a purely mathematically based assumption.
Mark Durkan (Foyle) (SDLP)
Further to that point, does my hon. Friend recognise that because of the arithmetical formula, the Bill will ensure not just that boundaries will change every five years, but that the number of seats allocated to each Boundary Commission could change? The number of seats in Northern Ireland could go up in one review and down in another, and that in turn would affect the seats in the Northern Ireland Assembly, because the constituencies of the Assembly and of Parliament are absolutely coterminous. The proposal will create havoc.
Chris Bryant
The seats in the Welsh Assembly are coterminous with those for this Parliament at the moment, although there is a provision later in the Bill to change that through decoupling. That is something that we must analyse. My hon. Friend is right that there may be a change in the number of seats between each segment. If there is a boundary review every five years, there might well be a change in the number of seats, and in the end I am not sure whether that is likely to lead to a more stable constitutional settlement between the four constituent parts of the Union.
There are those who like to think that there is just the Union, not any constituent parts, and there are those who want to think that there are just the constituent parts—which should not be constituent parts but independent. However, I believe that they are constituent parts of the whole, and I say gently to Ministers that the way in which they are proceeding in relation to some parts of the Union is not likely to aid the Unionist cause. It will be detrimental.
We do not say that the provision in our amendments should be introduced solely if the referendum is successful in granting further powers to the Assembly.
Mr Robert Syms (Poole) (Con)
To be entirely clear, is it Labour party policy that England be under-represented in this House?
Chris Bryant
No, it is not Labour party policy that anywhere be under-represented. We believe, as I said yesterday evening, that it is important to achieve greater equalisation of the number of voters in each electorate, but that should not be a purely mathematical exercise. Where there are overriding concerns, those should be brought into play. Indeed, the Government agree to some degree, because they have created a degree of exception for Northern Ireland and a completely different set of exemptions for two seats in Scotland, which, according to the Government’s interpretation of the situation—and, I presume therefore, the hon. Gentleman’s—will effectively create two rotten boroughs in Scotland. We think that if we are going to make exemptions, we should make a broader set of exemptions, rather than just those two.
Mark Tami (Alyn and Deeside) (Lab)
To correct not only my hon. Friend but myself, I should say that I am reliably informed that three seats are involved. There is another seat; there is a rule that applies only to that seat on geographical grounds. That does not apply in Wales, where, as I am sure my hon. Friend will agree, a seat could well stretch from one side to the other if the population density was low.
Chris Bryant
My hon. Friend is right to correct me. I accept the admonition that three seats are being created in this way. I do not think it inappropriate for those seats to exist. But the logic of the Government’s argument—that there should be complete mathematical purity—leads one to suppose that they can only think that they are creating three rotten boroughs.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
I detected a form of back-pedalling in the hon. Gentleman’s answer to the hon. Member for Alyn and Deeside (Mark Tami). I assume that he is not saying that Labour’s policy is that the islands of Scotland are rotten in some way.
Chris Bryant
No. The hon. Gentleman knows that personally I have a great affection for the islands; indeed, many of my ancestors came from Lewis. But that is not the point. I am not trying to say that Scotland is in any shape rotten; I am merely trying to say that there is an illogicality in the argument that the Government are presenting. They are trying to say that we should have mathematical purity everywhere—except where we should not have it. I am trying to say that we should strive towards broad equality of representation in each of the seats. However, other considerations need to be brought to mind, and that should apply not only to the seats that I mentioned, but to some others as well.
Mr MacNeil
I want some clarification. Does the hon. Gentleman agree with the sensible exceptions that have been made for Na h-Eileanan an Iar and Orkney and Shetland? Yes or no?
Chris Bryant
Yes, I do. As the hon. Gentleman knows perfectly well, we have tabled amendments that would include his seat, but also include others. He is a sage man and I know that he would want to pursue the logic of the creation of his own seat so as to make exactly the same exemptions in some other cases where there are overriding concerns—in the Isle of Wight, for instance. That is the nature of the amendment that we have tabled elsewhere.
Naomi Long (Belfast East) (Alliance)
Could we put it this way? Given that the Government have already conceded that there are exceptions to the numerical rule, would it not be better to give the judgment to the Boundary Commission, which could not be perceived to have any vested interest? It could make the judgment on where exceptions should and should not apply, rather than the Government laying that out in the Bill.
Chris Bryant
The hon. Lady speaks with almost as much sagacity as the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). I agree with her that there is no logic to how the exceptions have been laid out. The Boundary Commissions should be given a certain latitude while striving towards a greater equalisation of the number of electors in each constituency.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
Does my hon. Friend find it surprising that the Bill comes from a party that is meant to be committed to the Union and that that party’s parliamentary colleagues will be involving themselves in the destruction of the historic Duchy of Cornwall along the same lines?
Chris Bryant
My hon. and historical Friend is absolutely right. That adds to my argument, and to arguments that I shall hope to adduce later. As I said, there need to be some exemptions where there are overriding geographical, political or cultural issues that need to be resolved.
One of the overriding political issues is the bonding together of the Union, which historically has taken into consideration the existing political structures in Wales, Northern Ireland and Scotland. That is why we have tabled amendments 127 and 135, which would mean that the Boundary Commission would not be able to proceed until the referendum had happened in Wales. In that way, we would know that there was a settled view about what powers the National Assembly for Wales would have.
There are other amendments in this group. In particular, the hon. Member for Leeds North West (Greg Mulholland) has tabled amendments 341 and 342, either of which I would be happy to support; I very much hope that he will press one of them to a Division.
The hon. Gentleman made an important point in his contribution to the debate when he said that we have only just had a boundary review and we are to have another by 2013, which seems rather a fruitless exercise. He is absolutely right; it would be better if we did things on a longer time scale, and towards 2018. That point relates to his amendment 341. His amendment 342 would mean that instead of having reviews every five years, we should have them every 10 years. I say to hon. Members who are hard and fast in their view that we should have a full boundary review, every five years, on the basis of purely mathematical, arithmetical equations, that that would put every single parliamentary seat in doubt every single time. It may not be that every single one is changed every time, but a large number probably would be. The danger is that that gives rise to a conflict when an hon. Member knows the seat that they will be fighting at the next general election and they want to get in touch with the voters in that seat not as an MP but as a candidate. That is likely to lead to a considerable number of unfortunate circumstances in the way that Parliament behaves. It was difficult enough in the last general election, when the Speaker and the courts had to intervene in two cases in London where boundaries had been redrawn and MPs wished to be able to correspond not as an MP but as a candidate, and the sitting MP objected to that intervention.
Phil Wilson (Sedgefield) (Lab)
Does the shadow Minister agree that over, say, a 20-year period of four Parliaments one community could find itself in four different constituencies and have four different MPs, not because an MP is deposed but because the constituency boundaries are being changed to ensure that all the arithmetical figures stack up? That breaks the strong and important link between the constituency MP and the local electorate.
Chris Bryant
Absolutely. Particularly in many rural areas where the difference between reaching the mathematical perfect number and not reaching it might be 1,500 or 3,000 votes, a medium-sized village or small town might have to be divided in half, or a river might run across the constituency and new polling districts might have to be created. A whole series of different issues might mean that the individual voter ultimately ends up being less confident about knowing who their political representative is.
The hon. Member for Epping Forest (Mrs Laing), who knows that I have a great respect for her—I waited until she took her seat before referring to her—made several points, one of which related to the fact that we should not be redrawing the seats for our own convenience. She is absolutely right. We should, however, ensure that the political boundaries for constituencies are for the convenience of our electors. Our electors do not think in terms of lines on a map but in terms of political communities, cultural connections and social connections, and where the roads go and do not go. If one is to bind together little bits of geography just because they sort out a perfect map according to mathematical excellence, one might assist the convenience of the Boundary Commission, but one will not necessarily assist the convenience of voters, who want to know and understand who their Member of Parliament is—and it is better that they do. I know that there are split wards, but it would be better if there were not.
Geraint Davies (Swansea West) (Lab/Co-op)
My hon. Friend suggested that there would be changes every five years but that that might not affect every constituency. Does he agree that, for example, a constituency in the south that grew because of population changes and migration would necessarily have a nudging effect on contiguous boundaries and a domino effect all the way up the country, and that because it is likely that virtually every seat will change every five years during the 20-year period that my hon. Friend the Member for Sedgefield (Phil Wilson) mentioned, one’s constituency might move around the country? [Interruption.]
Chris Bryant
Members on both sides are laughing because my hon. Friend has of course moved around the country himself, so I will assist by saying that I know that the people of Wales welcome him back to his home town.
My hon. Friend is absolutely right to say that where there are significant changes in the population there will not only be effects for one constituency but potentially nudge-on effects for many others, which may move from one county council or one borough to another. In part, we have to accept this. Rhondda used to have two parliamentary seats, Rhondda East and Rhondda West, and then we moved down to one parliamentary seat because the population fell dramatically. I do not believe that the boundaries of parliamentary constituencies in Wales or anywhere else should be written in stone—of course we have to move with the population flows. However, if we move forward precisely like this, without any kind of exemption, one constituency in Wales will represent at least a third of the geographical area of Wales. That would be unacceptable. It would cover several counties, which are unitary authorities in Wales, and would include areas that are, and feel themselves to be, virtually in England, and a large part of Wales that is fiercely proud of its Welsh language heritage. That would be an inappropriate direction in which to move.
Susan Elan Jones (Clwyd South) (Lab)
Does my hon. Friend agree with what the women’s institute has written? As I am sure all hon. Members know, anyone who dares to suggest that the women’s institute is party political will have their come-uppance, but it has expressed great concern about the effect that the changes will have on rural communities, because natural geographical boundaries will be cut up.
Chris Bryant
Tony Blair learned that one should not really mess with the women’s institute, and I have no intention of doing so, but my hon. Friend is absolutely right. Large parts of her constituency are very rural, and chunks of mine are semi-rural—everybody in the Rhondda lives within about 200 metres of a farm. Surely the point is that overriding concerns must be able to trump mathematical perfection, not entirely but to a degree. The Government have already accepted that in relation to three constituencies, but it should apply more widely.
My hon. Friend the Member for Blackley and Broughton (Graham Stringer) has tabled amendment 38, which refers to registration. A lot of Members talked about under-registration yesterday afternoon, and the Deputy Leader of the House has just mentioned it. I am glad he accepts that some 3.5 million people are not on the register and should be. I make no pretence that we got it right when we were in government. Indeed, some of us—particularly one of my hon. Friends, who is probably about to intervene on me—quite rightly argued aggressively in the last Parliament that many people are under-represented on the register. The danger is that they will therefore be under-represented in Parliament and their concerns will not be taken on board.
Chris Ruane
My hon. Friend says that we did not do as much as we could have done, and I agree, but we did do some things in the past 13 years. In the Electoral Administration Act 2006, we examined what electoral registration officers were doing and measured them in 26 fields. That process was long and slow, but now we are beginning to examine what they achieved so that we can fine-tune the process. However, the current proposals are being rushed through.
We also listened to the then Opposition. When they wanted individual registration, we opposed it at first but then said that because of political balance we would introduce it. We said that it would happen in 2015 and that we would put measures in place to increase registration over the five years until then. All that bipartisanship has been shattered by the governing parties for party political gain and to pursue a little English coup.
The Temporary Chair (Mr Jim Hood)
Order. I think that intervention was a bit long.
Chris Bryant
But it was very good, Mr Hood, and spot on. I hope that some coalition Members accept that when we were in government, we tried to co-operate on electoral registration. When the hon. Member for Epping Forest spoke for her party on the matter, she did so very effectively and we tried to co-operate and reach agreement when we could. We agreed that we would move towards individual registration, but I am concerned that the new Government’s message about registration is, “Yes, we want everybody to register, but it doesn’t really matter if you don’t. We’re going to get rid of the fine for somebody who does not send in their form, and registering is almost entirely optional.” That is a shame, because as I tried to say in a debate that the hon. Lady secured in Westminster Hall earlier today, we sometimes take our democracy for granted all too easily.
Tristram Hunt
My hon. Friend is right to point to the Bill’s partisan nature. Did he hear anything from the Chancellor about allocating extra resources to increasing electoral registration in December, or perhaps for the wonderful democracy festival that the hon. Member for Bermondsey and Old Southwark (Simon Hughes) talked about?
Chris Bryant
No—I heard exactly the opposite. I think that there was a reference to a 7% cut in local authority funding every year for the next four years. My concern is that, because all too often we take democracy for granted, when local councillors have to decide whether to spend £100,000 on keeping a swimming pool open or on a really good door-to-door canvas to ensure that everybody is registered, they tend to keep the swimming pool open. Although I fully understand such decisions, which will be difficult for many councillors in the next four years, unless one values democracy and spends money on it, one does not get a proper representative democracy. That is why Labour Members believe that amendment 38 is important. Unless the Electoral Commission is satisfied that there is proper registration and that proper measures are being taken to ensure full registration of all eligible voters in this country—and for dealing with those who are on the register but should not be—the Boundary Commission should not be able to produce its report.
My hon. Friend the Member for Swansea West (Geraint Davies) tabled amendment 125, which refers to the census. Earlier, the Deputy Leader of the House said that he did not agree with the amendment because the census happened every 10 years, which might have led one to believe that there would not be one for 10 years, but of course, one will be held next year. The information may not be available immediately, but surely it would be bizarre if we found that the number of those eligible to vote in individual areas of the country was dramatically higher than those registered to vote, and that those areas were significantly unfairly under-represented in the House because the Government chose to proceed on only one element.
Geraint Davies
My amendment would provide for the Office for National Statistics to conduct an assessment of the number of eligible voters. It would use the register of voters alongside the census and other data sources to get the best estimate. It might not be perfect, but it would be better than the current suggestion.
Chris Bryant
Precisely. That is one of the things that the Boundary Commission should consider.
One other issue was mentioned in yesterday’s debate. I am sorry to refer to the hon. Member for Epping Forest for a third time, but she got rather cross with me in yesterday evening’s debate, so I merely wish to respond to one of her comments. She said that the point about the number of Members of Parliament in a particular area and the casework that they took on was not a matter of substance. Various hon. Friends suggested that some of those who are not eligible to vote often provide much of the casework in a constituency. Consequently, there is an argument about the role of the Member of Parliament, which should be considered before reaching the precise matter of how the boundaries are drawn. The hon. Lady said that it would be good if we reduced the number of Members of Parliament and achieved equalisation of the electorate in each constituency, and that if a problem remained with casework, we could give Members of Parliament more staff. [Interruption.] I think that the hon. Member for Brecon and Radnorshire (Roger Williams) says, “Hear, hear” because he wants more staff to work for him.
I am concerned about the hon. Lady’s view because the role of a Member of Parliament has completely changed since the days of Stafford Cripps, and casework is an essential part of the job. Simply hiving it off to a member of staff, without the Member of Parliament’s being directly involved, distances Members of Parliament from the real life that goes on around them. Simply replacing Members of Parliament with paid staff is not the right route.
I am keen to press our amendments to a Division. I hope that hon. Members will agree that mathematical excellence is not the only way in which one should proceed towards creating new boundaries for the House of Commons, and that other considerations need to be borne in mind. I hope that I can rely on the Committee’s good sense.
Graham Stringer (Blackley and Broughton) (Lab)
On a point of order, Mr Hood. I should like to press amendment 38 to a Division. What is the appropriate time to move it, if I am allowed so to do?
The Temporary Chair (Mr Jim Hood)
Now that the hon. Gentleman has given notice that he wishes to press his amendment to a Division, I will invite him formerly to move it when the Division on amendment 127 is over.
Chris Bryant
Further to that point of order, Mr Hood. Does that also apply to amendment 341 or 342?
The Temporary Chair
Yes, certainly.
Question put, That the amendment be made.
Mrs Eleanor Laing (Epping Forest) (Con)
I beg to move amendment 234, page 7, line 17, at end insert—
‘(5AA) The draft of an Order in Council laid under subsection (5A) above may only give effect to the recommendations contained in all four reports under subsection (1) above with modifications, where those modifications have been made with the agreement of the Boundary Commissions.’.
This amendment has been tabled in the names of members of the Select Committee on Political and Constitutional Reform. The Chairman of the Select Committee, the hon. Member for Nottingham North (Mr Allen), is sadly unable to be in here this afternoon and so I have undertaken to move the amendment on behalf of his Committee.
The Select Committee, as the Committee well knows, carried out a necessarily brief and swift but in-depth consideration of the Bill. In order to try to be helpful to the House and the Minister, we tabled several amendments that we believed ought to be considered and that we hope will improve the Bill. The purpose of amendment 234 is to reflect paragraph 139 of the Select Committee’s recently published report, which states that
“the power of the Executive to depart from the recommendations of an independent statutory body should have clear statutory limits to prevent abuse for partisan advantage.”
I am sure the Committee will agree that that is a matter that ought to be drawn to the attention of the Minister and of hon. Members.
I ask the Minister where the justification lies for the Government’s retaining such a wide-ranging power to depart from the Boundary Commissions’ recommendations. Although I would assert that I have every confidence—as does the Select Committee—that the current Government would always act in this matter in an honourable, straightforward and democratic way, may I nevertheless ask the Minister on behalf of the Select Committee what safeguards exist against any future Government’s misusing such a power to their partisan advantage. It would be helpful if the Minister would consider those questions, and I am sure that the Committee will be eager to know the answers.
Chris Bryant
First, let me briefly comment on the fact that before you took the Chair, Mr Hoyle, we had a former miner in the Chair and two Tellers who were also former miners, so, as the MP for the Rhondda I felt quite at home. But that has absolutely nothing to do with the amendment, I am afraid.
The amendment has been charmingly moved by the hon. Member for Epping Forest (Mrs Laing), who is absolutely right. This is an issue that I have tried to raise on several occasions—
The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)
Not so charmingly.
Chris Bryant
The Minister says that not so charmingly himself, so the favour goes back to him.
Under the clause, new subsection (5A) would read:
“As soon as may be after the submission of all four reports under subsection (1) above that are required by subsection (2) above to be submitted before a particular date, the Secretary of State shall lay before Parliament the draft of an Order in Council for giving effect, with or without modifications, to the recommendations contained in them.”
So the Boundary Commission will bring forth its report, there will be no public inquiry and the Minister will then bring forward the boundaries with or without modifications. It is the phrase “with or without modifications” that I have difficulty with, and clearly the Select Committee does too.
The hon. Lady mentioned that her Committee had to do its business very swiftly. Indeed, I think it had only five days in which to undertake a whole inquiry. That is one reason why I believe the Bill is being taken through with undue haste. A substantial number of amendments have been tabled and will be considered on Monday, but we already know that some of them are inaccurate and will be modified when the Government bring forward territorial statutory instruments in relation to Wales, Northern Ireland and Scotland. I very much hope that the Minister will enlighten us as to whether those statutory instruments will be subject to the affirmative or negative procedure. [Interruption.] That is not what will happen on Monday because the measures are not going to be debated next Monday at all, contrary to what the Deputy Leader of the House has just said from a sedentary position.
The Government believe that we should retain in present legislation the phrase “with or without modifications”. That is a pretty broad power.
Mr Syms
With previous boundary reviews, there have sometimes been attempts at judicial review of elements of what the Boundary Commission has done. Most of them have been rejected, but we have to consider that that is a possibility and that minor modification might be required—or does the hon. Gentleman think that will not happen?
Chris Bryant
The hon. Gentleman makes an important point about the due process that needs to be gone through. I believe that we need a due process in relation to the Boundary Commission, because it might proceed incorrectly according to the rules that are laid down for it, it might proceed in a partisan manner or it might not consider all the factors that need to be considered. That is why we have heretofore always had a system of public inquiry, and not just written reports being sent in. That is essential for there to be utter confidence in the process that the commission goes through. He is absolutely right that there is also, sometimes, a process of judicial review. I suspect that if the Government push through the Bill in the partisan way that they are doing, without any provision for public inquiry, the likelihood of a judicial review being sought in many constituencies in the land will be very high indeed.
The hon. Gentleman might say that that is a good reason why the Minister needs even more power to draw constituency boundaries as he thinks fit. Unless the Government can be shifted from this view—whether that happens in this House or in the other House—we shall almost inexorably end up with no due process, other than the recourse that people might have to the courts.
The Minister will probably tell us that the Government need this power because apostrophes and commas are sometimes put in the wrong place and there are inadvertent errors. That is why the amendment, which was tabled by several members of the Political and Constitutional Reform Committee, is perfect: it simply says that the Minister, if he or she wishes to make any modification, must return to the Boundary Commission and ask, “Are you okay with this amendment?” If Ministers were in a conciliatory, cross-party mood, they would accept the amendment.
I fully understand that the precise wording they propose is that of the current legislation. That is fine when due process can go on after the boundary commissions have done their work—for example, public inquiries, where the public can have their say on the boundary commissions’ proposals. Where that does not happen—that is the intention of the Bill, although it is something that we shall return to later—it is important that there is a bind on Ministers, so that they are not entirely free to dream up any kind of modification that they might want; otherwise, strictly speaking in law, I guess that Ministers would be perfectly at liberty, if they felt that the boundary commission had got something slightly wrong and representations were made to Ministers, to make such modifications as they thought fit.
Thomas Docherty (Dunfermline and West Fife) (Lab)
I do not know whether my hon. Friend is familiar with the situation in the United States, where there is no boundary commission and state legislators draw up in a partisan, political way each state’s congressional districts. Does he agree that we are starting down a slippery slope and that we will end up with a partisan political set of redistricting—to use the American phrase—if the boundary commission’s authority is not protected?
Chris Bryant
That will happen not just if we do not have the boundary commission’s public inquiry process, but if this element of the Bill remains without the amendment. My hon. Friend is absolutely right. In the United States of America, because there is a redrawing each time, there are many instances where the incumbents effectively draw boundaries to protect themselves. Therefore, two Hispanic communities that might be thought to vote Democrat could be linked, because boundaries must be contiguous, by a single side of a road, thus creating bizarrely shaped constituencies. That is why, as I am sure hon. Members know, one of the congressional districts in Massachusetts that was drawn up by Governor Elbridge Gerry in the 19th century was shaped like a salamander—hence the term “gerrymander”. In fact, it looked more like an eagle than a salamander.
This provision, as constructed in the Bill, will specifically allow Ministers to gerrymander. It is entirely partisan. It will allow Ministers—indeed, it encourages them—to be partisan. [Interruption.] The Parliamentary Secretary, Cabinet Office, the hon. Member for Forest of Dean (Mr Harper), says from a sedentary position what I have already said. He says, “We aren’t changing anything.” He says, as I have said, that the provision is in the existing legislation—it is—but if he would just listen to the end of the paragraph, he would understand and learn that, in fact, the difference between the legislation that he is advancing and the existing legislation is that he will allow no due process. There will be no public inquiries. Consequently, I do not think that the electorate will have confidence in the way the commission draws up boundaries and, thereafter, in the way that Ministers are allowed by their legislation to make such modifications as they see fit.
The Minister may be able to satisfy my concerns by saying that there is legal provision to prevent a member of the Government from doing anything that the Boundary Commission disagrees with, but I do not think he will be able to, because I cannot see where the Bill or any Act makes such a provision. That is why we wholeheartedly support the amendment presented by the hon. Member for Epping Forest. We believe intrinsically that it is one of the most important amendments to the Bill, and I do not know whether she intends to press it to a Division, but if she does not we certainly shall.
Sheila Gilmore (Edinburgh East) (Lab)
As a member of the Political and Constitutional Reform Committee, I am disappointed to find that a measure with cross-party support on the Committee—we all agreed to it—has not been accepted as a good piece of advice on amending a Bill which did not have the pre-legislative scrutiny that might have incorporated such a provision in the first place. Indeed, that is why we have such bodies as Select Committees. They exist to ensure, in an atmosphere that is not adversarial, a greater depth of debate than has been possible even in our debates on the Bill over the past couple of days and today. All Select Committee members felt that, as a safeguard, the amendment was a reasonable way to progress, and, if Ministers have no intention of making unreasonable modifications, they have nothing to lose from accepting such a provision.
The hon. Member for Epping Forest (Mrs Laing) said that she had no concerns about her Government using such powers. We might think differently, but equally she might think differently if there were a change of Government. From the perspective of our discussions in the Committee, the measure simply represented a safeguard that accounts for the fact that the whole procedure has changed. We know that the provision in the Bill is very similar, so we are not ignoring it, but the amendment was agreed to in the wider context of a debate about how we carry out such boundary changes, and the fact that public inquiries will not take place. We wanted to ensure that things could not be altered at the last minute in an unsatisfactory way that cut across whatever public consultation there had been throughout the process.
With many aspects of the Bill, we have forgotten the underlying reason for wanting to legislate on the constitution. I remember the Deputy Prime Minister, when he introduced this constitutional programme, saying that he wanted to overcome the distrust in politics and the fact that people appeared to have lost faith in politics and politicians, and that he felt that the constitutional changes would improve the situation. Having listened to some of last night’s debate, I think it very important that we bear that test in mind when we consider the provision before us. We should ask ourselves, “Do these various detailed provisions improve that trust or detract from it?” The amendment would be a small and fairly technical provision that went some way to meeting that test. I commend it to the Minister and hope that it might be accepted.
Mark Durkan
The amendment would represent a very important reassurance, because the Minister would not be able to make highly arbitrary and subjective judgments on any modifications that were introduced. As my hon. Friends have pointed out, we are being asked to consider a situation in which, in every Parliament, there will be a boundary review in respect of the next Parliament. That means that in each Parliament, and in each Government, the relevant Minister will in effect have his or her hands on a boundary review. That fundamentally changes the political nature of the operation, and it might be abused. I am thinking not only of one party against another; it could be abused within a party. It could become yet another of the Whips’ weapons against recalcitrant Government Members—they could say, “Look, we can redistrict you.” That is what has happened in the United States. We find many former members of Congress who say that they were blatantly redistricted by their own parties because they did not fit or did not particularly toe the line. We have seen that happen in various states.
The arrangements provided in the Bill are pregnant with the possibility of abuse or accusations of abuse. The parliamentary process needs to be protected from that. The House has made a mistake in accepting boundary reviews every five years rather than every 10 years. That means that every Parliament will be affected and infected by the issue and the controversy around it. If Ministers want to be free from that, they should agree to the amendment.
Mr Heath
I am extremely grateful to the hon. Member for Epping Forest (Mrs Laing) for moving the amendment. I give my best wishes—and, I am sure, those of the whole Committee—to the Chairman of the Political and Constitutional Reform Committee, who would normally have been here to speak about its proposals.
We have had a short and helpful debate. The hon. Member for Rhondda (Chris Bryant) has told us about the derivation of the word “gerrymander” again; hopefully, we will hear that each day this Committee sits. It worries me when the hon. Gentleman talks about due process: the more he talks about it—and it is not the issue before us at this stage—the more I think he does not know what it means. We will come back to that later.
The hon. Member for Edinburgh East (Sheila Gilmore) assumed a position on the part of the Government without knowing what it was. I suggest to her that that is not a sensible way to go forward; that is meant to be helpful. We are grateful to her.
The hon. Member for Foyle (Mark Durkan) got the tone exactly right. There is an issue, and we understand that. The amendment would allow the Order in Council laid before Parliament to give effect to the boundary commissions’ recommendations with modifications only if the commissions were content with the changes made. As we have heard, the existing legislation does not have a restriction on modification such as that proposed by the amendment. The Bill simply preserves that power.
There is no record of that power ever having been used. There was an instance in which a Government urged Parliament to reject boundary commission proposals in toto rather than modify them, and some would suggest that that in itself was an abuse, but a Government have never urged Parliament to modify such proposals, so there is no history on the issue. However, I entirely understand the desire expressed by the Political and Constitutional Reform Committee to ensure the independence of the boundary commissions and see that their work is not modified for partisan reasons by any Government.
I say to the hon. Member for Epping Forest that the Government would like to consider the matter in more detail. There might be a situation in which, for the timely implementation of the boundary commission’s recommendations, any unintended errors in the reports would need to be corrected in the Order in Council. We would want to consider carefully how any such restriction on the power to include modifications in the Order in Council might work.
There may be a technical defect in what the Political and Constitutional Reform Committee has brought forward. That is not a criticism of its work. The amendment appears to require all four boundary commissions to agree to any modification, rather than the relevant commission or commissions for the part or parts of the United Kingdom where the modification is being made. We may have to look at how the amendment is cast.
Fiona Mactaggart (Slough) (Lab)
I did not jump into the trap that my hon. Friend the Member for Edinburgh East (Sheila Gilmore) jumped into. However, I want to intervene to say that I would feel quite differently if the hon. Gentleman gave an undertaking that if he found some technical concern about the wording, he would bring back an amendment that made sure that no changes could be made to boundaries by a Minister without the consent of the boundary commission for the relevant region.
Mr Heath
The hon. Lady has been in government so she knows the constraints within which we work.
I am very sympathetic to the views expressed in the amendment, and we will have to look at it further. That is not an attempt to fob off the hon. Member for Epping Forest or the Select Committee. It raises an important issue. I do not want there to be any circumstances in which a Government can apply a partisan consideration to a modification for a boundary commission response. I give a clear undertaking that the Government will consider the matter in detail and come back with a response in due course. I ask the hon. Lady to withdraw the amendment on the basis that we will look at the matter further and that we are grateful to the Committee for having brought it to our attention.
Mrs Laing
I thank the Minister for the serious way in which he has considered the amendment.
I appreciate the position taken by the hon. Member for Edinburgh East (Sheila Gilmore), but the Select Committee has not suggested that the proposals in the Bill avoid due process. I would argue personally, not necessarily on behalf of the Committee, that the proposals in the Bill do involve due process, but that that is not a matter which hon. Members should worry about. That is not the problem before us right now—the problem is simply whether the Government could, at some point in the future, take action without the agreement of the boundary commissions. I am pleased that the Minister has accepted that that is an issue. Every member of the Select Committee will be very pleased that its work has, at least in this respect, been seen to be worth while and contributing to improving the Bill, which was our purpose in submitting the amendment. Having heard the general arguments put this afternoon, including by the shadow Minister, I believe that it may have to be tightened up somewhat in its wording and technicalities.
I am delighted that the Minister has indicated that the Government will look in more detail at the matter and undertaken to come back to the House with it. Given that assurance, I beg to ask leave to withdraw the amendment.
Mr Heath
I beg to move amendment 162, page 7, line 22, at end insert—
‘( ) In Article 3 of the Lord President of the Council Order 2010 (S.I. 2010/1837) (which makes certain functions of the Secretary of State exercisable concurrently with the Lord President) the reference in paragraph (1) to the Parliamentary Constituencies Act 1986 is to be read as a reference to that Act as amended by this section.’.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
With this it will be convenient to discuss Government amendments 163 to 167.
Mr Heath
These are minor amendments to clarify the position on ministerial responsibilities in relation to the constituencies provisions of the Bill. Responsibility for elections law, including parliamentary constituencies, is now exercisable by the Lord President and the Secretary of State, as my right hon. Friend the Deputy Prime Minister, as Lord President of the Council, now has responsibility for political and constitutional reform. That was effected by the Lord President of the Council Order 2010, which provides that functions under various Acts, including the Parliamentary Constituencies Act 1986, are exercisable concurrently by the Lord President and the Secretary of State. In the case of that Act, “the Secretary of State” includes the Secretaries of State for Scotland, Wales and Northern Ireland, who retain functions relating to boundary commissions in their parts of the United Kingdom.
The order states that references to the 1986 Act include references to it as amended by any enactment already made but not yet in force. It is arguable that that implies that such a reference does not include a reference to that Act as amended by a subsequent enactment. The amendment therefore provides that the reference to the 1986 Act in the order is to be read as a reference to the Act as amended by the Bill.
Amendments 163 to 167 are to clause 11 on the relationship between the changes to parliamentary constituencies and the constituencies of the National Assembly for Wales. They make similar changes to those in the Lord President of the Council Order 2010, so that the clause refers to both the Secretary of State and the Lord President of the Council, and not just to the Secretary of State. That is done in the same way as in part 1 of the Bill, which provides that the Minister means the Lord President or the Secretary of State. I hope that that is perfectly clear to the Committee.
Chris Bryant
These amendments seem perfectly sensible and we have no problem with them. We hope that they will go forward immediately.
Amendment 162 agreed to.
Question put forthwith (Standing Order No. 68), That the clause, as amended, stand part of the Bill.
John Mann (Bassetlaw) (Lab)
On a point of order, Mr Hoyle. The amendments selected in this group include some that are proposing special privileges—some might say gerrymandering—for certain constituencies, and these have been ruled to be in order, while others suggesting gerrymandering, such as my own, which suggests that the traditional rotten borough of Retford should be created, as it was in 1832, have been ruled out of order. [Hon. Members: “It is not this group. It is the next group.”] Well, I am making my point now anyway. Why have some been ruled in and some ruled out, when they are all about gerrymandering the boundaries?
The Chairman of Ways and Means
I welcome your opinion, but you cannot discuss amendments that have not been selected.
Clause 9
Number and distribution of seats
Chris Bryant
I beg to move amendment 364, page 7, leave out lines 27 and 28 and insert—
‘UK Electoral quota
1 The UK Electoral Quota shall be defined as the total electorate of the United Kingdom on the designated enumeration day divided by 650.’.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
Amendment 41, page 7, line 28, leave out ‘600’ and insert
‘gradually reduced to 600 in accordance with the terms of rule 1A.
1A (1) In each periodic report submitted by a Boundary Commission under section 3(2), the overall number of constituencies in each part of the United Kingdom shall be no more than in the previous report.
(2) The Boundary Commissions shall meet at the outset of each periodic review to determine the overall number of constituencies in the United Kingdom, and the number to be allocated to each of the four parts of the United Kingdom by each Commission, in accordance with rule 8.
(3) The Boundary Commissions shall ensure that the overall number of constituencies in the United Kingdom is reduced in each succeeding periodic report to no more than 600 by 2029 in their fourth/fifth periodic reports.’.
Amendment 67, page 7, line 28, leave out ‘600’ and insert ‘585’.
Amendment 74, page 7, line 28, leave out ‘600’ and insert ‘500’.
Amendment 227, page 7, line 28, leave out ‘600’ and insert—
‘no fewer than 588 and no more than 612’.
Amendment 259, page 7, line 28, leave out ‘600’ and insert ‘650’.
Amendment 42, page 7, leave out lines 35 to 37 and insert—
‘U/T where U is the electorate of the United Kingdom minus the electorate of the constituencies mentioned in rule 6 and T is the overall number of constituencies in the United Kingdom determined by the Boundary Commissions under rule 1A above.’.
Amendment 68, page 7, line 35, leave out ‘U/598’ and insert ‘U/583’.
Amendment 75, page 7, line 35, leave out ‘U/598’ and insert ‘U/498’.
Amendment 260, page 7, line 35, leave out ‘U/598’ and insert ‘U/648’.
Amendment 228, page 9, line 40, at end insert—
‘Variation in number of constituencies
8A (8) A Boundary Commission shall have power to recommend that the number of constituencies in the relevant part of the United Kingdom should be greater or smaller than the number determined in accordance with the allocation method set out in rule 8.
(9) The number so recommended must be no less than 98 per cent. and no more than 102 per cent. of the number so determined.’.
Chris Bryant
Amendment 364 would replace the first subsection of clause 9, which states that the number of constituencies in the United Kingdom shall be 600, with the proposal:
“The UK Electoral Quota shall be defined as the total electorate of the United Kingdom on the designated enumeration day divided by 650.”
I am sure that all hon. Members will note that 650 is the present number of Members of Parliament, as opposed to the 600 that the Bill proposes. I am opposed for a series of reasons to the Government’s proposal to change the number of seats and to fix it at 600. First, they are rigging the number of seats. The 600 seats figure did not appear in any party’s manifesto. The Liberal Democrats mentioned 500 MPs in their manifesto, while the Conservatives had a manifesto commitment to reduce the number of seats by 10%, which would have taken the number down to 585. Neither of those figures is in front of us. Why might that possibly be? If those two parties were doing a deal, it would be reasonable to assume that we would end somewhere between the 500 seats mentioned in one manifesto and the 585 mentioned in the other. In fact, they have gone for a completely new figure, which seems to have been plucked out of the air.
Mr Andrew Turner (Isle of Wight) (Con)
Does the hon. Gentleman accept the possibility that the compromise arrived at might not have been one between us and the Liberals, but among us, the Liberals and the Labour minority that wanted 650 seats?
Chris Bryant
Well, I would have been absolutely delighted if any process of consultation with Labour Members had taken place on the issue of the size of Parliament. Such a process has always taken place in the past and if it had done so this time, I would have ardently supported the Bill. However, absolutely no consultation has taken place. The number has not been plucked out of the air—it is a partisan number, arrived at solely to rig the electorate so that the Government will win general elections in the future.
Mr Mark Field (Cities of London and Westminster) (Con)
Does the shadow Minister have any evidence whatever to back up his allegation?
Chris Bryant
All the hon. Gentleman need do is look at the figures produced by many bodies, which make it abundantly clear.
Tristram Hunt
Given that this is indeed a partisan figure plucked out of the air, which appeared in neither of the governing parties’ manifestos, does my hon. Friend think that the Salisbury convention will apply in the other place? This provision has not been mandated by the people, so, under the Salisbury principle, it should not necessarily pass through the other place.
Chris Bryant
I hope that the House of Lords will look at this sort of measure. Historically, it has always looked at measures coming from the House of Commons, where the Government enjoy a majority by definition. Where the Lords have thought that legislation was calculated for partisan advantage, they have sought to look at it very closely. On many occasions in the past they have sought to change such legislation and make the House of Commons think again. As to the Salisbury convention, one problem is that it is difficult for the Lords to work out what counts as having been in a manifesto, given that two of them are now relevant. However, the number of seats specified in the clause did not appear in either manifesto, so this does present a problem.
There is a further problem. In recent years, it has been unusual for the Government to enjoy a majority in both this House and the other place. By virtue of the fact that there are now two parties in government, there should ostensibly be a majority in the House of Lords. I am very confident, however, about their lordships’ capacity for independence of mind, regardless of the whipping arrangements.
The other reason why I believe the system is being rigged, which is why I am opposed to the reduction from 650 to 600 seats, is on account of the double whammy that will apply to some parts of the United Kingdom. I am sorry if hon. Members feel I talk too much about Wales—I was about to say that I make no apology for saying that, but I have already apologised. My point is that Wales faces a double whammy. If the number of parliamentary seats had to be reduced, I would have thought that no single part of the country—particularly a constituent element of the Union—should be so disproportionately affected in one fell swoop. Reducing the number of parliamentary seats in Wales by 25%, while no other part of the United Kingdom is to suffer such an immediate cut, will be detrimental to the relationship between Wales and the rest of the United Kingdom and will merely inflame the thoughts of nationalism that already exist in Wales.
Gavin Barwell (Croydon Central) (Con)
Did not the last Labour Government reduce the number of seats in Scotland, while making no changes anywhere else in the United Kingdom?
Chris Bryant
The hon. Gentleman knows perfectly well that the number of seats in Scotland was reduced as a result of lengthy consultation there, not just of political parties but of the whole of society. There was a long convention that lasted for several years before the 1997 general election, which led to the Scotland Act 1998, the referendum, the creation of the Scottish Parliament—of which we are very proud—and, in exchange for that, a reduction in the number of seats in Scotland. The hon. Gentleman has just voted against a measure that would have prevented the Boundary Commission from reporting until after a referendum had been held in Wales on the powers that should be available to the Welsh Assembly. There is an inconsistency in what he is arguing.
Ms Louise Bagshawe (Corby) (Con)
The hon. Gentleman speaks of inconsistency. Is it not ironic that he should use the word “disproportionate” to describe what would happen in Wales as a result of the Bill, given that what would actually happen is that proportionate weight would be given to Welsh votes, as to the votes of any other electors in United Kingdom?
Chris Bryant
As I tried to argue earlier and will argue again, that simply is not the way in which, historically, we have put together the Parliament of the United Kingdom of Great Britain and Northern Ireland. I think that that is an important principle. If one is a Unionist—
Chris Bryant
Just one moment.
I know that the constituency of the hon. Member for Corby (Ms Bagshawe) contains many people with Scottish ancestry, but I do not think that she is entirely versed in the dangers of nationalism that exist in Scotland and Wales. I merely say to her, in a gentle way, that if she really wants to maintain the strength of the Union, we ought to proceed differently.
Mr Mark Field
I agree with what the shadow Minister is trying to achieve, and, if the Committee divides on the amendment, I shall vote against the reduction. However, for two reasons, I am not sure that he is making a terribly good case.
We have discussed what happened in Scotland in 2005. There was not a great Unionist upsurge there when there was a 20% reduction in the number of seats specifically in Scotland and in no other part of the United Kingdom. Does the hon. Gentleman not recognise that his is not a terribly strong argument?
The Welsh position has been maintained since we drew up the constituencies. There were 38 protected constituencies there until 1983, and 40 thereafter. The position of Wales has been protected, and it is massively over-represented. That is the reason for the move to equalise the size of electorates, which I also fully support.
Chris Bryant
This is what I meant by the double- whammy element. Wales is caught both by the equalisation of the number of seats—we are not debating that now, but we will when we deal with the next set of amendments—and by the reduction in the number of seats. The net effect for Wales is that the number of seats will be cut by a quarter.
That presents some specific problems for Wales. It has already proved impossible for the present Government to ensure that the Secretary of State for Wales represents a Welsh seat—although I admit that she is Welsh—and it will become increasingly difficult to do so in the future. Because Wales, unlike Scotland, has never had a separate legal system, the Welsh Affairs Committee has to do a large amount of work, and that will continue. I think that it will be difficult to meet those needs with only 30 seats.
I am not arguing for the status quo in the number of Welsh seats. I am merely trying to present an argument, and I am sorry that it does not appeal to the hon. Gentleman. I hope that further elements of my speech will appeal to him more.
Mrs Laing
No one is a more ardent Unionist than I am, and I fully understand what the hon. Gentleman is saying about Wales, but he must look at the arithmetic, which is inescapable. There will be a larger reduction in the number of seats in Wales than, proportionately, in the rest of the United Kingdom because, at present, the people of Wales are over-represented in the House, as well as having a devolved Assembly, or Parliament, of their own. The hon. Gentleman cannot argue that it is right for the people of Wales to have smaller constituencies and more Members of Parliament in the House of Commons than the people of most of England and Scotland. That simply does not make sense.
Chris Bryant
As the hon. Lady knows, there are differences between Wales and Scotland: Scotland has a Parliament which also has powers over crime and justice, which Wales does not have; Scotland has a completely different legal system, which Wales does not have; and it raises taxes, which Wales cannot do. It is a very different system, therefore.
Let me reiterate yet again that I am not saying that we want to hold to the status quo, but I think there will be a danger for the Unionist argument in Wales if we move forward in one fell swoop from having 40 seats to there being only 29 or 30. That would create problems for the future. Let me also say that I hope that Welsh Members work sufficiently hard that they provide value for the House, even though the hon. Lady thinks there are too many of us.
Phil Wilson
The Deputy Prime Minister keeps going on about this being the greatest constitutional reform legislation since 1832. The 1832 Act went on to equalise the size of constituencies but left the number of constituencies at 658; it did not reduce them at all. I believe the current Government want to reduce the number of seats in order to gerrymander the whole electoral system so that we do not have a Labour Government in the future.
Chris Bryant
My hon. Friend is absolutely right, except in one respect: the 1832 Act did not equalise the seats at all. In 1867, there was a discussion about equalising seats but that was decided against. The argument that was used then, and which has been used consistently in the past, is that it is more important for Members to represent communities than it is for there to be precisely numerically equal seats. Obviously that was, in part, because of the nature of the franchise at the time.
Glyn Davies (Montgomeryshire) (Con)
I am listening carefully to the case that the hon. Gentleman is making. He seems to be saying that he is quite prepared to see the number of seats reduced from 40. Will the hon. Gentleman give us some idea as to what figure he is prepared to see, therefore? It would be interesting to know exactly what figure the Opposition have in mind.
Chris Bryant
Several amendments in the next group refer to how one might make provision specifically for Wales, but there are other places we would like to make provision for, such as Cornwall and the Isle of Wight, rather than just the three areas the Bill covers. At present, however, I am specifically addressing the proposal to reduce the total number of seats from 650 to 600.
Chris Bryant
I will give way to the hon. Gentleman, but I hope shortly to be able to come on to some of the arguments that he likes more than those I am addressing at present.
Mr Field
Given that the hon. Gentleman’s concern is that this move would lead to an increase in Welsh nationalism, will he reflect on the fact that, prior to 1997, the rationale for having a Scottish Parliament was that that would somehow snuff out Scottish nationalism? The idea was not that there should be an Administration run by Scottish nationalists within eight years of the setting up of the Scottish Parliament. Therefore, the notion that not reducing the number of seats will be in the interests of those who do not want to see an increase in nationalism has not been borne out by the facts.
Chris Bryant
That was never my argument in favour of devolution in Scotland or Wales. My argument in favour of devolution was simply that it is better to devolve responsibility for issues that most directly affect people to the people who are most directly affected. That is why I thought it was right to establish the Scottish Parliament and the Welsh Assembly. I very much hope we will be snuffing out nationalism in Scotland come next May however, and I hope that the hon. Gentleman agrees with me on that.
There is one other reason why I think the diminution in the number of seats from 650 to 600 is a mistake, which is to do with the number of Ministers. At present, the law allows that there should be 95 Ministers, paid or unpaid, sitting in the House of Commons, and if there are any more, they are barred from sitting in the Commons. That is an important principle. The Executive, who—unusually compared with other such systems around the world—exclusively sit in Parliament, should be limited, as should the Prime Minister’s patronage. If we reduce the number of seats from 650 to 600 and do not change the number of Ministers, the proportion of Parliament—the legislature—that represents the Executive will grow.
I hope that we will be moving in the opposite direction, although part of me is being somewhat hypocritical because I was an unpaid Minister for a while when I held the post that the Deputy Leader of the House now holds. The advent of so many unpaid Ministers is a shame and the number of Parliamentary Private Secretaries has also increased dramatically in recent years. Prime Ministers have sought to find other ways of extending patronage by making people vice-chair of a committee or by all sorts of other means. That is wrong, because we should be limiting the power of patronage within the legislature, so that the legislature can do a better job—I argued that when Labour was in government and I am arguing it now. That is why reducing the number of seats from 650 to 600 without reducing the number of Ministers is a mistake.
John Mann
Have we not now reached the crucial, salient point, which is that even in recent times Parliament has set not an absolute number, but a target—I believe that the last one was 613—for the Boundary Commission, so that an independent boundary commission, taking into account other criteria, can then set the boundaries? Is not the fundamental difference that this rather irregular Bill attempts to create an arbitrary number without building in that flexibility for an independent body to set this coherently?
Chris Bryant
My hon. Friend is absolutely right. This approach runs against the grain of how we have always done things in this House; the proposition has always been that representation in the British Parliament should be based on the communities that exist. There has been a recognition, first, that the shires needed representation. Irrespective of whether they were large or small, the shires always had exactly the same number of seats—at first they had two, then four for a while, then two again and briefly three. It was then said that towns had to be represented and the row was then about which towns genuinely represented communities. The big change in the 1832 Act was that this House said that we could not have rotten boroughs where, to all intents and purposes, there were no electors and the seat was granted by the landlord to whomever he thought fit, and instead we had to ensure that where there were genuine communities, they should have representation, with large communities having two seats and smaller communities having one.
In addition, specifically at the moments of union, this House decided that the communities involved needed representation. So under the Act of Union in 1536, when Wales was brought in, 44 Members of Parliament were allowed for Wales—it took them six years to get here, but they were here by 1542. After the Union with England Act 1707, Scotland had 45 Members—that was increased to 53 by the 1832 Act. Following the Act of Union (Ireland) 1800, Ireland had 100 Members, a number that subsequently increased to 105, reduced to 103 and was reformed again in the 20th century with the creation of the Irish Free State.
It is also important that we do not fix the number at 600 because of the way in which the Government have crafted their Bill. It rightly allows a certain flexibility, because the electorate of any constituency may be between 95% and 105% of the aimed-at electorate across the country.
Now, let us leave aside the question of whether it is right or wrong to be precise in one’s mathematics and whether a further provision should allow the Boundary Commission to say that where there is an overriding further concern, such as a geographical, cultural or political concern, further leniency or flexibility should be allowed. What happens if the Boundary Commission, when it starts its process in the south of England and works up through the country or, in the case of Wales, starts in the south and goes north—or starts in the north and goes south—decides that the first 20 constituencies are best representing 95% of the quota? Does it then have to start filling in some 105% of that quota? The danger is that it will end up having to start all over again. Every time there is a new Boundary Commission, it will have to start all over again, because there will be knock-on effects from one constituency to another.
That is why I think it is wrong to fix the number at 600. If hon. Members think there should be a precise equation between the electorate in constituencies, it would be better to say that every constituency should be roughly 75,000 electors, give or take 5% or 10%. The Boundary Commission could then conclude how many seats there should be as a result of that to meet the two requirements—first, getting close to the 75,000 and, secondly, any other overriding concerns.
Tristram Hunt
Does not the figure of 600 point to the fundamental problem with the Bill, which is that it is spatchcocked with the demand for the referendum on the one hand and the reduction in the number of seats on the other? That means that no thought has been given to the role and function of a Member of Parliament, what we want from Members of Parliament and how many should fulfil that function. Instead, this has all been pooled together and pulled out of the air and that is why the Government are going to have problems.
Chris Bryant
I very much agree. One subject that I want to mention is precisely what the job of a Member of Parliament is in the modern era. That has obviously changed in the past 50 years and I pay tribute to the Liberal Democrats, because the kind of pavement politics that they advocated strongly—through which they won a number of seats in the ’80s and ’90s—is one thing that has changed the nature of an MP’s job today. My hon. Friend is right, and I do not think that there has been any consideration of that matter at all.
Susan Elan Jones
I welcome what my hon. Friend said about the balance between the Executive and the legislature. Judging from some of the nodding of heads, other Members did too. However, does he agree with the Deputy Prime Minister, who said to the Political and Constitutional Reform Committee in July:
“I think we have executive dominance; we have one of the most executive-led forms of government anywhere in the western world”?
I am not sure whether Nick agrees with Nick now, but does my hon. Friend?
Chris Bryant
Yes, that is true because of the structure we have in this country. Sometimes Members talk of checks and balances, which is really an import from the American system where the constitution was expressly written so as to have checks and balances. Incidentally, one of those checks and balances in the American system was that each state should have two Senators regardless of the number of people living in it. For instance, Rhode Island is tiny compared with California, which is larger economically, politically and in every other sense than a large number of countries in the world, but the two states only get two Senators in the Senate. In the British system, we do not have quite the same checks and balances—particularly if the House of Lords is dominated by a coalition in which two parties manage effectively to have control of both Houses, of the Executive and of the legislature.
I do praise some of the things that the Government have done since they took office, such as setting up the Backbench Business Committee. I hope that the whole of business could be handed over to a business committee, because I think that the role of the legislature needs to be reinforced so that the Executive is held better to account.
Various arguments have been advanced for cutting the number of MPs from 650 to 600, one of which makes international comparisons. I have heard the Deputy Prime Minister use that argument several times but it is completely fallacious. It is wrong to compare the British Parliament with the Spanish Parliament, for example, because the vast majority of Spain’s Ministers do not sit in the Spanish Parliament. The Executive are not created out of the Parliament. Similarly, in other countries—the United States being the most obvious example—the Executive do not spring from the legislature, so there are not 95 people who automatically have a second job as a Minister or a Parliamentary Private Secretary. That comparison is therefore inappropriate.
If we are to make any kind of comparison, we must bear in mind differences in the level of devolution or federalisation from one country to another. Comparing the United Kingdom with Germany, for example, is inappropriate because the Länder has far more significant powers than any local authority in England and more powers than the Welsh Assembly.
David T. C. Davies (Monmouth) (Con)
Does the hon. Gentleman agree that one of the checks is for the Government to allow ample time for all clauses in a Bill to be discussed? They have clearly done that on this occasion, but we will not get to relevant Welsh issues because he has spent the past half hour speaking.
Chris Bryant
Bearing in mind what the hon. Gentleman used to say when he was in opposition, I should have thought that he would support the scrutiny of legislation—and one has to talk to scrutinise legislation. No, we have not had enough time to scrutinise the Bill because there are four clauses and some schedules on which we have not had any debate at all. In addition, the Government have tabled 100 pages of amendments that we are going to debate on Monday, which means that we will not be able to debate issues such as the one that he is interested in—cutting the number of Ministers. I shall not take any lectures from him on how long one should speak in the House or on how much scrutiny there should be.
Chris Bryant
Of course I will give way to the eminently charming gentleman.
Chris Bryant
The Minister has clearly lost his marbles—it was because it did not give us enough time. The way in which the Government have behaved over this Bill has been an absolute shoddy mistake. They have consistently refused to provide enough time for us to debate the issues. [Interruption.] No, we did not vote against more time—we voted against the programme motion and we will continue to vote against such programme motions because we want to be able to do this job properly.
Mr Nigel Dodds (Belfast North) (DUP)
Does the hon. Gentleman agree that, given the lack of pre-legislative scrutiny and the lack of cross-party consensus or discussions that are usual with this type of Bill, it is even more important to have the necessary debates and to spend time on the Bill at this stage? I am sure that the hon. Member for Monmouth (David T. C. Davies) would be arguing for that if he were in opposition.
Chris Bryant
There has been absolutely no pre-legislative scrutiny. This has not been adumbrated in anybody’s manifesto and it has not been available for anybody to consider in public. There has been no public consultation and no consultation between political parties. Of course, therefore, there should be provision for each clause to be considered for at least one day on the Floor of the House, as this is a major constitutional Bill. I am sorry if Government Members are arguing the exact opposite of what they used to, but my point remains—international comparisons are inappropriate.
The Deputy Prime Minister has also sought to suggest that we have far too many Members of Parliament because other countries have far fewer, but the local population per elected member at local authority level in other countries is very different: in France it is 118 and in Germany it is 350, whereas in the United Kingdom it is 2,603. We have to look at the whole set of elected officials if we are to have a real impression of whether we have too many or too few Members of Parliament. I suspect that most voters in this country quite like having a local Member of Parliament who sits in the House. Of course, if one asks the public, particularly if one does so via the Daily Express or the Daily Mail, “Are there too many Members of Parliament?” they will all answer, “Yes,” but if one asks them, “Should your town not have a Member of Parliament?” or, “Should your town be combined with another town?” they would probably answer, “No, I would prefer to have a local constituency Member of Parliament whose name I know, who is accessible and whose constituency surgery I can get to.”
Glyn Davies
As someone who is fairly new to the House and who is listening to the hon. Gentleman and trying to understand exactly what the Opposition want, I should like to ask him a question. He suggests that there should be a day’s debate on every clause. The last clause simply deals with the short title. Is he suggesting that there should be a day’s debate on the short title?
Chris Bryant
No. I think that that is a slightly facetious point, but we should have a day to debate a clause that will reduce the number of Members of Parliament from 650 to 600, and rejig the boundaries in a way completely different from anything in the past, without any public consultation, without the proposal appearing in any public manifesto, and without any consultation across the parties. None the less, the hon. Gentleman makes an absolutely fair point: some clauses do not need a whole day’s debate.
David T. C. Davies
I thank the hon. Gentleman for giving way, although I do not want to extend the debate for too long. He must know perfectly well that two manifestos said that the number of MPs would be reduced and that the reduction now proposed is a much smaller one, which should be something that he could support.
Chris Bryant
No. I am not sure whether the hon. Gentleman was present at the beginning of my comments—he was doubtless opposing the Government’s measures on S4C—but as I now apparently have to rehearse the argument for him, I can tell him that I was making the point that the number has been arrived at for entirely partisan reasons. It is not the number that was in the Liberal Democrat manifesto, nor the one that was in the Conservative manifesto.
Chris Bryant
Yes, it is higher than both those figures, because it manages to reach a level that hits the number of Labour seats but not the number of Liberal Democrat seats. That is why the number has been chosen, and that is why I oppose it.
Dr John Pugh (Southport) (LD)
I want to calm things down a bit, and take the hon. Gentleman back to the technical point that he made before. He asked what would happen if the Boundary Commission dealt with a whole pile of seats first, got to about 95% and was perfectly satisfied, and then found, because it had to stick to the number 600, that it got into real difficulty and did some very odd things later on. If that was an issue for the Boundary Commission, we might think that some advice would have been given on it. Has he asked the Boundary Commission what its advice is on that point?
Chris Bryant
The Boundary Commission will do what it is told to do. If the law of the land changes, the Boundary Commission’s powers and duties are determined by that legislation and it will do what it is required to do.
Chris Bryant
No, I am not saying that the task is insuperable. Of course it would be possible to draw up the constituencies in the way proposed, but why should one constituency then end up with 95% of the average electorate and another with 105%? [Interruption.] The Deputy Leader of the House keeps on referring to the Rhondda. He obviously has some desire either to do down the people of the Rhondda or to visit the Rhondda, but I am not extending an invitation to him.
Mr Heath
I wonder why the hon. Gentleman believes that the difference between 95% and 105% is a gross intrusion, yet that the difference between my constituency with its 82,000 possible voters, and his constituency with its 52,000, is perfectly all right and needs to be preserved.
Chris Bryant
The hon. Gentleman should not misrepresent what I have said. He knows perfectly well that I have never said that there should be a divergence between his constituency with 82,000 possible voters, and mine with 51,000. I am wholeheartedly in favour of greater equalisation. I have argued that for a long time, and the Labour party and its predecessors, going way back to the Chartists in the 1840s, argued for greater equalisation of seat sizes. But if we are to move towards equalisation do we add, on top of that, the idea of a fixed number of seats? That is what I am querying.
Roger Williams (Brecon and Radnorshire) (LD)
I have listened to the hon. Gentleman’s argument against 600 seats, but I do not think that I understand his argument for 650 seats, other than that it would give the Labour party an advantage. Is that a partisan argument?
Chris Bryant
Actually, staying at 650 gives the Conservative party more of an advantage.
I was about to argue that we should not cut the number of seats. I would prefer a situation in which we did not fix the total at any particular number: that is why we have framed our amendment as we have. In addition, it is important not to cut the number of Members.
Tristram Hunt
Is not the solution, as the Political and Constitutional Reform Committee has heard, to discuss what the nature of a Member is, to seek an optimum number of Members and then to introduce a rolling programme that moves towards that number, rather than an overnight slashing from 650 to 600 for nakedly partisan reasons?
Chris Bryant
That is wholly my view. That solution gets around the problems, to which I have referred, for the parts of the Union that are more dramatically affected than others, and it would be entirely in keeping with the tradition of this House, which is that we proceed by evolution rather than revolution.
I could understand the argument for reducing the number of seats from 650 to 600 if over the past 50 years the number of seats had dramatically increased in relation to the electorate. In actual fact, however, the number of seats has grown by 3% and the number of voters has increased by 25%, so if hon. Members were being honest they would say, “As we agree that the number of seats should go with the number of voters, we should argue for more seats, rather than fewer.”
In addition, the job has completely and utterly changed over the past few years. In a previous debate, for which not all hon. Members were present, the hon. Member for Epping Forest (Mrs Laing) referred to casework, which is a concept in modern politics—
Chris Bryant
Indeed. As my hon. Friend says, she referred to it as social work.
I have always believed that the job of a modern Member is very different from that of somebody 40 or even 30 years ago. For a start, the advent of 24-hour news, e-mails, which arrive at 3 o’clock in the morning, mobile telephony and all the rest of it has meant that the electorate expect us to be available far more and to return their phone calls, messages, e-mails and letters far more frequently.
The number of letters on a policy issue that a Member would have received in the 1960s in any one week would have been fewer than 10. Today, I guess that most Members receive in excess of 250 letters a week on policy issues or on an individual casework issue. If we want fewer Members, but our answer to that is to give them more members of staff, thereby increasing their expenses, we will actually deracinate Members from the communities that they serve. We will make them less accessible to voters, and that is why I believe it is wrong to cut the number of Members.
John Mann
If my hon. Friend is getting only 250 communications a week, he needs to enhance his communication profile.
My intervention is on a different issue, however. My hon. Friend suggested accurately that the arbitrary number of 600 is an attempt to gerrymander the boundaries against Labour. That is clearly the attempt, but does he think that the Government have done their mathematics in a sufficiently competent way? If we do an analysis throughout the country and think of the rationale that the Boundary Commission might have chosen to adopt—had it been given any under the Bill—we find that there is obviously an issue in Wales and Northern Ireland, but that in Scotland the Liberals and the Scottish Nationalists have the smaller average seats, not Labour. Throughout England, the area where it is easiest to blur boundaries—
The Second Deputy Chairman of Ways and Means (Dawn Primarolo)
Order. The hon. Gentleman is making an intervention, not a speech, and I think that the hon. Member for Rhondda (Chris Bryant) has got the gist of the point.
Chris Bryant
That was a very good intervention none the less, Ms Primarolo.
The Second Deputy Chairman
I do not need to be picked up on that. I am not commenting at all on whether interventions are good or not; I simply point out that the convention of the House is that they should be relatively brief. That is all.
David T. C. Davies
On a point of order, Ms Primarolo. Many Welsh MPs here are desperate to discuss clause 11, which relates to the National Assembly for Wales. The Government have kindly given us enough time to discuss the clause, yet it seems quite possible that despite the Government’s generosity we will not get to it. Will she advise me on how I, and other Welsh MPs who care about Wales, will be able to discuss it?
The Second Deputy Chairman
Frankly, that is not a point of order. The programme motion has been agreed by the House and Members are proceeding through the Bill, discussing what they consider to be important. As long as they remain in order, they can do so. I am sure that the hon. Gentleman is grateful for having put his point on the record. Perhaps we can now return to amendment 364.
Chris Bryant
My hon. Friend the Member for Bassetlaw (John Mann) made a good point about how seats might be doled out in the different parts of the Union. It is interesting to analyse what might happen to Sheffield: it would be quite difficult to construct a Liberal Democrat seat for Sheffield, Hallam that would survive—so there is a silver lining somewhere in the legislation.
Some communities will end up without their own representation if we cut the number of seats from 650 to 600 and insist on mathematical perfection. That is a problem.
Chris Bryant
Who knows what ambitions the Deputy Prime Minister has? Perhaps he will be looking not for a Liberal Democrat seat but for another kind of seat, come the next general election.
My hon. Friend the Member for Bassetlaw excoriated me for having only 250 pieces of communication. I meant 250 letters a week; the letter, of course, is almost something from the past these days. The vast majority of the correspondence from my constituency comes in the form of a telephone call, text message, Facebook message or through some other means.
Most members of the public expect a reply from the MP, not from some flunky or somebody working in the office for free. [Interruption.] The hon. Member for Bristol West (Stephen Williams) is picking me up on the word “flunky”. There are no flunkies working in my office—nor, for that matter, do I ever use staff who have offered to work for free. It is one of the shames of this Parliament that so many MPs should have to survive on the free staffing provided by interns. We ought to be moving towards having paid staff.
Another argument that I would adduce in favour of not cutting the numbers from 650 to 600 is that over the past 50 years Parliament has become more and more the place where career politicians intend to come, stay and make their livelihood. Many people have a much more diverse history than just having worked as a special adviser or for a political party before coming here. The hon. Member for Totnes (Dr Wollaston) is a former GP; in fact, I think that she still serves as one. As we know, the hon. Member for Corby (Ms Bagshawe) is an author—and, of course, a former member of the Labour party. She has a diverse career behind her.
Chris Bryant
I am not sure whether the hon. Lady is referring to her literature or her former party membership.
This Parliament has survived because of some of the mavericks and eccentrics, and the diversity of Members that it has managed to bring in here. If we reduce the numbers from 650 to 600, it will be the mavericks and the independents who will be disappearing and we will have more of the party political placepeople. That is a problem. [Interruption.] The hon. Member for Rochford and Southend East (James Duddridge) is saying, rather unkindly, that I am such a placeman. [Interruption.] The Minister is trying to help by asking me what I think I am. I do not think that this clause is where we go into what I think I am: the meaning of life would be a bit too complicated, and it would go a little wide of the debate, Ms Primarolo.
Roger Williams
If an electorate of 85,000 is reduced to 75,000, how does that make it more difficult for a constituent to contact his MP? Surely every MP should be equally available to their constituents.
Chris Bryant
The hon. Gentleman represents an area in Wales part of which, I guess, may end up in a constituency that is very large.
Chris Bryant
That did not make it better, and it was larger in an era when the expectations of a Member of Parliament to be present and available were much reduced. There was a time when MPs, when they visited their constituencies—once a year—were greeted with a brass band. That is not true today. [Interruption.] It is certainly not true for me, and I can see that it is not true for anybody else either.
Stephen Williams (Bristol West) (LD)
I have read the hon. Gentleman’s book, and I think that he is referring to Stafford Cripps, who was greeted by a brass band when he arrived at Bristol Temple Meads. The Member who currently represents Bristol Temple Meads is certainly not greeted in that way.
Chris Bryant
The hon. Gentleman is right: I am referring to Stafford Cripps. The book is not one that is available in all good bookshops, but there is a copy in the Library should any hon. Member wish to read it.
I want to end with the words of Jim Callaghan, a former Prime Minister and a Member who represented south Wales:
“Constituencies are not merely areas bounded by a line on a map; they are living communities with a unity, a history and a personality of their own.”—[Official Report, 19 June 1969; Vol. 785, c. 742.]
That has always been how we have done things in this House and in this country, and I believe that it is how we should continue to do them in future. That is why I have moved this amendment, and why I hope that we will not reduce the number of seats from 650 to a fixed number of 600.
Mr Mark Field
I must confess that I totally accept the need to equalise electorates, which is why I have tabled amendments in a later group, which I suspect we will not get to, suggesting that we leave out of the Bill the gerrymandering—there is no other word to use—of three Scottish seats. That has occurred through a limit of 13,000 sq km being plucked out of the sky to allow Ross, Skye and Lochaber, and probably also Caithness, Sutherland and Easter Ross, to be seen as exceptional. If we equalise constituencies it could be regrettable for such communities, but we want electorates of a similar size.
In fairness to the hon. Member for Rhondda (Chris Bryant), I think that equal constituencies will mean that we divide the country up into 10 or 15 different areas, from which we can draw up the 600 seats, rather than suddenly realising when we get to the middle of Scotland that we are 10 or 15 seats short. I fully accept the need to equalise electorates, and it is greatly to be regretted that we are not doing that for all seats. It seems that a rather grubby little compromise has been put in place. In the modern, technological era, I disagree with the idea that the Western Isles and Orkney and Shetland, the two smallest seats in the UK, should be protected. Orkney and Shetland was part of the Wick Burghs constituency at one time during the last century, and the Western Isles were part of the Ross and Cromarty and Inverness-shire constituencies. It is a bogus argument that those constituencies somehow have great historical relevance.
Mr Wayne David (Caerphilly) (Lab)
The hon. Gentleman said that in his view there had been a grubby little compromise. That is quite a statement to make. Would he like to explain and elaborate on exactly what he means?
Mr Field
I believe that the compromise was perhaps made to keep the Scottish nationalists happy—[Interruption.] Well, the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) represents virtually no constituents in this House. I respect that, but we are living in a technological age of e-mails and so on, and I do not agree with the notion that he should maintain the privileged position of representing just 23,000 constituents, when many of us have to represent not only our statutory 70,000 or so but a significant number of non-UK nationals. There is a perfectly good case to be made, but it should not override the idea of equalising communities.
Mr MacNeil
In one respect I would love to help the hon. Gentleman, of course, because I would be quite happy for there to be no MPs from Scotland in this House at all. In the meantime, while we have to have that situation, I remind him that my constituency is the length of Wales. He is very welcome to come with me to the Western Isles and explain his views to all my constituents whom he might meet on his visit.
Mark Tami
I listened to what the hon. Gentleman said about the three seats in Scotland. In Wales, there could be a seat in the middle of the country that, as I said earlier, could stretch from one side of Wales to the other with a very sparse population. Why is it okay for that to be taken into account of in the case of Scotland, but not Wales?
Mr Field
I entirely agree, and I am not defending that element of the Bill.
Neither can I see any justification for a reduction in the size of the House of Commons from 650 to 600. The somewhat bogus argument that it will save £12 million a year is certainly outweighed by the fact that the alternative vote referendum will cost some £80 million to £100 million. It is also argued that our House is one of the largest legislatures, but that argument is destroyed by the fact that this Government alone have already massively increased the size of the House of Lords, by some 56 Members since May. They are now looking to stuff a whole lot more unelected Lords in there, and the proposals to make the other House even larger are an absolute disgrace, at least before there is any reform. It is entirely regrettable that there is not to be reform of the House of Commons and the House of Lords as part of the same package.
I fear, given the comments that a number of colleagues have made, that we have not been able to scrutinise the Bill properly because we have run out of time under the programme motion. It will therefore be the House of Lords that takes up the important work of examining the constitutional impact of what is being suggested. The hon. Member for Rhondda is right that nowhere in any manifesto was there a commitment to 600 seats, and all three parties committed to move to a wholly or largely elected House of Lords at the earliest possible opportunity. That now seems a long way off. I particularly regret that because it has always been the Liberal Democrats’ position to democratise, and to make the House of Lords accountable to the electorate. They now hold the novel constitutional principle that the House of Lords should somehow reflect the voting at the last election. That suggests that 200 or so peers will be added to the House of Lords—a significant number of whom will come from the Liberal Democrat party.
I hope that, in so far as more people are to be added to the House of Lords, close scrutiny will be paid to ensure that former Members of the Commons who were caught up in the expenses scandal are not rewarded with a life peerage. As we have seen from the difficulty with the three peers who have been suspended and the two Conservative peers who face the courts in the next few months, there is no mechanism for getting rid of people from the House of Lords. Yet, as part of the constitutional reform, we are introducing some concept of giving our constituents a recall mechanism to get rid of Members of the Commons. The position is incongruous. Until the House of Lords has been sorted out—and certainly for so long as we stuff yet more unelected peers into the other place, which we have already done since May and will continue to do—it would be wrong to reduce the size of the Commons.
Austin Mitchell (Great Grimsby) (Lab)
I rise to speak about amendments 259 and 260, which I tabled and hope to put to the vote at the end of the debate. Two features of the “General Gerrymander and Electoral Jiggery-Pokery” Bill are the most offensive. The first is the alternative vote, which is a Liberal benefit plan—Liberal Democrats hope that if we get the alternative vote, they will be everybody’s second preference. Fortunately, the alternative vote is unlikely to be carried in the referendum—I shall certainly vote against it. It is rather sad that many people with whom I have worked over the years for electoral reform seem to believe that AV is a form of electoral reform. It is not—it is the stupid person’s electoral reform. The only effective electoral reform is proportional representation.
Stephen Williams
If the hon. Gentleman thinks that AV is such a mistake, why did he use it to elect his own leader, and why was it in the Labour party’s election manifesto?
Austin Mitchell
The leader now sees the benefits of the alternative vote, but I do not. It is not a halfway house to a system of proportional representation. Only proportional representation will allow us to manage the emerging multi-party system in the confines of the electoral system. We cannot do it with the current system, but I do not want to be detoured from my main purpose.
The second unattractive feature of the Bill is clause 9, to which amendments 259 and 260 apply. It is even more offensive because it is the “Castration of the Commons” clause. It states:
“The number of constituencies in the United Kingdom shall be 600.”
It does not say “590”, “620” or “650”, but “600.” It would be interesting to know how the Government reached that figure. Did they have a séance, as they did for the scale of the cuts that were announced this afternoon: “£240 billion, £120 billion; £600 billion”? Did they split the difference, or did they, as my hon. Friend the Member for Rhondda (Chris Bryant) suggested—I think rightly—arrive at a figure that will lose Labour more seats than the Liberal Democrats?
The Liberals had a smaller figure in their manifesto, but it was proposed in the light of a transfer to STV, which the Liberal party has always supported, with three, four or five-Member constituencies, in which the Liberals have a greater chance of getting somebody elected. The smaller figure was not proposed for first past the post or AV. The Government wanted to cut 10% of the seats. Why? Was it an economy measure? Was it to capitalise on the discontent that The Daily Telegraph’s revelations about expenses produced, and to say, “We’re getting rid of these greedy so-and-sos and reducing the number of people who sponge off the public purse”? Was it that sort of populism? Is that how they arrived at the figure? We need to know before we can make a judgment.
Ian Lucas (Wrexham) (Lab)
My hon. Friend said that the Liberal Democrats had always supported the single transferable vote. Could I remind him that he tabled an amendment recently on STV that they voted against? In fact, they should clearly change their position and say that they now oppose STV.
Austin Mitchell
The Liberals are in a determined rush to sign their own death warrant. I cannot judge them. I am trying to help them, because people should not sign their own death warrant while the balance of the mind is disturbed. I am trying to take power of attorney over them. The Liberal leader’s constituency—Sheffield, Hallam—will be abolished under the Bill, so a winnable seat in Sheffield will go. He might have told his party, “At this stage in the coalition, chaps, we need a futile gesture. I want you to agree to give up your seats for this Bill.” It could be that that went on, although I do not know the internal processes of the Liberals. Some of my best friends are Liberals, but I will not speak for them. I am trying to help them by tabling amendments such as the one to which my hon. Friend referred and amendment 259, which would keep the number of MPs at 650.
Graham Stringer
Does my hon. Friend agree that the single biggest weakness of the British constitution is that elected Members of the House of Commons do not have enough power in relation to the Executive? Clause 9 will further diminish the power of elected representatives.
Austin Mitchell
That is absolutely right and I agree absolutely with my hon. Friend. The real problem with the British constitution is that we do not have one. The constitution in this country is what the Government can get away with. If they can get away with clause 9, which weakens democracy and the Commons and strengthens the Executive, they can get away with more or less anything, with the willing concurrence of the supine Liberals, who are supporting a measure that will weaken them—hopefully—for their own execution.
There is no mystique to how I arrived at the figure of 650 for amendment 259. I just put it in. That is the number of MPs now and the Commons will function efficiently with it. There used to be 700 MPs in the 19th century when the Irish were here. They had to fit in a Chamber the size of this one, which seats about 420—fortunately, most of them did not come—but 650 is a good working total, which is why I chose it.
The consequence of having 600 MPs, as proposed in clause 9, is that the redistribution will be more brutal and more massive. It will be a blitzkrieg of a redistribution, but there will be no democratic controls on it. The scale of the redistribution is determined by the size of the House.
Chris Bryant
I just wanted to correct a fact that my hon. Friend gave. He said that there were 700 Members in the 19th century owing to the Irish, but in fact, the only time that there were more than 700 Members was from 1918 to 1922. That redistribution was brought about by the Liberals.
Austin Mitchell
I am grateful for my hon. Friend’s intervention. I took history at university, but my thesis was on the Whig party in opposition from 1812 to 1830, which was very good preparation for being in the Labour party in the 1980s and 1990s. I did not get as far as the Irish settlement of 1922, and I always regret that. I shall go to him for some tutorials. He is obviously better informed than I am.
I arrived at the figure of 650 because that seems to work well, and I do not want a reduction. As my hon. Friend the Member for Blackley and Broughton (Graham Stringer) pointed out, a reduction in the number of MPs and a smaller House will make the Executive proportionately stronger. I would like to see some proposals from the Government to reduce the number of Executive appointments. There are more than 100, which means that they have a huge bought vote in the House to overrule the wishes of the Members. I want Members to be stronger and the Executive to be weaker, but this measure will have the opposite effect.
Mrs Anne Main (St Albans) (Con)
Although I completely support the reduction in the number of Members, I have huge sympathy with the point that the hon. Gentleman makes about the Executive, because of the lack of voice. Members of the Executive do not speak on local constituency matters, and I would therefore welcome any attempts to reduce Executive numbers to increase the voice of Back Benchers proportionally.
Austin Mitchell
If the number of Members is reduced, the voice of the constituencies will be proportionally less in this House, and that is another argument for keeping the 650, as I propose. What will happen if the Executive are reduced in this House? Will we have more Executive appointments in the Lords? Will we appoint more of those grovelling chief executives and chairmen who wrote to The Daily Telegraph to support the Government’s plans for cuts at the expense of their customers, saying in effect, “It doesn’t matter how much damage you inflict on our customers and on demand for our businesses, we support the Government.” That is clearly a plea for knighthoods or Government jobs. Will the Government respond to that by creating posts outside Parliament for these people? How will they reconstitute the Executive to make them less strong proportionally in a reduced House? We have heard nothing on that.
Secondly, the reduction would reduce the pool of talent from which to select Ministers and to make all the other contributions that MPs make. Heaven knows, the pool is not all that big now. We do not have all that much talent, and certainly not the level that we used to have—[Interruption.] Well, we have some, especially from Humberside. Our contribution is big, but it is not enough. I would like a bigger pool of talent in the House to pick Ministers from.
Most importantly, the change would reduce the service that we provide to our constituents. I have always found constituency work exciting and interesting, and a solace for my failure to be appointed to any ministerial job—or my ability to mess up any ministerial appointment that I have been offered, which has always been very short-lived because of the joys of constituency work. I find it very satisfactory—
Mr MacNeil
May I take this opportunity to place it on the record that I would have loved to see the hon. Gentleman as a Fisheries Minister at one time?
Austin Mitchell
I was hoping that the SNP would appoint me Fisheries Minister for Scotland, but that post would have been a little difficult to handle from Grimsby. I never even achieved the rank of PPS to the Minister—[Interruption.] I apologise, Ms Primarolo. I was led astray.
There is a genuine issue about the service that we provide to our constituents. I know that we have changed over the years from senators to servants of our constituency, and I know that the amount of work has steadily increased. That is a necessary development, because our constituents want to be heard more. We no longer have the same sort of subservient, quiet and loyal electorate that would vote for parties and did not want their voice to be heard. People want to be heard and they want us to listen to them. They want to communicate with us and they want us to raise the problems that they raise with us. That is the job, and we would be less able to do that if there were fewer of us here.
Mr Heath
I am bemused by this concept that the figure of 600 would prevent Members of Parliament from being able to represent their constituents adequately, because the electoral quota suggested—about 76,000—already applies to a third of the House, give or take 5%. Is the hon. Gentleman saying that a third of Members are incapable of representing their constituents properly?
Austin Mitchell
The bigger the size of the constituency and the electorate, the harder it is to represent them adequately. It may be that evening up constituencies leads to areas being more adequately represented, because those areas will have smaller constituencies, but in my case it will mean a bigger constituency, and many of us are struggling to do the job now.
For example, the amount of mail is increasing all the time. Not so long ago, I read the biography of Hugh Gaitskell by Philip Williams, which was about Gaitskell in the 1950s. It said that Gaitskell’s papers showed that in 1958, when he was the MP for Leeds South East, he got 50 letters a month from his constituents. I get 50 letters every couple of days, and that is in addition to all the e-mails, surgery visits and stoppings in the street in Grimsby, with people asking whether I will ask this or do that, and so on, all of which I have to scribble down. That must mean that in a larger constituency it is more difficult to serve everyone in it. That is an obvious fact. Indeed, it is getting difficult to do the job adequately with 650 Members. We need more and more staff. Fortunately, we have been given more staff, but it is not enough, although it depends on the seriousness with which one does the job.
Mrs Laing
I thank the hon. Gentleman for giving way. Nobody could do the job more seriously than he, but right at this moment he is representing his constituents in that other way. He is once again confusing his job—the job of us all—as a social worker, providing pastoral care and advice, with the job of representing our constituents as part of the democratic process. He cannot possibly argue that a man of his calibre, or the calibre of anyone sitting in the Chamber right now, cannot cope with a few thousand more constituents to represent.
Austin Mitchell
I have to say that I cannot. If the work is done properly and the job is properly tackled, it is difficult. Indeed, I cannot see how people can have outside jobs and be here.
Austin Mitchell
My hon. Friend is exactly right. Many of the ideas that I raised, the questions that I have asked and the things that I have debated in Westminster Hall come from constituents and constituency problems. That is the nature of democracy—that is how it has to be. We have to face the fact that the state is interacting with people and imposing things on them more than ever before.
Let us look at the flood of problems that we have had with the Child Support Agency, and the fact that a special hotline has had to be created for MPs, so that they can get through to Belfast and have incomprehensible conversations. [Interruption.] I appreciate the difficulties that the constituents of my hon. Friend the Member for Foyle (Mark Durkan) face doing that kind of job—if I could make it easier, I would—but it creates an enormous amount of extra work for us. The same is true of tax credits, which are extremely complex. There is all that interaction, and believe me, Ms Primarolo, there will be a lot more interaction as a result of the cuts announced today, as people come to us with problems to do with benefits, invalidity and cutting off job support. That is going to create a lot more work for us in our constituencies and a lot more work in our surgeries.
Mark Durkan
I just want to reinforce my hon. Friend’s point. He has to ring Belfast about CSA cases, but he is not the only Member who has to ring people in remote parts who know nothing of the situations that we are dealing with. We in Northern Ireland experience that regularly when we deal with tax credits. In fairness, the conversations that we have with Frank in Preston are comprehensible; it is the other officials who are the problem.
Austin Mitchell
I agree absolutely with that.
A number of Members would like to see us as some kind of intellectual elite, or as the senators that we perhaps used to be in the 19th century. The fact that we are now the street cleaners and the sewage cleaners of the constitutions—the slaves in the galley of the ship of state, albeit somewhat differently whipped—offends their dignity, but that is the job as it is.
Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)
Does my hon. Friend agree that it is unreasonable to deride one-to-one pastoral care of constituents as social work, partly because it necessarily informs our work as MPs but also because the more ordinary constituents meet their MP, whether at church, in an advice session or in the supermarket, the more they will respect us?
Austin Mitchell
I absolutely agree with my hon. Friend. There has been a lot of damaging criticism and abuse of MPs as a result of the revelations in The Daily Telegraph last year, and some of that was, frankly, scandalous. It has lowered us in the public’s estimation, but people still turn to us. They need us for all the problems that they come up against. We are the defenders of last resort. We are the ombudsmen for our constituents.
Chris Bryant
But is it not also true that, especially for some of the most vulnerable people in some of the most vulnerable communities, we are the only advocates they can afford, whether we are advocating their cause here or, for example, at their bank? We represent them in all kinds of circumstances that no one would have conceived of as part of the job 50 years ago.
Austin Mitchell
I agree with my hon. Friend absolutely; he has made that point very well. That is another good title for MPs: the advocate of last resort—the people’s advocate. Well, in my case, I would be their last resort because of the inarticulacy of my advocacy! But that is the nature of the job, and it is no use complaining or saying that it is beneath our dignity to tackle all these problems. It is no use doing as Enoch Powell used to do when anyone raised an issue—
The Second Deputy Chairman
Order. I realise that the hon. Gentleman is making some broader points to support his amendment, which proposes 650 Members, and if he could return to that subject I would be enormously grateful.
Austin Mitchell
I am sorry, Ms Primarolo.
I should have said that it is much easier to do this job with 650 MPs, and that it will be much more difficult if the clause passes unamended and reduces the membership of the House to 600. That is the essence of my argument. We are straining to do the job as it is, and we have had to take on more staff. We shall need even more staff if the number of MPs is reduced. It is difficult to do our job, but it is well worth doing.
Mrs Main
I had a degree of sympathy with the hon. Gentleman when he was talking about the strength of the Executive, but if he has time to make TV programmes and do other things outside the House, I cannot believe that he does not have a spare moment, or that a reduction in the number of MPs would not be feasible.
Austin Mitchell
Some of us labour under the misfortune of being better looking than others—[Laughter.] We might appear more on television for that reason, although my days as a television hero are long gone. The essence of my argument is that this demand comes to us from the people. This is not about us putting ourselves forward to do the work; the demand comes from the people and they have to be served.
Phil Wilson
The people who support the idea of reducing the number of MPs from 650 to 600 say that it will save about £12 million, but even they are saying that we will need more resources to look after our constituents and that we will therefore need more staff. That £12 million will disappear overnight to pay for the extra resources that we are going to need.
Austin Mitchell
My hon. Friend is right. We cannot economise on democracy. We are a basic part of our democracy. We are the protectors of the people and we cannot economise on that because the demand comes from them, and they have to be served. That is our job. Some people argue that 650 MPs is too many and that this legislature is bigger than others. Yes, it is bigger than many other legislatures, but we have to bear in mind the fact that most other systems are federal. In other words, countries such as Australia, Canada, Germany and the United States have elected representatives at several levels of government. We do not. We are the only elected representatives who can act for the people in that way. That is why the figure of 650 appears in my amendment and why there should be no reduction. The proposed reduction in clause 9, which my amendment would stop, is based on a contempt for MPs and the work that they do. I want to reject that contempt.
Mr Christopher Chope (Christchurch) (Con)
I shall speak to my amendments 67 and 68. Amendment 67 would substitute the figure of 600 for 585. I tabled the amendment because at the last general election the Conservative party manifesto, on which I was privileged to be re-elected, referred to 585 seats. I have to say that I had some reservations about that part of our manifesto, because I felt that it introduced a degree of inflexibility where, as we have heard from the Political and Constitutional Affairs Committee and the Boundary Commission, it is desirable to leave the Boundary Commission with some flexibility in considering these important issues. From the outset of this Parliament, however, I have been trying to get a straight answer—either from the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper) or the Deputy Leader of the House—to the question why the figure of 600 was chosen.
I take very seriously the allegation made today by the hon. Member for Rhondda (Chris Bryant) that the figure of 600 was chosen for politically partisan reasons rather than for objective reasons pertaining to good government. I look forward to the Government responding in detail to the question of why 600, rather than 585, which was in our manifesto, was chosen. I note that the hon. Member for St Ives (Andrew George) is not yet in his place to speak to his amendment 74. It is a corresponding amendment from the Liberal Democrats, calling for a reduction to 500, which was the exact figure that the Liberal Democrats included in their manifesto, on which the hon. Gentleman was re-elected to this House. This is a very serious issue.
The suggestion that the figure of 600 has been plucked out of the air has rather damaging connotations for the credibility of the coalition Government. Let us examine the difference between 600 and 585. With 600 seats, there would be roughly 75,000 to 76,000 electors per constituency. With 585—in other words, a reduction of 2.5% on the 600 figure—an average of 1,800 or so electors would be added to every constituency. Is anyone in government arguing that it is on account of that crucial increase of another 1,800 electors per constituency that we have opted for the 600 figure rather than 585—itself a conveniently round number in the sense that it was a 10% reduction on the present size of the House?
Mr Heath
I am grateful to the hon. Gentleman, but there is nothing magical about the figure of 600, just as there is nothing magical about 585. One was a 10% reduction; the other a round figure reduction of 50. The figure is not magical; it is simply an arbitrary figure that reduces the size of the House in a way that I believe is consistent with the public mood and the needs of this House.
Mr Chope
The hon. Gentleman says that it is an arbitrary figure; I am pleased that he concedes that. He says that it is consistent with the public mood, so let us examine that proposition and let us hope that he will provide some evidence for it when he responds to this debate in due course. He also says that the figure is consistent with the needs of this House. Where is the evidence for that? Why should this House comprise 600 rather than 585 Members? If, by referring to the public mood, the hon. Gentleman means the public’s concern about the costs of Parliament, why at the same time as reducing the size of this House are we merrily increasing the number of people in the other place, as my hon. Friend the Member for Cities of London and Westminster (Mr Field) asked? Indeed, as he told us, the number has already increased by more than the proposed reduction here.
The Government are proposing to reduce the number of Members of Parliament by 50, but they have already increased the number of Members in the other House by well over 50—getting on for 60—and there is a prospect of substantial further increases. Where is the case for that? How can increasing the size of the unelected House at considerable additional public expense, while at the same time reducing the size of the elected House, accord with the public mood?
James Wharton (Stockton South) (Con)
I have a great deal of sympathy with my hon. Friend’s argument about the House of Lords, but surely the fact that one House is currently moving in the wrong direction does not mean that we should not move in the right direction.
Mr Chope
My hon. Friend has made a perfectly fair point. Let us recall, however, that although the Government have consistently argued that the problem is that this elected House is the largest in the European Union and in most legislatures, they never point out that the other House is larger than this, and that in legislatures not just in the European Union but throughout the globe the revising or upper Chamber, or the senate, is almost invariably not larger but significantly smaller than the elected Chamber. Where is the justification for maintaining a much larger second Chamber? No international relative statistics support the case for very large second Chambers, which seems to be what the Government want to introduce.
Ian Mearns (Gateshead) (Lab)
The hon. Gentleman has made a pertinent point in referring to the size of second Chambers in many modern democracies around the world. The point that he has not made is that in most of those instances the second Chamber is elected, whereas our second Chamber—which is bigger than our elected Chamber—is unelected. I consider it a massive contradiction that the Government are proposing an expansion of the unelected second Chamber and a reduction in the size of the legitimate, elected Chamber.
Mr Chope
I am grateful to the hon. Gentleman for his support. While he was making his intervention, I received a communication from a Whip to the effect that, apparently, the coalition Government are committed to reducing the size of the other House. My response was “When?” I supported an excellent ten-minute rule Bill presented by my hon. Friend the Member for Wellingborough (Mr Bone), which proposed doing away with Whips in this Chamber. I am grateful to the Whip for the help that he tried to give, but I should be even more grateful if he could ensure, perhaps through those on the Front Bench, that it is put on record when we will reach a point at which the second Chamber is smaller than this elected Chamber.
Mr Dodds
The hon. Gentleman is making an excellent point, as did his hon. Friend the Member for Cities of London and Westminster (Mr Field), but is there not a clear case for presenting the proposals relating to voting, membership and size as a single reform package, given that there is bound to be a reduction at some time in the future? The fact that Whips are running around giving Members information illustrates our current problem.
Mr Chope
As so often, the right hon. Gentleman has made a fundamental point. Given that the Government have not been listening to what has been said on both sides of the Chamber throughout our debates, I hope that the other place will concentrate the Government’s mind by taking control of these important issues and insisting that piecemeal constitutional legislation of the sort that we are discussing is not the answer to the country’s problems, does not accord with the public mood, and is cynical in the extreme. I hope that the Bill, which has been subject to vicious timetabling and much of which will not be discussed in this Chamber, will be well and truly filleted when it reaches the other place.
Ian Lucas
The hon. Gentleman is making an important speech. Does he agree that what the public want is a straightforward approach from politicians of all parties, democratic accountability and an honest, considered discussion about amendments to the British constitution? Unfortunately, because we have discussed neither the Bill in draft nor issues relating to the House of Lords, we are not having that discussion now. My constituents are telling me that they believe that the Bill is designed for party political advantage, which diminishes this Chamber and all of us who sit in it.
Mr Chope
I take the hon. Gentleman’s point very seriously, because the allegation that there is to be constitutional change in order to try to benefit one political party over another is a very serious one. We should not allow that allegation to be spread among the electorate unless there is a justification for it. I am looking for some assurance from my hon. Friends on the Front Bench that there is no political manoeuvring and that instead this is an objective, non-partisan measure. So far, however, I have not been convinced that that is so, and I do not think the arguments put from the Opposition Front Bench and by Back Benchers on both sides of the Chamber have been properly addressed.
I have made the following point to the Deputy Prime Minister in many previous discussions in the House. There should not be a reduction in the size of the legislature without a pro rata reduction in the size of the Government. The response I have always received to that is, “Well, we don’t see the need to do that as the two issues are not connected,” but they are fundamentally connected. The hon. Member for Great Grimsby (Austin Mitchell) and others have already made the point that the measures under discussion will give much more power to the Executive and less power to the legislature, and that is totally at odds with what the Prime Minister said when he was Leader of the Opposition that he was going to do. He said then that he wanted to increase the power of Members of Parliament and reduce the size and power of the Executive. He said that in the run-up to the general election, and it was even spelled out in terms in the Conservative party manifesto. I hope that at the end of this debate we will hear from the Front-Bench team how they think that these measures are consistent with undertakings given to the electorate both before and during the general election campaign.
What conceivable reason can there be for picking this arbitrary figure of 600? One rumour circulating among many of my colleagues is that the motivation behind the move is to provide another way for the Executive, through party managers and the party machine, to be able to put the frighteners on reluctant supporters of the coalition in both Government parties. Boundary Commission representatives said in evidence to the Political and Constitutional Reform Committee that as a result of these proposals every single constituency in the country will have to have significant boundary changes. The Whips have peddled a bit of misinformation, suggesting that if a Member’s constituency already has about the right new number of constituents—76,000—then, “You’ll be all right, Jack,” but the Boundary Commission has made it clear that every single constituency boundary in the country will have to be significantly altered. What goes with that, of course, is the reselection of Members of Parliament, and what goes with that is more power for the Executive, through the party managers, to try to influence the reselection process.
Although we know that, in fact, the most independent MPs got the best results in the last general election, it does not prevent—[Interruption.] The hon. Member for Hackney North and Stoke Newington (Ms Abbott) is right: she had an outstanding result in the general election, on which I congratulate her, and it had nothing whatever to do with her loyalty to her party when it was in government. What she achieved sends a very important message. I hope that many of my 147 new colleagues will take that message to heart and realise that even if this Bill goes through and a change is made to almost every constituency, those who have stood up fearlessly on behalf of their constituents will do better at the ballot box, and probably in the reselection process, than those who supinely followed whatever they were told to do by the Whips. That does not alter the fact that this can be done to put the frighteners on people, because nobody quite knows what the future will bring.
Phil Wilson
The hon. Gentleman is talking about the chaos that the boundary changes will create, but if this measure goes through, that will not just occur this time around; there will be uncertainty every term, not only for all Members in this place, but for our electors. We could end up breaking the link, which we all respect, between elected politicians and their voters.
Mr Chope
The hon. Gentleman is absolutely right. A proposal that has not yet been tabled in an amendment or a new clause, but perhaps could be tabled on Report or in the other place, is for a sunset clause, in order to see how the new number works in practice, rather than allowing it to go on indefinitely. He may be interested in proposing such a sunset clause—
The Second Deputy Chairman of Ways and Means (Dawn Primarolo)
Order. Shall we concentrate on what is actually in the Bill—in particular, the issue of the number of MPs—and not on what might occur in the future?
Mr Chope
Absolutely, Ms Primarolo. I am sorry that I got slightly carried away, as a result of that intervention, in anticipating what might happen in the future.
I tabled my amendment for discussion because in the general election we promised that there would be 585 MPs, because we needed that number and it would reduce the costs of Parliament, but we are now proposing 600. That means that the costs will be reduced by less than they would have been had we opted for 585. Given what we have heard today, it appears that when the books were opened they were even worse than the worst fears of my right hon. Friends in the Government. Surely it is inconsistent with the spending decisions taken today to row back from a figure of 585 to one of 600. That gives credence to the charge made against the coalition Government that, although 600 is an arbitrary figure, it is not quite as arbitrary as we might be led to believe, because it is based on some private work that has been done suggesting that it might be to the advantage of the coalition partners, rather than the Labour party.
Mr Chope
Ms Primarolo, you have already criticised me for speculating, and I am certainly not going to speculate. All I am saying is that, before this House gives approval to a reduction in the number of MPs to a fixed number of 600, the case needs to be made and we need something more than an assertion that it is an arbitrary figure, that it accords with the public mood and that it meets the needs of this House. None of those things has been established. Apart from anything else, even if I agreed with such a move, I would not support it unless I could see evidence of a pro rata reduction in the number of Ministers and the size of the Executive, and thereby not a dilution of this House’s ability to hold the Executive to account. That is my modest contribution, but I make it clear that I intend to seek re-election in the next Parliament, be there 600 or 585 constituencies, or the current number.
John Mann
I wish to address my remarks to amendments 364 and 227. I particularly wish to deal with the principle of having the number of Members of Parliament fixed at 600, because I find the fixed number particularly objectionable and dangerous. That contradicts the history of this country going back many centuries, because our system has evolved as a majority system. We have had first past the post—although the alternative vote is now being suggested—as a way of electing individual Members who represent individual constituencies. The moment that one moves towards a mathematical fixation determining the number of seats, the trip down the slippery slope towards proportional representation has begun. If the mindset is that there should be an equality of votes, however that is defined—of course there were important arguments yesterday about how to define the equality of voters and who defines the electorate—and that there should be a mathematical equation, the logical conclusion is that that can be taken further as things ebb and flow.
A further conclusion could be drawn from that, because if it is good enough for the House of Commons, it is good enough for other parts of the—I use this phrase lightly—British constitution. So the House of Lords should have a fixed number of seats and Members of that House should be aware of the likely logic that must follow, whatever that number might be. Some might suggest—I think I once did—that if there was a fixed number, it should be as low as 100. It might be a shock to them to go so low. However, the moment one has a fixed number, one sets in place a principle that totally and absolutely contradicts every principle in establishing constituencies that this country has had before.
This is a critical principle, which seems to have been overlooked in the debate about the precise numbers. The moment we make that change, that principle will be enshrined for ever. The Deputy Prime Minister made comparisons to the Great Reform Act of 1832. I have studied that Act quite extensively, not least because the originator, John Cartwright, came up with the concept living in the house that I now occupy and would have been a constituent of mine. The original rotten borough was East Retford, with 150 voters choosing two Members of Parliament. Following the recent boundary changes, done on the basis of equalising constituencies across the county of Nottinghamshire, I now have the privilege of representing Retford, having lost the district of Warsop.
That was part of a boundary change under the current system to numerically equalise as much as possible the size of parliamentary seats. I have 20,000 new voters and I lost 10,000. I do not object to that principle. The 10,000 who went objected vehemently, because they seemed to feel that I was a good and representative Member of Parliament, but those whom I now represent were delighted to have the opportunity to vote for or against me. That was a major redistribution on the principle of equalising size, but this rotten Bill enshrines in perpetuity the concept of a mathematical arbitrary equation that each constituency will be of the same size, which has fundamental ramifications.
Mr Mark Field
I very much agree with what the hon. Gentleman has to say, but does he not recognise that we have already enshrined PR in our political system to quite a large extent, through the European Parliament since 1999, through the way we elect the Scottish Parliament, Welsh Assembly and London assembly, and through the way in which local authorities are elected in Scotland? We are going down precisely that path, but it is a slippery slope that we started down quite some time ago.
John Mann
We have had this slippery slope with the European Parliament and with how we choose its Members. Of course, the Deputy Prime Minister, apparently, was once a representative in my area—no one seems to have realised that fact, because such Members are rather distant and remote, whether they do a good job or not, because of the size of the constituency.
The interrelationship between individual and electorate that has been the basis of democracy in this country—one that other countries have, too often, moved away from in their determination to have either proportionality or equality and to have mathematical solutions to how they build a legislature—is the foundation of participative democracy. We are not just a representative democracy in this Chamber: if we are effective, we are a participatory democracy as well. That principle would be somewhat undermined by an arbitrary mathematical solution to how many Members there should be.
Dr Julian Huppert (Cambridge) (LD)
If the hon. Gentleman is going to give us a long history lesson, will he at least assure us that he realises that Members of the House were elected using a transferable voting system until 1945 in some cases?
John Mann
There has never been an arbitrary mathematical equation. I would be ruled out of order if I went through an historical analysis of the Great Reform Act, why Cartwright brought it forward and its relationship to the rotten boroughs, including East Retford, so I shall not, but the principle was one of expanding democracy. There was representation before it, but it was the wrong kind of representation. The principle was about participation; it was in the evolution of participatory democracy that this country led the world—not representative democracy, which we already had. The definition of democracy was changed by the Great Reform Act into one of participatory democracy and has changed over time into one in which all citizens over the age of 18 can participate.
Pete Wishart (Perth and North Perthshire) (SNP)
The hon. Gentleman is talking about mathematics, so here is some maths for him: 70% of MPs in Scotland are from the Labour party but they secured only 42% of the vote. I know that he is a fair man and I feel the pain of the citizens of Warsop, but does he agree that there is something wrong with that?
The Second Deputy Chairman
Order. We are discussing the number of Members of Parliament in the House, not how they got here.
John Mann
The hon. Lady asks an excellent question and I shall give her a precise answer: Parliament should do so on the same basis on which it has been done before. The principle previously and now, unless this rotten Bill, particularly this part of it, is made into law, is that the House sets an ideal target, but that the Boundary Commission independently determines the boundaries within which each Member will sit using a set of criteria that relate to the history of the country, the four nations, the history of England, locality and the nature of our democracy. But that principle will be thrown out by the Bill. With the Great Reform Act, there were riots in Nottingham and years of deliberation before the Act was passed and changed the principle to one of participatory democracy and the wider franchise. Are we to break that principle after a couple of days of truncated debate in the House? Are we to have a principle, which could stand in perpetuity, of having a fixed number of MPs? The idea that we would do that is a disgrace to the House and to the traditions of our democracy.
This principle is important and the consequences are great, so let me illustrate them. I have none of the fears that the hon. Member for Christchurch (Mr Chope) discussed about the precise boundaries in my area. The boundaries were changed in the last election and my majority went up against all the predictions, so I have no fears about any such change or about who will come in and who will go out.
Of course, my constituents would strongly resist the notion that, having built a relationship with one Member of Parliament, good or bad, they should not have the opportunity to re-elect or dismiss that Member of Parliament. That principle is enshrined in our democracy, but it is endangered and partly thrown away by the arbitrary nature of setting a mathematical equation to determine the numbers. My constituency boundaries are a good example of how that would destroy the traditions of England and English democracy.
Ministers laugh at the fact that the county of Nottinghamshire, the seat of Bassetlaw and the electoral representation in Bassetlaw and Nottinghamshire have been set over the centuries, not in a few minutes or a few hours’ debate, but by the very nature and history of this country. Do hon. Members know why the seat of Bassetlaw was created? Because it was a road through the forest and a route through the country. That is why Robin Hood was robbing in such places. The history and geography of this country, going back hundreds and thousands of years, have produced the shire counties.
Should my constituency’s boundaries be changed arbitrarily? My situation is not unique, but it emphasises the nature of an arbitrary mathematical solution. My current boundaries and electorate are about the mean—it is not a small constituency—but a change to the south, which is precisely what has happened before, would be a change within Nottinghamshire. One bit goes in; one bit goes out. That is how the Boundary Commission has done its work over the decades. That is reasonable. It makes its decisions. I disagreed with the last one, but that is democracy: an independent body, not politicians, heard representations and made its decisions on the basis of trying to maximise equality between the seats in Nottinghamshire. That is why that change took place. Any change to the north would take us across a regional boundary—Ministers will not be bothered about regions—and a county boundary as well, into Yorkshire. I have nothing against the people of Yorkshire. That is where I come from. I am sure that I would be as popular there as I am in Nottinghamshire, so that is not the fear.
I deal with Nottinghamshire county council, Nottinghamshire police and Bassetlaw council in Nottinghamshire. The fear of the elected Member is that if we had to move over to an arbitrary base of different councils and authorities, however they are formulated by whichever Government are in power, we would be looking in different directions at once and the role of MPs in advocating for and representing their constituents would be significantly diminished.
It is not just the boundaries with Yorkshire that could be changed; there could be a change to the east, in which case we would go into Lincolnshire, perhaps into North Lincolnshire or West Lindsey council—again, entirely different local government, police and health set-ups. Of course, if the boundary was changed to the west, we would go into Derbyshire, yet another county and yet another set of police and fire authorities.
All that illustrates the point that if we do not attempt, in any system, to try to maintain as much as we can the integrity of the English counties and a direct relationship with local government, however it is structured, the role of the MP and the credibility of Parliament are diminished. That is the weakness in arbitrary mathematical equations, and it is why we all know that the Boundary Commission is in reality horrified by the notion that it would need to use some kind of mathematical equation, because the criteria that it has used over the decades have been proven. They are transparent and challengeable in the courts if anyone wants to challenge them—people have occasionally tried to do so. They are tested in the courts and they are good and rational. Each party might occasionally object to the conclusions and MPs might feel that we have been badly done by, given the nature of the change, but the process is democratic. That fundamental principle is being changed.
Gavin Barwell
The hon. Gentleman speaks with great passion, but I am not sure what his speech has to do with the amendment. He objects to the plus or minus 5% rule, which could cause constituency boundaries to cross county boundaries, but there is nothing intrinsic whatsoever in a reduction from 650 to 600, the subject of the amendment, that would have the effect that he suggests.
John Mann
The hon. Gentleman is under the misapprehension that we have a statutory limit. At the moment, we have a Boundary Commission, and the setting of an absolute figure will tie its hands, which is precisely why there could be arbitrary boundaries in a constituency such as mine, crossing county boundaries and breaking up the integrity of the English counties. That will do nothing for our democracy.
Some in this House feel that a smaller number of Members will be good for democracy, and I share some of the concerns and think that we could go much further than down to just 600 Members, but the process should be done rationally and over a significant period. In other words, there should be full consultation and thought, and the Boundary Commission should be allowed to do its work in its normal way. Politicians, for whatever reason, should not attempt to fix the result. By fixing the result, the sting in the tail not only for Liberal Members, but some Conservatives is the notion that has been sold to some Back Benchers—that a change will be bad for Labour. But any mathematician can analyse the information and show that that may well not happen in the boundary review. Given the arbitrary nature of mathematics, the opposite may well occur. In fact, any change may well have a neutral effect overall.
Nevertheless, that is the principle, and that is why the Government are rushing the measure through. But to sacrifice the English counties and the basis of our democracy simply for short-term expediency—in order to rush a Bill through and not allow the independent Boundary Commission to do its job in any way—is an outrage to our democracy, and I suggest most humbly that any decent democrat should withdraw those proposals immediately.
Martin Vickers (Cleethorpes) (Con)
This is the first time that I have spoken to amendments in my name—amendments 227 and 228 are the two to which I refer—and it is unfortunate that on this first occasion I should do so against my Government, of whom I am an ardent supporter. I appreciate that this might not be a career-enhancing move, but I feel particularly strongly about the issue.
It is irrelevant whether the number of MPs is 600, 620 or 585; it is foolish to put the Boundary Commission into a straitjacket and say, “There will be that number, with no variation.” Many Members from all parts of the House will have been involved in boundary reviews, whether at constituency or ward level, and they will appreciate that the jigsaw never fits together. Equality is desirable, but it should not be the sole criterion.
I agree with the comments that have been made about community identity, but this is about more than just figures. The ancient county boundaries have been mentioned too, and they are particularly important, but my constituency completely surrounds the constituency of Great Grimsby. The hon. Member for Great Grimsby (Austin Mitchell) has left the Chamber, but it is always a pleasure to hear him speak, particularly as he is my Member of Parliament. He made a reasonable argument, but it is completely out of touch with the people whom he represents, because, in line with the manifesto on which I stood, I am actually in favour of reducing the size of the House. I see no objection to that whatever.
Tristram Hunt
I do not wish to speak for too long, because we need to get on to the Government’s plans for the immolation of the Duchy of Cornwall. However, I do want to speak in favour of amendments 364 and 259. I want to focus on the rationale for the move from 650 MPs to 600. Like many other Opposition Members, I am in favour of broader equality between the electorates in our constituencies, and as a result, I am potentially in favour of a reduction in the number of Members of Parliament. However, as we have clearly seen, if anyone could have come up with a way not to do it, it would be the Bill before us.
We have heard from the Deputy Leader of the House that the intellectual rationale behind the move from 650 to 600 was that it was an arbitrary number, but seemed to have some magic. I am no scientific rationalist, but it seems to me that that might not be the most sophisticated way in which to develop public policy—particularly on something with such dramatic consequences. I suggest that if we are to move from 650 to 600, we need a greater purpose than that.
If we wanted to begin the process with some degree of intellectual consideration, we might begin to think about the role and function of Members of Parliament—what we want them to achieve, and their roles in the community and in the House. We might think about demographic changes, the move from market towns to cities, migration or citizenship. We might think intelligently about the future, and what the role of the Member of Parliament should be in it. As a result of such consideration, the number of Members of Parliament might go up or down. Having worked out that fundamental principle, we might begin to think of a point to which we wanted to head, over the course of Parliaments—but we might not have pulled all that together in a shoddily constituted Bill, rammed through this place with no pre-legislative scrutiny, especially as it deals with what I would have thought was a rather important matter of public policy for this House, and as we respect our democratic traditions, which are admired right around the world.
Thomas Docherty
My hon. Friend’s knowledge is second to none in this House. Can he tell me, as someone who is not as knowledgeable, whether he can think of an example from the past when there has been a review of the number of constituencies that has been as rushed or ill-thought-out as the one that we now face?
Tristram Hunt
My hon. Friend asks a very good question. My lack of historical knowledge comes to the fore, because I can think of no other example. Perhaps the Rump Parliament would come to mind, or some other innovations during the 1650s. I think that we are seeing certain Cromwellian attributes appearing among those on the Government Benches. Like many others, I am new to this place, but I understand that we used to hear a great many lectures from Members who are now in government about the right to discuss public policy at length and not to have it rammed through.
The Conservative manifesto, about which the hon. Member for Christchurch (Mr Chope) spoke so eloquently—unlike some of his colleagues, he actually still believes in what he stood for at the election—suggested reducing the number of Members of Parliament to 585, while the Liberal Democrat manifesto went for 500 seats. On the principle of compromise and the coalition agreement, one would have thought that they might bisect the two figures—that there might be a rationale for 542 or, if we are generous, 543, to allow the Isle of Wight to remain whole. But no, they have gone for the magical figure of 600, without any real rationale.
Some of the arguments this evening have been about making politics cheaper. Without making a cheap joke, I think that the coalition has made politics cheaper. It has cheapened public debate by reneging on pretty much all its other manifesto commitments over the past few months. We are told that this is potentially going to save £12 million—but we have not been given the costings for the packing of the House of Lords, which is proceeding as we speak. We do not know the full costs of the referendum. It is particularly apposite, on a day when we have heard about so many cuts in other parts of the budget, that we are allocating money to that.
Mr MacNeil
Is there not a great danger, with the moves that are being made, that we will end up with a democracy that has, as a percentage, fewer elected Members and more appointed legislators than we had before?
Tristram Hunt
I thank the hon. Gentleman for that point. It is extraordinary to have begun this process without thinking about the interrelationship between this place and the other place. One does not have to be a Newtonian to think that for every force there is an equal and opposite counter-force. [Interruption.] I am hearing more and more sedentary comments from the Deputy Leader of the House; I do not know if that is the usual form from him.
One would have thought that all these things would be pulled together in an overarching Bill that had some degree of intellectual credibility in terms of the British constitution and the role of this place and the other place. Instead, we have an arbitrary figure of 600, and meanwhile many more people are being placed in the House of Lords. The international comparisons steadily fall away when we think about the federal structure of many other European nations, local rates of representation in many other European nations, the interrelationship between the two parts of bicameral Parliaments, both nationally and internationally, and the role of Members of Parliament today in terms of the volume of work that they do.
The move from 650 to 600 will be an extraordinarily speedy process. I have had the great pleasure of sitting with some other Members present in the Chamber on the Political and Constitutional Reform Committee, and we have heard time and again from independent witnesses, scholars and constitutionalists that the speed of this process is unacceptable and will lead to mistakes. Lewis Baston, from Democratic Audit, said to the Welsh Affairs Committee:
“I am concerned about the speed with which this is being brought through. It seems to be an absolute priority to get the new boundaries in place for 2015, rather than to get them right and to consider some of the principles involved. I would much rather we did this properly.”
Many Members share that view.
Above all, the problem with the arbitrary collapse from 650 seats to 600, as my hon. Friend the Member for Bassetlaw (John Mann) so eloquently and brilliantly enunciated, is the total absence of sentiment or feel for the nature of either the United Kingdom or the British constitution. The UK is not something to be placed under a slide rule and arbitrarily cut up on the basis of a figure of 76,000. There are interrelationships of complex formations between Wales, Scotland, England, the Isle of Wight, the Isles of Scilly and the historic Duchy of Scotland—[Interruption.] Or Cornwall, even.
It surprises me all the more that the move from 650 to 600 is being driven by the Conservative party, which I had always thought was interested in tradition, identity, locality and community rather than in utilitarian butchery of the historic constitution of this country. We have been here before; one would have thought that the Conservative party might have learned the lessons of Edward Heath, but it seems to be intent on repeating them. The grotesque local authority rationalisations of the mid-1970s were done on exactly the same principle of utilitarian Benthamite thinking, with no feel for locality or historic identity. People did not like them and rebelled against them. The Bill has blown apart the “big society”, because there is no sense of locality, identity or tradition in it. Instead, it is rampant Cromwellian statism.
I believe that the reason for the arbitrary figure of 600 is simply that it is a big round number, and the Government thought it made sense. I suggest that this place deserves slightly more thought to be given to that matter. The arbitrary move to 600 was not in the manifesto of either of the governing parties, and it has no popular mandate. As a result, I am more and more convinced that the other place has no obligation to adhere to the Salisbury convention and pass the Bill. There is no popular mandate for the change, so we might lose temporarily in this House, but I hope the other place will help us win the war—even as the Government, shamefully and against the constitutional principles of this country, continue to pack it.
Mrs Laing
It is a great pleasure to follow the hon. Member for Stoke-on-Trent Central (Tristram Hunt), who is my colleague on the Political and Constitutional Reform Committee. I disagreed with almost everything he said, but he almost had me persuaded when he talked of Benthamites and Cromwellian statism. I am not a Benthamite, and I am not a statist, but—[Hon. Members: “Come over here!”] No, there is more coming. His argument was the most powerful and coherent that we have heard this evening. However, one point was missing, which was the integrity that equalising seat sizes and constituencies will give this place.
Only two issues really matter in relation to this group of amendments, although we have heard much special pleading, not from the hon. Gentleman but from other Members who are clearly concerned about their own constituencies and positions and how their political future might develop if these changes are made to the constitution. That is not what we should be discussing. We should be discussing principle, as the hon. Member for Stoke-on-Trent Central just did.
Mrs Laing
I cannot resist the hon. Gentleman’s sedentary comment. I believe that there is something about 666, though I am not an adherent to that principle either—for me, it goes with Benthamism. I am therefore glad that we are not discussing 666, but why not 600? It is a reasonable, round number. We have to choose a number for Members of Parliament. [Hon. Members: “No, we don’t.”] I am arguing that we have to choose a number; that it is correct for Parliament to do so. We have talked much about the Great Reform Act of 1832, but the subject of how many Members there should be has not been properly discussed for a long time.
Mr Andrew Love (Edmonton) (Lab/Co-op)
The hon. Lady speaks about principles. Should it not be a principle of the measure, since it proposes a change in our constitutional arrangements that is unprecedented in modern times, that at least some public consultation and cross-party discussions take place before anything comes before the House?
Mrs Laing
This is a cross-party discussion. We are all here in the Chamber having an open, cross-party discussion. There has not been very much time to consider the Bill, but there have been several months. The Select Committee on Political and Constitutional Reform has examined it, and we have all received e-mails, letters, papers and so on from people around the country who are concerned one way or the other. There has been consultation—that is why we are here. The debate that we are holding at this very moment is consultation. It is right that we have that discussion, and that the House makes a decision about numbers.
I put it to the Committee simply that 600 is a perfectly reasonable number. It is hard to argue against it unless one is doing special pleading on behalf of one’s constituency or county. The hon. Member for Stoke-on-Trent Central spoke eloquently about our country’s development, traditions and communities. Communities and traditions develop once boundaries are drawn. My constituency has a part in the north and a part in the south that have little in common with one another, although they are not far apart. However, they join together as a constituency and a district. If another part comes in or goes out, that becomes the community. Communities evolve, and nothing in the Bill will destroy the traditional counties of England.
Thomas Docherty
I thank the hon. Lady for being as gracious as ever in taking interventions. Obviously, she and her new-found Liberal Democrat friends are passionate believers in localism. How does not holding public inquiries and arbitrarily forming constituencies sit comfortably with her idea of localism?
Fiona Mactaggart
I share the hon. Lady’s concern about democracy. I am the only Labour Member of Parliament in Berkshire and I have substantially more constituents than any other Berkshire Member, so I cannot be accused of special pleading. However, if the ambition is to get equal-sized constituencies—I share the hon. Lady’s belief in that principle—would not it be better to do it in a way that respects local communities, and to do it slowly, over time, thereby producing the number? I suppose the Conservative party would normally describe that as “evolving.” Would not that be preferable to—to borrow a phrase from my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt)—the Cromwellian hatchet that cutting 50 seats constitutes?
Mrs Laing
I agree in principle with everything the hon. Lady says, but I would argue that three years is quite sufficient time for the Boundary Commission to undertake the task before it. The decision on the principle of the work going ahead can be taken in the Chamber over these few weeks of discussions on the Bill, and three years is quite long enough for the commission to do its work. The hon. Lady agrees with me on the principle of equalisation. Once a principle is established, it ought to be put into practice as soon as possible. Three years is plenty of time.
Mark Durkan
The hon. Lady says that 600 is a reasonable figure in the same way that the Independent Parliamentary Standards Authority asserts that the figures it comes up with are reasonable. The problem is the rigid application of that reasonable figure, which will give rise to all sorts of problems and contradictions for which this House will be blamed.
Mrs Laing
I have been insulted many times in this Chamber, but I have never, ever been compared with IPSA before. I entirely disagree with the hon. Gentleman. There is proper consultation. Opposition Members speak as if the Boundary Commission is not involved in the process, but it is, and it has three years to do its job. It is perfectly capable of doing that job. The resources are in place and there is no problem.
Thomas Docherty
I am fascinated by the hon. Lady’s new-found passion for quangos, which is perhaps a good description of the Boundary Commission, because it is unelected. However, does she accept that crucially, the Government are removing the public inquiry and the right of local people to give their input when the Boundary Commission has produced a report? That is not liberal or democratic, and it is not in the finest traditions of the Conservative party.
Chris Bryant
In that case, will the hon. Lady explain why somebody might have said this at the Oxfordshire boundary inquiry in 2003:
“Somebody might take the view that…there are already too many Members of Parliament at Westminster. They may take the view, depending on what happens in the European constitution, that Westminster has less to do, with less MPs – I certainly hope that is not the case”?
That was the right hon. Member for Witney (Mr Cameron).
Mrs Laing
I am sure that my right hon. Friend meant what he said. I do not disagree with him—what he said is fine. The hon. Gentleman is forgetting that we are talking about an evolving political situation and an evolving world. As other hon. Members have said, the whole situation is evolving, which is why it is time for the House to look at itself, count its numbers and consider what is right.
The hon. Member for Great Grimsby (Austin Mitchell) and I had an exchange yesterday on alphabetical preferences on ballot papers, which is relevant to the proposal for 600 MPs. I am no longer concerned about alphabetical preferences. Since yesterday, when he said that he could call himself A1 Austin and I could call myself Mrs Aardvark, I am pleased to tell him that I have received, by e-mail, a proposal of marriage from a Mr Aaron Aardvark. I had to decline that kind proposal because I could not possibly involve the poor gentleman in the expense of marrying me in order to improve my electoral prospects. That would be gerrymandering and manipulation of the system beyond the call of duty. However, it was a helpful discussion.
The real principle before us this evening is one vote, one value. That is what democracy is all about. Every Member who is elected to this House should be elected by an equal number of voters, at least potentially—[Interruption.] Of course we have a tolerance level of 5%.
Phil Wilson
Nobody really disagrees with the point about equal-sized constituencies. What we are looking forward to hearing from the hon. Lady is an argument about why we need to reduce the number of seats from 650 to 600, other than that she likes the number 600. That is the only reason that she has given us. I like the number 650, and I will make an argument for why it should stay at that. I need an argument from the hon. Lady as to why it should be reduced to 600.
Mrs Laing
Why should it be 650? Why should it not be 700 or 542? Pick a number out of the hat, or do the lottery. Six hundred is a perfectly reasonable number and as good as any other number—[Interruption.] It is a workable number, and it is also reasonable to reduce the size of the House in the interest of a more efficient democracy.
Mr Andrew Turner
We have to be within a 95% to 105% range, and that may be reasonable, but some exceptions apply, including my constituency, the western isles and Orkney and Shetland. Can my hon. Friend explain what it is that makes the latter two right and mine wrong?
Mrs Laing
I am glad to say to my hon. Friend that it is not for me to answer that question, but I will give him my opinion, which counts as nothing more than that. We should achieve real equality and I do not think that we should have exceptions for Orkney and Shetland and the western isles. If we are having a simple arithmetical equality, we should stick to it.
Mrs Laing
No, I have spoken for long enough. It is important to stick to equality. Once that principle is accepted, it should be adhered to. Of course, we need to have a 5% tolerance for the sake of practicality and because the Boundary Commission must be able to apply the rules reasonably, but we should stick to equality. This House is about looking at the politics and the principle, not about special pleading for particular constituencies and particular Members and their convenience. I urge the Committee to accept that 600 is a perfectly reasonable number and that equalisation—one vote, one value—is the important democratic principle.
Mr Syms
Listening to this debate, one would think that something major and radical was happening to our parliamentary system. In fact, what is being proposed is an extremely modest change, which I welcome, because more radical change would be unwelcome to most Members of the House. We have heard a number of Members talk about boundary commissions and history, but the Boundary Commission is only a post-war invention. It is something that our country can be proud of, because it tries to draw boundaries in a neutral way, while taking into account local interest.
Phil Wilson
Can we not go for equalised numbers without reducing the number of seats? I am sorry to interrupt the hon. Gentleman’s love-in with the number 600, but essentially we need to hear an argument. Nobody is disagreeing that we perhaps need more equalised constituencies, but why reduce the number of seats, especially when the average number of constituencies since the war has been about 649 or 650? It has stayed at that level for 60 or 70 years. Why radically reduce it now?
Mr Syms
Most Parliaments set their own size—that is part of most constitutions—but two that do not are the UK Parliament and the Bundestag in Germany. The reason the Bundestag does not do so is that it has a list system to compensate the first-past-the-post Members, and when the German electoral commission looks at the arithmetic division of the proportional votes, to ensure that they are proportionate, it can adjust the size of the Bundestag, sometimes by up to a dozen seats. However, the history of this country is that, by and large, we have allowed the Boundary Commission to go out and draw up the boundaries, and then to come back with numbers. However, what happens is that there is creep. Every time we have a boundary commission, the numbers go up. [Interruption.] No, they do, with one exception, which is when the numbers for Scotland are reduced. On the whole, however, the numbers creep up. Therefore, with this Bill, we are being asked to give guidance to the Boundary Commission, so that it can go away and then come back with a report.
Chris Bryant
How can the hon. Gentleman explain, then, the fact that there were 659 MPs in the previous Parliament, while there are 650 in this Parliament? What he is saying is patently untrue.
Mr Syms
It is; it happened because of the Scottish reduction. The reality is that we need to build a slight reduction into the system, otherwise we will have a constant creep-up of the numbers. Is it very much more difficult to represent 76,000 electors than it is to represent 69,000? I do not think that it is terribly difficult—we have the staff and the commitment to do it. All that we are talking about is drawing up fair boundaries, with a modest reduction in the House, which is not going to make a major difference to most people in this House, except in Wales.
The problem with Wales is over-representation. There have been changes in Northern Ireland, where the number of seats was increased because the constituencies were very large, as well as in Scotland and England; Wales is the one part of the Union that is out of line. I understand the pain and difficulty that the proposals will cause in Wales, because there will be quite a radical change there, but throughout most of the UK, it will be a very modest change indeed.
John Mann
The hon. Gentleman’s argument would be more consistent if he were to tell us why he sees a problem arising if county boundaries in England are crossed. The moment those boundaries start to be crossed at random, we shall have an entirely different solution in England.
Mr Syms
The hon. Gentleman makes a good point. For historic reasons, it will depend on where any such changes might be made. This is one of the arguments that he will be able to put to the Boundary Commission when it brings forward its proposals—[Interruption.] Yes, he will; people will still have the capacity to make representations to the commission on the reports on the constituencies.
Chris Bryant
I am sorry, but the hon. Gentleman is wrong. People will be able to make representations only in writing, and they will not know what representations other people have made. They will not be able to inform their arguments through debate. Consequently, we shall not have the fullness of the public inquiry process that we have at the moment. With such radical changes being proposed for the whole of the country, surely it would make sense to maintain public inquiries.
Mr Syms
I do not agree with the hon. Gentleman. The system that is being brought in will provide for a 12-week period in which people will be allowed to make representations—[Interruption.] Twelve weeks is a long time. If there is real concern about crossing a county boundary, I am sure that parish councils, local authorities, MPs and councillors will be able to make full representations in that time, and that the Boundary Commission will be able to hear them and come to a decision.
Gavin Barwell
There has been hardly any discussion tonight about the existing rules. Will my hon. Friend put on record the fact that, under the rules under which the Boundary Commission currently works, county boundaries can be crossed?
Stephen Gilbert
As I understand it, the next group of amendments deals with cases of boundaries impinging on existing county boundaries. A number of Members are anxious to move on to that debate; it certainly affects my constituents in Cornwall, and I can see others in the Chamber, including my hon. Friend the Member for Isle of Wight (Mr Turner), who will have an interest in the matter. Does my hon. Friend the Member for Poole (Mr Syms) agree that that group of amendments will indeed deal with that matter? Perhaps we could move on to it.
Andrew George (St Ives) (LD)
Given that there will be two Front-Bench speeches in addition to other people speaking, and that two votes might be called on this issue, I fear that we might not reach the next group of amendments, although I know that people are anxious to debate those issues. I shall therefore keep my remarks brief.
There are two amendments in my name that are intended to probe the numbers issue. One would replace the figure of 600 with 500, and the purpose of that is to tease out the issue, although it has been reasonably well teased out already. We have debated the numbers and why we need to arrive at one hard and fast figure, rather than setting a number as a target or guide for the Boundary Commission to pursue.
Concern has understandably been expressed tonight about the rigidity of the drafting of the proposals, in that they offer no flexibility to take into account the whole range of factors that have been properly and articulately expressed so far. That straitjacket will result in antiseptic constituencies whose boundaries are perpetually mobile between each election, and I do not think that would be good for the House or for democracy. We want the Boundary Commission to have sufficient discretion to work towards a target while taking into account reasonable geographical, cultural and electoral issues.
We also want the Government to allow places collectively to make decisions for themselves, provided that they do not ask for any special favours. In other words, when it comes to numbers, those in Cornwall are not asking for favourable treatment, but for distinctive treatment. Having 600 Members might result in an MP representing Cornwall having to give up part of a seat in order to achieve proper respect for the boundary between Cornwall and Isles of Scilly. I specified the 500 figure in a private Member’s Bill in October 2003—part of a long campaign in which I have sought to demonstrate to the public that we can achieve efficiencies ourselves and save money.
The impact of devolution and the need to save money and to make international comparisons are issues that have been articulated well so far. I hope, however, that we will have an opportunity to move on to the second string.
Stephen Williams
I, too, will try to be brief, as I know some colleagues want to speak on the second string. This clause has huge ramifications, some of which I agree with—notably the equalisation of boundaries. We have just had an enormous boundary change in Bristol. I lost 30,000 electors whom I used to represent in 2005, but gained 30,000 electors from another part of the city at this election. The number of my electorate is pretty much the same as it was five years ago. It is 82,728, with my neighbour the hon. Member for Bristol East (Kerry McCarthy) representing 69,448 electors. Within the same unitary authority, one MP has 13,280 more electors to represent than another. That is surely an anomaly that has to be corrected. That is why I believe it important to have frequent boundary reviews, not 10-yearly or with even longer intervals as we have experienced before.
Phil Wilson
The hon. Gentleman says it is all about equalising constituencies, something people do not necessarily disagree with. Why, however, do we need to reduce the number of MPs to achieve that? We could simply divide the electorate by the number of MPs—irrespective of whether there are 650 or 600 MPs. We could equalise the constituencies on that basis.
Stephen Williams
I was just coming on to the reduction from 650 to 600, and I would like to offer some friendly scepticism to my colleagues on the Government Front Bench. The Deputy Leader of the House was candid enough to say that reducing the House of Commons by 50 Members was arbitrary, but I am even more concerned about this number being arrived at without full knowledge of the whole package of constitutional reforms that this coalition Government are going to introduce.
I know that the Deputy Prime Minister has an ambitious programme of constitutional reform for the future, but we do not yet know the detail. We do not know the composition of what I hope will be a wholly elected second Chamber. We do not know what its powers will be or whether it will reflect the four member nations and regions of the United Kingdom. That makes it difficult to deal with the issue raised several times by the hon. Member for Rhondda (Chris Bryant)—that of giving more recognition within Parliament to Wales. I think that could be dealt with more properly in an elected second Chamber than here. We still do not know whether more powers are to be given to English city regions. Full devolution has been granted to Scotland, Northern Ireland, Wales and to London, but English local government certainly needs radical reform and more powers.
We have heard about cost—I do not believe that it provides a good reason for reducing the size of the House of Commons—and about international comparisons. France, for instance, has 577 seats and Germany 622, but as we heard earlier, they have far greater devolved Administrations and Bristol’s twinned cities of Bordeaux and Hanover have enormous powers in comparison with those of my colleagues who run the city of Bristol.
Stephen Williams
That is the hon. Gentleman’s phrase and he has put it on the record.
The number of politicians to whom people in Bristol can turn is very small. I live in the Cabot ward of the city of Bristol—a ward I used to represent on Avon county council and Bristol city council. If any electors—any of my neighbours in Kingsdown—want to complain about an issue affecting them, they can approach me, their Member of Parliament, or Alex Woodman or Mark Wright, their two city councillors. That is just three politicians: those are the only people to whom electors can turn if they have concerns about Bristol matters, national matters or international matters.
Stephen Gilbert
I thank my hon. Friend. This brings me neatly to my intervention, which is made in the spirit of coalition politics. Given that I intervened earlier on the hon. Member for Poole (Mr Syms), I now intervene on my hon. Friend to remind him of the time.
Stephen Williams
Then there is the state commissioner of the county of Ingham, and then there are all the judges to be elected: two judges for the Supreme Court, one for the court of appeals, and the incumbent and non-incumbent circuit judges for the 30th district. There are also a number of state propositions like the referendum that we are discussing.
There will not be elections for all the officers and elected representatives on 4 November this year. There will be no elections for Lansing or East Lansing local councillors, for a directly elected mayor or a directly elected sheriff, or for the two United States Senators who could represent the people from the state of Michigan; and, of course, there will no election for the President or Vice-President, or for all the appointed politicians who help to run Michigan and the United States.
It is clear that a person living in Michigan could potentially turn to a huge number of politicians, both elected and appointed, to resolve their problems. In my city of Bristol, however, there are only three to whom electors can turn. If we are honest with ourselves, instead of worrying about the cost of politics we should admit that we actually do politics rather cheaply in this country. Rather than electing school boards, as they do in the United States, we have school governors—people who give their time freely to serve their communities. Rather than electing judges, we have either appointed judges or numerous magistrates who give their time freely as well.
A reduction to save costs does not seem justified to me, and it is not yet justified in the context of a wider package of constitutional reform both of this Parliament and of the way in which we govern our localities. I look to the Deputy Leader of the House for assurances that we will be given a comprehensive package of political reform to put this reduction into a proper context.
Mark Durkan
Like other Members, I am keen for us to reach the next set of amendments, so I shall make only a couple of points.
Arguments are being presented about whether there should be 650 Members of Parliament or 600. The problem that I have with all the figures—including the 585 suggested by the hon. Member for Christchurch (Mr Chope) and the 500 from the hon. Member for St Ives (Andrew George)—is that they result in just one sum: one magic, supreme and absolute number. That means that when we take away the holy trinity of the three protected constituencies, the boundary commissions must come up with figures that add up to 597.
That will have to be done in Parliament after Parliament, all the while taking account of changes in the numbers registering in different parts of the country, which will force boundary changes in every one of the four constituent boundary commissions. If there is a significant registration increase in part of England, Northern Ireland could lose a seat in the next Parliament. If there is a drop somewhere else, however, we might gain a seat. In each Parliament, therefore, we will be up a seat, perhaps, and then down a seat. In Northern Ireland, that will mean the boundary review will affect every single seat.
That will be one of the consequences of moving to this absolute figure of 600 and 600 only with no elasticity. To repeat a point I made earlier to the hon. Member for Epping Forest (Mrs Laing), I predict that we will end up questioning whether we decided on the change with too much urgency and as a result were left with a fixed, arbitrary limit and the tyranny of arithmetic—the insistence that one size has to fit all in spite of the reality and all other considerations. That will mean that we will end up with an IPSA-type situation for boundaries. In Parliament after Parliament, MPs will regret that they are dogged by all sorts of fairly arbitrary boundary changes that are driven purely by arithmetic and perhaps dictated by registration changes somewhere else. People in many constituencies will wonder why they are constantly having to go through such changes because of something that is happening somewhere else.
Should the Committee insist on going for diktats that will result in reviews having to be conducted every time and arithmetic for establishing a quota for seats, would there not be merit in amendment 228 tabled by the hon. Member for Cleethorpes (Martin Vickers), which takes 600 as a target figure but allows a margin of accommodation to the boundary commissions so that there can be as few as 588 seats and no more than 612? That margin of consideration would at least allow the boundary commissions to take account of the issues and pressures facing them. Under clause 10, the number of seats allocated to them will be fixed under the Sainte-Laguë formula.
Already the Government recognise that the absolute figure of 600—and all the other aspects of the Bill—cannot be fully applied in respect of Northern Ireland, so they have had to say that in Northern Ireland the seats can vary more widely than the 5% either side of the UK quota. Therefore, we can come in at lower than 5% or over 5%, so our constituencies can be more disparate. That proves that the hon. Member for Epping Forest is wrong in saying that there are no adverse consequences and that the rigid application will not be a problem. The Bill admits that the rigid application is a problem, and it means that Northern Ireland will not be getting equal constituencies. We will have much more disparate constituencies as compared with other parts of the UK. More importantly, we will have much more disparate constituencies in the Northern Ireland Assembly, for which there are six Members. Therefore, disparity of representation and of mandate will arise in, of all places, Northern Ireland and Northern Ireland only. That was not what was intended when this House, as well as everybody else, supported the Good Friday agreement and its provisions.
I therefore ask the Government to consider the very sensible recommendation in amendment 228. Its sister amendment 227 does not accommodate the situation in Northern Ireland, because it allows only a 2% margin of discretion. It should allow for at least 2% or at least one seat. If that could be inserted in the Bill, it would help.
Gavin Barwell
I want to start by agreeing with the hon. Member for Stoke-on-Trent Central (Tristram Hunt) who, unfortunately, has left the Chamber. He made the point that there is an irony in the positions that the different parties are taking. The Conservative party is making the progressive argument for greater electoral equality, while Labour is arguing the case for greater adherence to traditional community boundaries. One thinks back to 1982 when Michael Foot, then leader of the Labour party, and the Labour Chief Whip took the Boundary Commission to the courts because it had not crossed community boundaries and had not, in Labour’s view at that time, achieved sufficient electoral equality. For the benefit of my hon. Friend the Member for St Austell and Newquay (Stephen Gilbert), I shall make four short points about the arguments advanced in favour of these amendments.
We have been asked, first, why we should reduce the number of seats. I can speak only for myself and describe why I shall be voting for such a reduction. I was a candidate during the MPs’ expenses scandal and I carried out a survey of every elector in my constituency. I put to them proposals from all three political parties about things that could be done to improve our political system and found that the second most popular was that the number of MPs should be reduced. [Hon. Members: “To what?”] At the time, I proposed a 10% reduction; that was the figure in our manifesto and I would happily have supported it.
Gavin Barwell
I shall make some progress. I recognise that the coalition has proposed a slightly different figure, but it still represents a reduction and I am happy to support it.
The second argument that has been advanced relates to whether we should have a fixed number of seats. We have heard a great deal of enthusiasm for the current rules, although I am not sure how many Members have read them. As I was saying to my hon. Friend the Member for Poole (Mr Syms), they allow the crossing of county boundaries. However, Members may not be aware that the Boundary Commission and the Committee on Standards in Public Life implored the previous Government to change those rules because they are contradictory, confused and muddled. Therefore, some of the enthusiasm that we have heard for the current rules is misplaced, and it is not unreasonable for Parliament to take a view on what the size of this House should be.
I am not a lawyer, but I can say that the amendment standing in the names of the right hon. Member for Tooting (Sadiq Khan) and the hon. Member for Rhondda (Chris Bryant), among others, is defective. It seeks to amend the first paragraph of proposed new schedule 2 to the Parliamentary Constituencies Act 1986 in a way that would wholly contradict proposed new paragraph 2(3) of that schedule, which would define the United Kingdom electoral quota in a completely different way.
The third point to deal with is the assumption expressed by Labour Members that a reduction in the number of constituencies and, thus, larger constituency sizes will lead to seats that less reflect community identity. That shows a fundamental misunderstanding of how this measure will work, because although that assumption will be true in some cases, in others the measure will lead to constituencies that better reflect community boundaries. Under these proposals, instead of having three MPs covering my London borough of Croydon, we would have three and a half, so the new seats would be likely less to reflect community identity in Croydon. However, the next-door London borough of Bromley covers three and half constituencies and that would reduce to three, which would doubtless better reflect community identity.
Thomas Docherty
I understand that the approach will be to start at the south coast of England and work north, so there will be no understanding at all; even within London, that is how it will work.
Gavin Barwell
The hon. Gentleman’s understanding is incorrect. I understand that this will be looked at on a regional basis; the work will be done in the nine regions of England and then in the other nations of the United Kingdom. The work will not be done all across the country—I think that that would be technically impossible to carry out.
Gavin Barwell
I shall make some progress, because I promised to be brief.
The fourth argument advanced is that MPs will not be able to cope with the larger constituencies, and the Deputy Leader of the House has already rebutted that argument forcefully. Many Members in this House, including my two Croydon colleagues, already have significantly larger constituencies than those envisaged under this Bill and cope perfectly well with those arrangements. However, I hope that my Front-Bench team will have given some attention to two points that have been made by Labour Members. The first relates to the size of the Executive relative to the size of this House, and the Government definitely need to consider it. The second point is that it would be perverse to decrease the size of this House while increasing that of the other place. I hope that the Government will soon introduce proposals to enact the coalition’s proposal for an elected second Chamber.
John Thurso
On the hon. Gentleman’s last point, I could not agree more about an elected upper House. He was also making a point about difficulty, but that does not come from the number of constituents. I would have no problem in taking on a further 30,000 constituents, but I have a problem when I have to take them on 200 miles away.
Gavin Barwell
The Bill contains criteria about the maximum geographical size of constituencies. I observe, in passing, that one member of the Australian Parliament represents a constituency in western Australia that is about the size of France, and I believe that the Australian Government provide a light aircraft to enable that to be done.
In the interests of time, Mr Evans, I shall draw my remarks to a close. I merely say that the arguments put forward by those on the Opposition Benches against the reduction in the size of this House do not hold water. My constituents want to see a reduction and I shall be happy to support the proposal to do so.
Mr Heath
On the very last point that the hon. Member for Croydon Central (Gavin Barwell) made, I think I recall that there is a Senator in the Italian Senate who represents Australia, Asia and Africa. That is a sizeable constituency and not one that I would suggest for this House.
This has been an interesting debate in many ways. First, I am glad that we have had the opportunity to have the debate on the clause at all. Had the attempt by the hon. Member for Rhondda (Chris Bryant) to vote down the programme motion yesterday been successful, we would not have had a debate at all. I am also pleased that we have had the extra hours this evening, because had the hon. Gentleman succeeded in voting the motion down, we would not have had them. Unfortunately, he then—again—filled the extra time with the 50 minutes of his speech.
I am also pleased because we have had a number of what I would consider to be doctrinal statements made. We had a doctrine laid out by the hon. Member for Rhondda for a new principle of consideration for constitutional Bills, in which we should allocate one day on the Floor of the House for each clause of a constitutional Bill. I recall the Constitutional Reform and Governance Act 2010, in which I was involved, as were many other hon. Members who were in the House at the time. It had 95 clauses and eight schedules and it had three days in Committee. That was what the Labour party did when they were in Government and it ill behoves them to suggest that the greatly longer time that we have given this Bill is insufficient.
We also had discussion about what the Salisbury-Addison convention might mean. I have a quotation from the former Lord High Chancellor—I do not know whether it is a ex cathedra statement, but it certainly approaches that—about how the House of Lords ought to apply its own judgment on the Salisbury-Addison convention in the context of a coalition. This is what the right hon. Member for Blackburn (Mr Straw) had to say in 2006:
“My own view is that if any coalition or arrangement as in 1977 gains the support of the democratically elected House and is endorsed by a motion of confidence then the programme for which they gain that endorsement should be respected by”
the House of Lords. That is an extremely helpful endorsement that may be noted.
The other place was mentioned several times in the debate on these amendments. It was mentioned first by the hon. Member for Cities of London and Westminster (Mr Field) and then by the hon. Member for Stoke-on-Trent Central (Tristram Hunt), who is not in his place at the moment, who suggested that the Government were packing the House of Lords shamefully. For the record, let us say that 56 peers have been created since the election, of whom 29 have been Labour peers created on the proposition of the outgoing Prime Minister. If we are packing the other place, we are doing so remarkably ineffectively by inserting Labour peers.
The issue about the future of the House of Lords is an important one in the context of this Bill, as it is within the whole constitutional settlement. We are committed not only to an elected second Chamber but to a smaller second Chamber. It is precisely that work that is now being taken on in earnest for the first time in 100 years. The previous Liberal Government said very clearly in the preamble to the Parliament Act 1911 that they wished to see an elected House of Lords. That has been taken on by the Deputy Prime Minister with the all-party talks and we expect to introduce legislation early next year to bring that into effect.
Mr Heath
Because this is a Bill about the House of Commons. The House of Lords will be dealt with in different legislation, which the hon. Gentleman will see in due course. His right hon. Friend the Member for Tooting (Sadiq Khan) is involved in the discussions. The hon. Gentleman will have to wait. One of the lessons that we should have learned by now is that if we wait for every constitutional change to be made at once, nothing happens. That is what has prevailed for the last 100 years. We are going to change that.
The arguments that I hear about the future of the House of Lords have been strangely echoed in the arguments I heard this evening about this place. An argument that is regularly heard in the House of Lords is that any system that managed to appoint a peer as fine as the person who is speaking must be an exceedingly good system that does not require further change. We heard a bit of that this evening. We heard that any system that elected the current Members of the House must be an exceedingly good system and does not need to be changed. Various hon. Members explained how the numbers that precisely apply to their constituency are evidently the right numbers and should not be changed.
We have had the NIMPO—not in my period of office—argument, with Members saying, “Of course, we all want to see the House brought to a smaller size, but not while I’m still here. Wait until I’ve retired and then you can do it.”
We have also had the impossibility argument, with Members saying, “It is quite impossible to reduce the House from 650 to 600 Members because the electoral quota that would be in place, with 76,000 electors, would make it quite impossible for Members to do their work”, completely ignoring the fact that one third of current Members have constituencies of 76,000, or within a margin of 5% of that. The hon. Member for Great Grimsby (Austin Mitchell) said that it is impossible because there would not be enough time to do all the jobs that a Member of Parliament has to do. I would be more persuaded by that argument if I felt sure that every Member was a full-time Member of Parliament and did not find other employment—some excessively so. Such Members have contributed to the debate. Apparently, the shift from a constituency of 60,000 to 76,000 would make the job impossible.
We heard from the hon. Member for Bassetlaw (John Mann) that the job is impossible to do if one represents a constituency that crosses a local authority boundary, but how many Members have constituencies that do that? Apparently, it would be impossible under the quota that we are suggesting.
Mr Love
The hon. Gentleman is criticising the arguments that have been used by the Opposition, so may I address the arguments that the coalition Government have used? I have read the Political and Constitutional Reform Committee’s report on the Bill. Having considered every argument that had been made, the Committee, which has an in-built coalition majority, concluded:
“There may be a case for reducing the number of Members of the House to 600, but the Government has not made it.”
Can the hon. Gentleman make such a case tonight?
Mr Heath
The hon. Gentleman will have to wait until I get to that point in my remarks, because I have a few other comments to make on what others have said in the debate.
We have heard not only that it would be impossible for Members to accommodate extraordinary constituencies of 76,000, despite the fact that so many of us do it, but that it would be impossible for electors in such constituencies to know who their MP was. We have heard that it would be impossible to have a career structure because anyone who had experience outside the House could not be elected if we had constituencies of 76,000. What an extraordinary proposition that is.
The final proposition was that this is all a partisan move—[Hon. Members: “It is!”] The Opposition say that it is a partisan move to reduce the number of Labour MPs, but we have also heard from the same side in the same argument that it will not reduce the number of Labour MPs. So, we are gerrymanderers, but we are totally incompetent gerrymanderers because we are reducing our own seats and improving the position for the Opposition.
Again, I find it extraordinary that people whom I believed were reasonably intelligent and reasonably numerate can imagine that reducing the size of the House from 650 to 600 means that the 50 smallest seats are the only ones that disappear—they just go puff and disappear into the ether—and that all the rest carry on as they were. The suggestion is that the fact that most of the smaller seats are Labour seats shows that this is a partisan move against the Labour party. I am sorry; I just do not accept that. I do not think that it is a logical argument.
Phil Wilson
In a debate last night, the hon. Member for Epping Forest (Mrs Laing) proved to me that this is a partisan move, when she said that some hon. Members oppose it because they are
“trying to avoid being turkeys voting for Christmas.”—[Official Report, 19 October 2010; Vol. 516, c. 908.]
That is what the Conservative party is saying.
Mr Heath
I am addressing the arguments made in the Chamber tonight that suggested that the reduction from 650 to 600 was an unimaginably ambitious target for the House and would result in the loss of Labour seats and was therefore a partisan move, rather than being what it is: a modest reduction in the size of the House. We have discussed other sizes of the House. The Conservative and Liberal Democrat manifestos proposed a reduction in the size of the House of Commons. The Conservative manifesto suggested the figure of 585, and the Liberal Democrats suggested 500, but on the basis of the single transferable vote.
I have made it absolutely plain that this is a matter of judgment. Six hundred is not a magical figure. I have never pretended that it is. It is an arbitrary figure, but it is one that results in an electoral quota of about 76,000, which is an entirely possible figure, as we have demonstrated, on the basis of the 2009 electoral register.
Mr Heath
The hon. Lady will have to be a little bit patient and not just stand there, but ask and then wait until I give way.
The country would like to see a reduction in the number of Members of Parliament in this House. We have tried to strike a balance between what is achievable and sensible in terms of the operation of Members of Parliament and what is desirable in finally turning the corner in terms of the ever-increasing size of the membership of the Chamber.
Susan Elan Jones
I am grateful to the Minister for finally giving way. He mentioned that the Liberal Democrats and the Conservative party proposed in their manifestos at the last election reductions in the number of seats. Various Conservative candidates in north Wales said, having cited Guy Fawkes among others, that people would probably think that the Guy Fawkes option was a good one, but we were then talking about a reduction of 10% of seats in Wales. When they were questioned, they said, “Yes, of course, it will be 10% of Welsh seats, because the new Conservative Government will be very rational in doing this.” How does the Minister justify talking about a reduction of, I think, 7.7% across the whole United Kingdom but a reduction of 25% in one of the component nations?
Mr Heath
I justify that very easily by the fact that Welsh constituencies are much smaller than constituencies in the rest of the country, and the Bill will equalise representation, as I thought we had established. As I keep on reminding the House, the existing position is that the hon. Member for Rhondda—I choose his constituency only because he happens to be sitting on the Opposition Front Bench—has 51,000 electors, my constituency has 82,000 electors and there is a difference of almost 30,000 between the two. That cannot be justified.
Mr Mark Field
I very much agree with everything that the Minister says about the equalisation of constituencies. Can he therefore justify why any exceptions are being made?
Mr Heath
Yes, I can. I can justify why the islands of northern Scotland are in a rather different position from the Cities of London and Westminster. I can explain why constituencies where, as the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) says of his, the distance from one end to the other is greater than the whole of Wales might be justifiably treated as an exception. I do not find that a difficult case to make.
Mr Reid
The Deputy Leader of the House has supported the Government line that a constituency with 22,000 electors and three islands is treated as an exception. Argyll and Bute has 13 islands with a public ferry service, and covers a land area of about 5,000 square kilometres, with an electorate of 67,000. If the benchmark is three islands and 22,000 electors, why is there not an exception for other constituencies with islands—13 islands?
Mr Heath
I understand my hon. Friend’s point, because his constituency is indeed a very difficult case, and the argument that he will make to the Boundary Commission in order to maintain as much as possible of his current constituency boundary will be a very strong one. I am sure that he will make that argument, but we have not moved on to the group of amendments in which we can discuss that issue, and I have to keep in order.
May I return to the basic principle? I am amazed, because there is an element of the Bourbons about some Members: they remember nothing of what has happened over the past year or so. Do they not realise that the public are desperate for us to reduce the costs of this place? Do they not understand that there is no public clamour for more Members, which would be the effect of the amendment in the next group in the name of the hon. Member for Rhondda? The public do not want more Members, they want fewer, and I believe that our proposal in this part of the Bill is entirely appropriate.
Mr Andrew Turner
I do not understand why it is necessary for the Minister, who wants to reduce the number of Members, to create more for my seat.
Mr Heath
It is difficult to maintain a process based on the equalisation of seats, and then to sustain the case that an island, which I accept has very particular characteristics of its own and is very large, but which, unlike Orkney and Shetland and Na h-Eileanan an Iar, is within near reach of mainland Britain, should be treated as an exception. However, the hon. Gentleman will continue to make that case, and I understand exactly why he wishes to do so. I know that he speaks for many of his constituents, although not all, and I am sure that he accepts that some of his constituents feel very strongly that the Isle of Wight has natural economic links with areas of mainland Hampshire, and that a parliamentary linkage could be of benefit. But of course, he represents 100,000 electors, and does so very well—
Mr Heath
I am addressing the Chair, and the Chair is seated at the Table, not on the Opposition Benches.
As I say, the hon. Member for Isle of Wight (Mr Turner) needs to continue to press his case. We shall listen to the arguments that he makes, but we shall also try to maintain the principle of a common—[Interruption]
The First Deputy Chairman of Ways and Means (Mr Nigel Evans)
Order. If hon. Members can be quieter, the entire Committee will be able to hear what Mr Heath is saying, so please calm down. We have only another 11 minutes left, as hon. Members know, before we need to move on.
Mr Heath
May I deal with the issues raised by the hon. Member for Cleethorpes (Martin Vickers)? He has a great deal of expertise on this issue, and I am grateful to him for contributing to the debate. He proposed giving the boundary commissions flexibility to vary the number of seats assigned to each of the four nations by a small amount. The flexibility proposed in his amendment 228—a margin of 2% on either side of the proportionate entitlement—would not work for Wales or Northern Ireland, as was recognised by the hon. Member for Foyle (Mark Durkan). It would not allow the commissions there to increase or reduce those nations’ allocations, as 2% of their national entitlement would not equal one whole seat.
However, there are more fundamental objections to the amendment. It would enable the Boundary Commissions for England and for Scotland to increase or decrease the total number of MPs in the House and the proportion of MPs who represent their part of the UK. Parliament should lay down clear rules for determining the number of constituencies, and they should be allocated to the four parts of the UK in proportion to their electorate. We are seeking equality between the nations as well as within them.
Finally, I want to deal with the amendments tabled—although not spoken to, obviously, because of his absence—by the Chair of the Political and Constitutional Reform Committee. They would require the Boundary Commissions to decide between themselves the size of the House at each review, until the figure of 600 was reached in 19 years’ time.
Mark Durkan
The Deputy Leader of the House told us that the figure of 600 was arbitrary. He has still not explained why an arbitrary figure has to be fixed in statute in perpetuity. If this is about creating equality between the component parts of the UK, why does the Bill say that constituencies in Northern Ireland can vary more widely, both among themselves and in comparison with constituencies elsewhere, than those anywhere else? That does not achieve what he says the Bill is supposed to achieve.
Mr Heath
We will have to differ on that specific point. I believe that what is proposed provides for a high level of equalisation across the whole United Kingdom. It is based on what is equitable for our constituents.
I return to the point about an incremental reduction, which was raised by one other hon. Member. I should like to make it clear that the issue was considered in the Political and Constitutional Reform Committee, and the secretary of the Boundary Commission for England reported that there would be no particular advantage to making the change incrementally. The commission also said that it had both the resources to carry out the review and sufficient time, before the deadline for submitting reports on 1 October 2013, to draw up constituencies for a House of 600 at the review. The suggestion that that is impossible to achieve in the time scale that we propose is not substantiated.
The Government’s proposals strike the right balance. They will end once and for all the fluctuation in the size of the House and the upward pressure on the number of MPs under the current legislation, and propose a modest reduction in overall numbers, which will cut the cost of politics, but do so in a way that will not result in constituencies that represent a departure from the type that we see in this Parliament. I hope that right hon. and hon. Members will feel able to withdraw their amendments and support the Government’s position.
Jacob Rees-Mogg (North East Somerset) (Con)
Mr Evans, thank you so much for calling me. It has been enlightening, educational and a real honour to listen to this debate since we last divided the House some hours ago. I have listened to some fine speeches. The hon. Member for Bassetlaw (John Mann) put his case with such pith and moment that I was almost persuaded to vote against my own side. The spectre that arose before us was one so terrifying and so fearful that we quaked in our Tory boots; it was the spectre of clause 9 leading us to proportional representation. The fear that came upon me was that as a result of setting a number so precise and clear that it could not be questioned even by the great and good of the Boundary Commission, we could face proportional representation. I saw other right hon. and hon. Members struck with fear at the thought, and I saw them feeling that they would move towards supporting greater flexibility.
My hon. Friend the Member for Cleethorpes (Martin Vickers) offered us an amendment that would meet almost every objective of Her Majesty’s Government but would still have flexibility—that great aspect of the British constitution, which has served us well since Alfred the Great, who was a Somerset man. I debate with my hon. Friend the Member for Somerton and Frome (Mr Heath) whether Alfred is more my constituent or his; I think, in fairness, that he would belong more to the Deputy Leader of the House. This constitutional flexibility is something that has been of great benefit to us. I feel that my hon. Friend the Member for Cleethorpes got it right in saying that it is useful for there to be some degree to which one can go outside the boundaries, without being too prescriptive.
On the subject of today’s speeches, what a fantastic history lesson we had from the hon. Member for Stoke-on-Trent Central (Tristram Hunt). To think that this was supposedly the least discussed reform of Parliament since the Rump Parliament, when Cromwell decided to send in the troops—the only man to send troops into the predecessor building to this House to enforce debate and Divisions. Some of us may think that the Whips are tough, aggressive and forceful, but even in my experience they have not used force, or pikes, to make sure that I go in the right direction. Oliver Cromwell did indeed do that; he prevented people from voting in that forceful way. The shadow Minister returned us to these matters again and again, and spoke for at least 50 glorious minutes—minutes that felt to me like days, but days of such pleasure, joy and rejoicing in spirit that I hope we will have another 50 minutes from him in due course, or on another occasion, or perhaps tomorrow, if we should be so lucky.
Let us return to the specifics of numbers. Should it be 650, or perhaps 649? Should it be 648 or 647?
Jacob Rees-Mogg
My hon. Friend would like to have more—perhaps it is a “points mean prizes” occasion. However, I think that 600 is not too bad a number. One hon. Member suggested 666—the number of the beast. It is worth being careful about the number 666, because if we read our Bible carefully there is always a footnote saying that other ancient authorities refer to 616. I am glad that my hon. Friend the Member for Cleethorpes set his limit at 612, clearly aware of the dangers of going as high as 616 and thereby finding that we inadvertently had in this House the number of seats that was the number of the beast. We know what that would mean: it would be deeply terrifying—almost as terrifying as the threat of proportional representation.
We had great discussions about the great and noble historical counties, and the wickedness of Humberside and suchlike. I would like to add that Avon was even worse than Humberside. Avon was an abomination—a foul creature disgusting in all respects, destroyed, I am glad to say, by the noble father of my hon. Friend the Member for Ipswich (Ben Gummer). In the numerical aspect, it is important to look at the hon. Member for Somerton and Frome in representing so many Somersetshire constituents. It seems important that the people of Somerset should have as much representation as the people of Rhondda—indeed, I think rather more, because we are from Somerset and they are from Wales. A few extra seats should be especially included, to give Somerset the representation that that wonderful county needs.
I will say just one final thing about seats, because time is getting on. In the Parliament of, I believe, 1392—let me just check that in my notes—no, the Parliament of 1362, one Member, a Mr John Wonard, represented two seats in Devonshire and two in Cornwall. It seems to me that the flexibility that the history of our nation allows ensures that the number will always come out right in the end. A right and suitable number we shall have, a fine and good number, a lucky number, perhaps a number that the—
The First Deputy Chairman
I ask the Serjeant at Arms to investigate the delay in the No Lobby.
The First Deputy Chairman
I ask the Serjeant at Arms to investigate the delay in the No Lobby.
Business without Debate
(13 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Television and Radio Reception (Thanet and East Kent)
(13 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text
Laura Sandys (South Thanet) (Con)
I thank the Minister for very kindly coming to the House to debate something that is not of obvious interest to people beyond myself, my hon. Friend the Member for North Thanet (Mr Gale) and, of course, the Minister himself. Although we aim to be unique in many ways in Thanet and have a huge amount to be proud about, turning on the television and watching the black snow on our analogue TVs or the even more annoying pixel scramble on current digital TVs is not something that we want to excel in.
Our world is often cut short in midstream: just as the first Chilean miner is released from his lair, we have not the popping of Chilean champagne but the crackle of our TVs with moonscape replacing celebrations; the final moment of “The X Factor” is suddenly replaced by the emergence of a screeching pixel reorganisation that makes chalk on a blackboard seem like an appealing noise; and can hon. Members imagine, when waiting for my right hon. Friend the Member for Witney (Mr Cameron) to emerge as Prime Minister in May, the sound from expensive and aggressively marketed digital radio cracking up on them? We in Thanet no longer want to be left at the end of the line or without a signal. We do not want to be left out of the action. We certainly do want to join the real televisual world, but as we are without reliable television, and with digital radio on the blink, we are yet again left out.
I thank all the agencies involved with TV and radio reception—BBC, Ofcom, Arqiva and my hon. Friend the Minister’s Department—for their work to secure better coverage. They have been striving to find solutions to the problem, but the local survey that my hon. Friend the Member for North Thanet (Mr Gale) and I undertook revealed that the problem was more severe than the authorities realised.
Broadstairs was seen as the black hole for TV coverage, and it most certainly is, but bad—really quite bad—coverage is not the exclusive privilege of Broadstairs. The harbour area of Ramsgate has very patchy coverage, and parts of Cliftonville get no coverage at all. North Thanet has its black spots, too, in Westgate and Westbrook. From our rough calculations, about 6,000 households throughout Thanet do not get adequate coverage, while some do not get coverage at all.
Those problems mean that Thanet is probably the largest population area without adequate television and digital radio coverage, and that has a human impact. I know of an older lady who is housebound in Ramsgate, pays good money for her TV licence—she does not yet qualify for her free TV licence—and can get ITV 1 sometimes but nothing else. I have had letters from residents of large retirement blocks that get virtually no coverage at all. Those who can afford it subscribe to Sky, but Thanet is the 64th poorest district in the country, so not everyone has that luxury.
Why should people pay a licence fee for the privilege of getting television if they are then forced to supplement it with additional fees? It raises questions about the legislation governing the licensing of televisions. Is it fair to license a box or a flat screen that is unable to receive anything? Should the licence not relate to whether the box can deliver its function—that of receiving television programming?
We would like to address two key issues: what we can do now to support our residents with better coverage and, possibly more importantly, what will happen following digital switchover. Today, analogue coverage is bad in some areas and poor in many, and digital services are very sporadic, with even Sky users unable to receive good coverage all the time. Digital radio coverage is also limited.
I know that my hon. Friend the Minister’s partners have been working hard on the matter, but I should welcome an update on the findings of the BBC’s reception assessment, which it undertook a few weeks ago after a request from my hon. Friend the Member for North Thanet and myself. It was excellent that the BBC was able to go down and undertake that work. I also understand that Arqiva is in talks with Thanet college about putting up a transmitter, and I should welcome an update on that option. If that is not possible, what other options, such as improving the signal from the Ramsgate repeater station, can be investigated?
Some immediate improvement would be most welcome, but the future digital switchover also concerns us, because the expert information that I have received does not indicate a smooth switchover in 2012. EURIM states that if the broadcasting infrastructure is not in place now, digital will not provide a significantly better service than we have today. The service will be a bit better, but not adequate. Mentor Technology, in its submission to the Culture, Media and Sport Committee report in 2006, stated that those areas with existing marginal terrestrial coverage with poor quality today might not receive any digital picture at all, and this year Digital UK stated:
“The digital television switchover programme will aim to ensure that substantially the same proportion of UK households that currently receive analogue terrestrial TV services will continue to receive public service broadcasting in digital terrestrial form. It will not directly address bringing digital television services to those who have not previously had access to analogue terrestrial services.”
Its website reveals that quite a few parts of my constituency will get only four to eight channels, with poor or no coverage for the rest of the channels. That does not bode well.
So we are calling on the Minister to address our existing and future reception problems. First, is the infrastructure in place to provide us with reasonable analogue reception? Is this about upgrading existing relay masts or adding new ones? In areas where new masts are difficult to install, can the Minister investigate the possibility of connection to the high-speed fibre optic cable running from Broadstairs to Canterbury?
Are we sure that the infrastructure will deliver full digital coverage at the time of switchover? If there are going to be pockets of limited or no coverage, what can the Minister do? Will there be a scheme of free purchase and installation of Freesat? If so, how will that be achieved through the planning process, given that we have several conservation areas? Given our current problems with the reception of Sky, even Freesat does not necessarily guarantee adequate reception.
If we cannot secure reception, what will happen to Thanet? Would anyone move their family to an area that did not receive TV? New essential services would be broadcast—would Thanet need a carrier pigeon system? Would we end up living in a cultural, entertainment and current affairs oblivion? Would my constituents suffer from not being able to see their local MP on regional news?
We need the Minister’s assurances that our situation will be significantly improved after switchover and that Thanet will not be yet again left at the end of the line. If we are not guaranteed proper digital coverage, I will personally ensure that throughout the World cup in 2014, the Minister is forced to join my constituents and me for an evening of popcorn, moonscape and French radio.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)
I congratulate my hon. Friend the Member for South Thanet (Laura Sandys) on securing this important debate on access to digital television and radio for her constituents. Her speech reflected her passionate work on behalf of her constituents on a whole range of issues. I know from conversations that we have had outside the Chamber how seriously she takes the subject of this debate.
I could find only one mistake in her speech: she said that the issue was of interest only to me, her and our august hon. Friend the Member for North Thanet (Mr Gale). However, I see that we are joined by my hon. Friend the Member for Camborne and Redruth (George Eustice) so, clearly, the issue stretches beyond the borders of Thanet.
I take an interest in this matter because I am the Minister responsible for it, but I must also put on record the fact that as a young child I spent every summer holiday in Ramsgate with my Auntie Joan and Uncle Freddy. Freddy Drake was the headmaster of St Clement Danes school, which I assume still thrives strongly, and he received an OBE, having served on the executive of the National Union of Teachers at a time when that trade union was an august and responsible body.
Let me return to the subject before the House tonight, however. I shall start with the national picture. We continue to make good progress on the digital switchover, and by the end of August almost 7 million people, representing about 25% of UK homes, will have completed the switchover, and a further 10.5 million homes will switch next year. It has so far been an almost flawless process, although ironically the only glitch to have occurred so far took place in Oxfordshire, where the new digital TV aerial burned down, thus affecting television coverage for thousands of my own constituents for six months. As a constituency MP, I have some experience of what it is like when constituents are not receiving a good television signal. Next year is going to be equally challenging, with 21 regional switchovers and 25 retuning events. An enormous amount of planning is going into making switchover a success, and I am confident that nationally the TV switchover programme will continue to remain on track.
The status of the digital radio switchover, to which my hon. Friend also referred, is slightly different from that for digital TV. While we are fully committed to securing a digital future for radio, we believe that a digital radio switchover is the right way to deliver a co-ordinated transition. However, we have not set a specific date for digital radio switchover, although we have agreed that 2015 should be the target date. We have also set out a robust digital radio action plan to take this forward.
I want to concentrate my remarks on the issues in Broadstairs that my hon. Friend highlighted. As I say, it is good to see my hon. Friend the Member for North Thanet, who has represented his constituents so assiduously for many years, here too. As my hon. Friends are aware, Ofcom is responsible for ensuring, as part of the switchover process, that digital terrestrial TV coverage is substantially the same as existing analogue coverage, but analogue covers only 98.5% of the population. It is therefore important, as the starting point of this debate, to recognise that there is, unfortunately, no absolute right to TV coverage. People who currently live outside the analogue coverage area and want to watch television sometimes have to incur additional costs, whether by getting a specialised aerial or another TV platform such as satellite. That does not just mean Sky, as Freesat is now also available.
Nevertheless, it is obviously common sense that we want as many people as possible to have access to a service which the vast majority of the population enjoys, and Ofcom is doing all it reasonably can to ensure that viewers have access to digital terrestrial TV after switchover. There are inevitably constraints, not least the availability of suitable frequencies. In respect of the constituency represented by my hon. Friend the Member for South Thanet, the difficulty, as she must be aware, is the proximity to France. That makes options for Broadstairs more limited, as it is apparently a matter of Government policy that we do not want to interfere with French television signals any more than we want the French to interfere with ours.
The specific issue regarding the coverage in my hon. Friend’s constituency is transmitter location. Ofcom has the power to require the broadcasters to fill an identified gap in digital television coverage by building a new relay transmitter. The problem in Broadstairs, as she is only too aware, is that the only suitable location that Ofcom has been able to identify is Thanet college, which is apparently currently unable to host a mast that would allow a TV signal to be beamed into Broadstairs. She may be more aware of the reasons behind the difficulties that the college faces, although I am led to believe that it may be because it has plans to develop the site in the future and a new relay transmitter might prevent this.
Although this option would clearly offer a solution, it is ultimately, I suspect, a matter for the college what it wants to do with its land and property. It occurs to me, however, that as a Minister one obtains such information, to a certain extent, second hand, and I would be only too delighted to have a meeting with her, my hon. Friend the Member for North Thanet, Arqiva and representatives of Thanet college if that proved possible to arrange, either in the House or possibly as part of a visit to my late aunt and uncle’s home—my old holiday home—in Fitzroy avenue in Ramsgate.
As I understand it, the key issue regarding Thanet college is that there are unfortunately no other suitable sites which are not prohibitively expensive. I shall dwell on that point briefly. Of course, if money were no object, it might be possible to solve the problem, just as it would be possible to provide a signal to the 1.5% of the population who do not currently get an analogue TV signal. However, I am afraid that cost inevitably comes into the equation, particularly on a day such as today, and it would not be right to place on broadcasters a significant cost relative to the number of viewers served.
In the case in question, Ofcom estimates that about 2,500 of my hon. Friend’s constituents are affected. That means that their coverage does not meet the threshold for good reception, which is defined as a good service for 99% of the time. However, Ofcom’s coverage model suggests that all those affected should have a good service for 95% of the time. I do not want to be dismissive, particularly in the light of being threatened with having to watch the World cup with my hon. Friend. Everyone knows how exasperating it is when the picture freezes just before a penalty kick or a crucial point in a drama, but on Ofcom’s analysis, that is not the same as receiving no TV service at all.
I have already mentioned that there may be other ways of getting a television signal, through either satellite or aerials. There is a cost involved, but the cost of Freesat is a one-off and there is no ongoing subscription. My hon. Friend has indicated that the problems are not just limited to Broadstairs, and I am aware of the petition that she referred to, which suggests that reception problems may be more widespread. She is quite reasonably concerned that bad analogue signals now could mean bad signals after digital switchover. I know that Ofcom is taking her concerns seriously, and earlier this week it carried out specific signal quality testing in the area, which may correspond to the BBC testing to which she referred. It will enable Ofcom to record the strength and robustness of analogue signals in the areas that she has identified as having possible problems.
I understand that Ofcom’s preliminary analysis suggests that the relatively poor reception of digital terrestrial television signals reported by many of my hon. Friend’s constituents could stem from the current low power operation of the local digital transmitters prior to switchover in 2012. When switchover takes place, the power of the local transmitters will be increased and the local relay transmitters will move over to digital operation. They are not currently operating at full power, because they are also having to run a dual analogue signal. That should lead to a significant improvement in the reception of digital television signals. That might offer her some comfort that switchover could improve the problem significantly.
I was delighted by my hon. Friend’s kind remarks about the various stakeholders involved, and I am pleased that Ofcom is approaching the problem so thoroughly. I hope that its results may point a way towards ensuring a robust digital television signal after switchover.
TV switchover has been very successful to date, and I have every confidence that it will continue to be so. It is not all plain sailing, and there are some areas where reception is patchy, but I hope I have made it clear that Ofcom is doing all it reasonably can to ensure that people continue to receive a good signal post-switchover. I thank my hon. Friend for raising her concerns on behalf of her constituents, and as I said earlier, I would happily sit down with her to hear at first hand what the problems are and consider whether, by sitting around a table with the key players in her constituency, we might be able to work towards a solution.
Question put and agreed to.
Ministerial Correction
(13 years, 6 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text
Cabinet Office
(13 years, 6 months ago)
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Fiona Mactaggart (Slough) (Lab)
Let me say that the ward does not send Labour councillors to the borough; it elects Liberals, so no particular borough advantage was involved. However, the change respected the views of people about their communities. The real problem with the latter part of the Bill is that it does not do that. It specifically says that unitary authority boundaries—and all the authorities in Berkshire are unitary authorities—shall not be counted as local authority boundaries, so they are absolutely irrelevant. It also says that inconvenience to voters that comes out of the first boundary review shall be discounted by the Boundary Commission.
[Official Report, 6 September 2010, Vol. 515, c. 115.]
Mr Harper
I can assure the hon. Member for Slough (Fiona Mactaggart) that the reference in the Bill to “counties”, which she discussed, does include unitary authorities. So the Boundary Commission for England will be able to take into account the boundaries of all the unitary authorities in Berkshire as it draws up new constituency boundaries, subject to the issues relating to parity.
[Official Report, 6 September 2010, Vol. 515, c. 129.]
Letter of correction from Mark Harper:
An error has been identified in the response given to the hon. Member for Slough (Fiona Mactaggart) on Second Reading of the Parliamentary Voting System and Constituencies Bill on 6 September 2010.
The correct response should have been: “the reference in the Bill to “counties” does include unitary authorities but not those of Berkshire.”
Westminster Hall
(13 years, 6 months ago)
Westminster HallRead Full debate Read Hansard Text
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
Elections and Returning Officers
(13 years, 6 months ago)
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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
Mrs Eleanor Laing (Epping Forest) (Con)
I am pleased to have the opportunity to bring this matter to the House’s attention yet again, and to see that more than one or two colleagues are here. There is some interest in the matter. That is not a great surprise; if there is one thing that we can be sure Members of Parliament know at least a little about, it is elections and the conduct of elections.
There was much publicity after the general election in May this year, when we saw dreadful scenes that looked as though they came from some third-world country whose democracy was not very well developed. People queued to vote in the general election but were unable to do so after 10 o’clock due to rules made there and then—or, rather, interpreted on the spot—by returning officers.
My interest in the matter did not begin on the night of the general election. For the record, the electoral registration officer in my constituency, who is the acting returning officer, ran an extremely good and efficient election. It also had the right result. I talked to him about the process throughout the build-up to the election, because I was interested in such matters, and I saw how things were conducted in Epping Forest. It was an example of how an election ought to be run.
Although the vast majority of returning officers and electoral registration officers do their jobs impeccably and are never open to criticism, others are unfortunately not quite up to the mark. We discovered before the general election that returning officers are responsible to almost no one. A debate took place in this Chamber on 3 February 2010 in which such matters were examined in relation to election counts. At that point, there was a lot of fuss in the media about whether the result of the general election would become clear the day after or not until later. As it happens—hindsight is a wonderful thing—the true result of that particular general election did not become clear for several days. However, that cannot be blamed on the conduct of returning officers; it was a direct result of the decision of the electorate, which is another matter, and one that we are not here to debate.
The question that arose before the general election was whether the votes ought to be counted at 10 o’clock, immediately on the close of polls, or—as many returning officers decided—on the following day. Some of us got rather exercised about the decisions to wait and said that it was unacceptable behaviour on the part of returning officers. We brought the matter to this Chamber, where it was well debated. However, I was extremely surprised on doing serious research into the role and duties of returning officers to discover that their power and authority extends from a 19th-century statute and has been little modified in more than 100 years.
Parliament dealt with the difficulty in relation to whether returning officers should count votes at 10 o’clock somewhat unusually, by amending primary legislation. I tabled an amendment to the Constitutional Reform and Governance Bill. As an Opposition amendment, it looked as though it would be a talking point only, but fortunately, the then Secretary of State for Justice and Lord Chancellor, the right hon. Member for Blackburn (Mr Straw), decided that the matter needed to be dealt with there and then. He put his name to my amendment, which then became part of the Bill. By a last-minute amendment to primary legislation, returning officers, unless they could demonstrate extenuating circumstances for doing otherwise, were required to start counting votes immediately on the close of poll. That gave us the right results for the last general election, but surely it cannot be right that the law on such a matter should be made ad hoc, in primary legislation, just a few weeks before a general election.
My purpose in asking for this debate was to allow the issues to be aired once again and to begin a general discussion now, I hope, to help the Minister, who I know is intent on improving matters in that area of the law. I also hope that we can begin a discussion that considers what the duties of returning officers are and who undertakes the duty of electoral registration officer and then acting returning officer.
Returning officers, as I am sure hon. Members are aware, are usually not paid officials but the high sheriff of a county, for example: another leftover from 19th-century legislation that has never been properly updated. The person with the official duty and responsibility of returning officer is the titular head of the returning officer’s organisation but takes no actual part whatever in the running of elections, whether day to day, annually or every four or five years. That work is done by the acting returning officer. When one goes back into statute to examine where the acting returning officer’s power derives from, one finds that it is a grey area. Those matters must be updated. In most cases, although the returning officer is, perhaps, the high sheriff or lord lieutenant, the acting returning officer is usually the electoral registration officer, often a high-ranking official in a local authority.
After the debacle during the general election in May, when a significant number of voters were left standing outside polling stations, denied their right to vote due to administrative upheaval and a lack of administrative control and planning, we discovered that acting returning officers are paid a considerable fee for their work in organising a general election. I make no complaint about the structure of that system because, of course, the duties associated with organising a general election only occur once every four or five years. Happily, the general election is now likely to be on a certain date every five years. That will perhaps aid the ability to plan because we will have far more certainty about the date of an election. Indeed, we should all be happy about that.
If someone undertakes to do a job every four or five years, of course, it should not be a permanent position—the job should be paid, and the duties allocated and required only for that time. However, on further examination of the situation, we discovered that very large sums were being paid to returning officers. That has been well documented so I will not read out the sums, because it does not help the debate to put a particular person on the spot, give a particular name and say how much he or she was paid to do a job.
Chris Bryant (Rhondda) (Lab)
But that is what the hon. Lady’s Government have just done in relation to everyone earning more than £80,000. I do not know why she is being so coy about the matter.
Mrs Laing
I accept the shadow Minister’s comment. I understand what he is saying, but he is making a different point on a different matter. I have a list of returning officers who allegedly did not do their jobs very well and yet were paid sums in excess of £12,000 or £15,000 to do that particular job for a few weeks. I am not the kind of politician who embarrasses individual members of society by announcing their names to be recorded in Hansard. We will leave that sort of thing to the tabloid press. The point is that there is no chain of accountability. That is where the problem lies, and that is where the problem lay when we examined how returning officers could be required or even just encouraged to start the election count upon the close of poll. That is also what we discovered when inquiries where carried out correctly by the Electoral Commission into how administration was taken forward for the election in May this year.
It is appalling that senior people in local authorities who have a position of responsibility and normally command salaries well in excess of £100,000—usually far more than that, as far as I can see from the statistics—have not properly planned for a general election and have got things so badly wrong that people were deprived of their vote. In the instances that occurred in May, it is fortunate that there were no cases in which the number of electors who allegedly were unable to vote because of returning officers’ maladministration was greater than the majority in that particular seat. Therefore, there was no reason for an appeal to the courts on the election result. In one way, that is fortunate because it would have meant uncertainty about the results of the election. In another way, however, it is unfortunate, because the matter has not been properly examined, which is another reason for my initiating this debate.
Mr John Leech (Manchester, Withington) (LD)
The hon. Lady is right: there is no evidence to suggest that any outcome would be different as a result of people being unable to vote on election day. However, we can never be sure about how many people turned up at polling stations, saw the enormously long queues that resulted from all sorts of chaos, went away again and did not bother coming back. That was a big disincentive in some areas, where people saw big queues and thought, “Well, I can’t really be bothered. I’ll just go home and won’t bother voting.”
Mrs Laing
The hon. Gentleman is absolutely correct; I am glad he made that point. We have spoken a lot lately about the need to encourage people to be involved in the democratic process and to encourage all age groups and people across the social and economic spectrum to register and use their vote. I mentioned earlier the number of people who allegedly turned up at the polling station and were denied their right to vote. That number may even be far greater than we estimate, because of the situation that he has described.
Iain Stewart (Milton Keynes South) (Con)
It is also important to note that the problems arose when the turnout was not particularly high. Turnout increased marginally in 2010 compared with the previous general election, but it was nowhere near the turnout figures of 75% or 80% that we used to have in the elections of the 1970s and 1980s. If we return to that level of turnout, I suspect that the problems that occurred will be magnified many times over.
Mrs Laing
My hon. Friend is, as ever, absolutely right. That is one of the problems we can foresee. We are all working hard—I know that the Minister in particular is doing so—to bring in individual voter registration as soon as possible. We all hope that individual voter registration will encourage more people to be involved, to register and to use their vote. We also find that where the media tell people that the outcome of an election is a foregone conclusion, many people think that there is no need to go and vote. If we have closer elections and it appears that there could, again, be a change of Government—let us hope not, but I suppose that it will happen one day—people are more likely to vote and there will be higher turnouts.
If the Parliamentary Voting System and Constituencies Bill, which is currently before the House of Commons, succeeds in going through Parliament, we will have a referendum next May and it is likely there will be a high turnout—although I have argued that that is not likely. However, in any case, there will be a national plebiscite where everyone will be given the opportunity to vote. That is not very far away. So although we will not have a general election for another four and a half years, we will have a full national election of sorts next May. Therefore, by securing this debate, I hope that I am helping to begin the discussion on matters that need to be taken into consideration before next May and the next set of elections.
One of the subjects that has not yet been fully explored is the role of the Electoral Commission, which is still a fairly new body. In many ways, it has been very successful. However, in some ways, it is still settling into its role. When taking the advice of the Electoral Commission on how to deal with the issue of returning officers and the timing of the count, we discovered that it has no power to require returning officers to act in a particular manner. The Electoral Commission only has the power to issue guidance.
As a matter for consideration, I suggest that such a situation is not fair. The Electoral Commission and its chairman were given the blame for what went wrong at 10 o’clock on election day, but it is not fair that they should take the blame when they had no power beforehand to put matters right. At 10 o’clock on election night, the Electoral Commission had no power to say to individual returning officers, “No, you can’t do this. You must allow people to vote. You must keep the doors open.” It had no power to tell people to act in a particular way. Nobody had any power. The Minister had no power; the Electoral Commission had no power; the local authorities had no power. There is no line of reporting or of authority for electoral registration officers and acting returning officers. In a modern democracy, where we spend hour upon hour in the Chamber discussing the minutiae of elections and their administration, as we have done over the past few days, it is appalling to discover that there is no line of authority whereby the administration of our elections can be properly decided.
In the run-up to the election, during which I had been fairly vocal about the problem of returning officers and the 10 o’clock vote, I found myself in a live radio debate with a particular returning officer, a lady from the north of England. I made the point during that debate that returning officers ought to be responsible to the electorate and ought to act responsibly. The lady’s retort, which was made live on the radio, was more or less along these lines: “How dare you, a Member of Parliament, try to interfere with how I, a returning officer, do my job. I am responsible to no one and I won’t listen to you, Madam.” Those were not her exact words, but it was clear that her message to me and to the three or four people listening was that returning officers were responsible to no one, and she was outraged that I would even suggest that Parliament should take some action in that respect. I was equally outraged in my response, but I will not repeat what I said. The fact is that the count in that constituency took place, I am glad to say, at 10 o’clock on election night.
The 10 o’clock issue is irrelevant; how our electoral system is administered is what is important. Over the past few years, various complications have arisen in elections, such as having more than one election on the same day, or different kinds of elections under different voting systems on the same day, as happens in Scotland. There is a danger that such complications will arise across the country next May, when a referendum and other elections will take place simultaneously in more than 80% of the UK. Indeed, in some parts of the country, three types of election will take place on the same day. On this occasion I do not object in principle to simultaneous elections, although I have done so on other occasions. The purpose of the debate is to open the discussion on how we ensure that elections are undertaken in a proper, measured and watertight fashion.
My first suggestion to the Minister is that the powers and duties of the Electoral Commission should be reconsidered and that perhaps the way forward is that it ought to be given a power to direct returning officers, electoral registration officers and acting returning officers. My second suggestion, which I am happy for the Minister to knock straight on the head, although I think it ought to be discussed, relates to the hypothecation of public money. The Treasury is implacably opposed to hypothecation, and there are good reasons for that, which I have always supported. However, the additional funds for electoral registration officers setting up and administering elections come directly from the Treasury, rather than local taxpayers. That is absolutely right, because if the money came from local taxpayers, a returning officer would have the excuse of saying, “Well, in this local authority we have had a particular problem with housing this year, and we have spent so much money on that that we simply do not have enough to spend on the proper administration of elections.” That would be the case whatever the current concern in a local authority, whether it is asylum seekers or an influx of Gypsies and Travellers. However, such excuses cannot be made because the money spent on elections comes directly from the centre.
Having come directly from the centre, however, that money is not ring-fenced or earmarked, so there is no hypothecation. I am suggesting, for the sake of argument, that the principle of hypothecation in that instance ought to be revisited. We are talking about money allocated from central Government for a specific purpose over a specific period of time, so that money that comes to returning officers and local authorities for the funding of electoral administration ought to be hypothecated and ring-fenced. I appreciate that the Minister may be bound to say that Treasury rules do not permit hypothecation, which I understand, but this is only the beginning of the argument.
Mr Brian Binley (Northampton South) (Con)
I am particularly pleased that my hon. Friend has raised this matter, as she has been doing for some years in the House through the auspices of the 1922 committee and with the Electoral Commission itself. My fear is that money is being leached across and leached out, as there is great pressure for that to happen in times of economic stress. I sincerely welcome her plea to the Minister and urge him to take the matter on board. Unless the Government do something about it, in these times of stress we will not see an improvement or have proper money spent on the administration of elections or on the training of registration officers and acting returning officers, and therein lies one of the vital points.
Mrs Laing
My hon. Friend, as ever, makes an excellent point. I know that he is rather an expert in those matters, and it is a pleasure to have his wisdom and guidance on them.
The basic principle is one of confidence. As a modern democracy, we must have confidence in how our elections are administered. I would have raised the matter for discussion—I hope that I would have had the opportunity to do so—even if the queues had not formed at polling stations at 10 o’clock on election night. Even before that happened, most of the questions that I have asked this morning were unanswered and are waiting for action. Having seen what happened at the close of the polls, I think that all of us who are involved in any way in the democratic process ought to hear alarm bells ringing. I know that the Minister takes the matter seriously and hope that I am being helpful by giving him one of the first opportunities to examine the matter and assure Members that the Government will take action before we have any serious national election to ensure that we have a proper accountability structure for those administering our electoral system.
Mark Lancaster (Milton Keynes North) (Con)
It is a pleasure to serve under your chairmanship, Mr Caton, and to contribute to this timely debate. I congratulate my hon. Friend the Member for Epping Forest (Mrs Laing) on securing it. She has been a champion for that cause and I was particularly interested in her comments and suggestions on the Electoral Commission, which I will touch on. I agree wholeheartedly with almost everything she said.
I shall briefly draw attention to some of the issues in my constituency, Milton Keynes North, which was one of the 11 constituencies that formed the focus of the Electoral Commission’s initial review, “2010 UK Parliamentary general election,” published on 20 May. Regrettably, the difficulties encountered in my constituency on election day were numerous.
Initially, problems arose early in the day around ballot boxes in one of the polling stations in Newport Pagnell, which was being used for voting in local council elections in two wards as well as the general election. Ballots for the wards were mixed up: ballots for Newport Pagnell North were issued to residents in the south and vice versa. Eventually, amidst the confusion, the police were called to attend and some votes were recalled. It is worth noting, though, that the people who had already voted were not contacted by officials to recast their local council votes in the right ward. Fortunately, there was a clear-cut election in both wards, and the number of ballots cast which were issued incorrectly was significantly lower than the majority of the winning parties, so there was no need to hold a new election. However, that is not the point.
Another issue that we faced in Milton Keynes, which I believe was not shared in many of the other affected areas, was the time it took for the general election ballots to be counted. The Electoral Commission’s guidelines—of course, they are just guidelines, as my hon. Friend made clear—suggest that the vote count should be started by 2 am on the morning after the election takes place. In Milton Keynes, due to the local election taking place on the same evening, the count began at 4.18 am, with the results announced at 8 am. Given the relatively small geographical area covered by Milton Keynes unitary authority, which is coterminous with the two parliamentary seats, the general view was that that was an unnecessarily long period to wait. I should emphasise that Milton Keynes is not a very big place.
Those instances highlight the fact that there are difficulties in holding more than one election on the same day—a view resonated by the returning officer of my constituency. Given the complications experienced in Milton Keynes, I should be grateful to know whether the Minister believes there is reason for concern and the potential for the same problems to occur again next May, when some polling stations may have to deal with three separate elections on the same day.
I would now like to focus my attention on an issue faced by several polling stations in Milton Keynes North and in 10 other constituencies around the country. It became apparent at 8.30 pm that large queues were forming outside three polling stations. The acting returning officer, John Moffoot, did well to follow procedures and was proactive in sending senior council officers to monitor the congested polling stations. He himself went to the Wyvern school polling station, which appeared to be the worst affected. With more than 150 people still queuing to vote after the 10 pm deadline, Mr Moffoot, with some concern for the safety of polling staff, decided to go against Electoral Commission guidelines and allow those in the queue at 10 pm to be issued with ballot papers after the 10 pm cut-off point.
It is my understanding that, at present, returning officers must follow strict guidelines on closing polling stations at 10 pm unless issued ballot papers are still being marked. That is the only circumstance in which ballots should be submitted after the deadline. It is interesting, though, that following the review carried out by the Electoral Commission, the returning officer for Milton Keynes North did not receive the same amount of criticism for allowing polling to continue as returning officers who closed polling stations at 10 pm received for disallowing voting by approximately 1,200 of the electorate around the country. I supported Mr Moffoot’s actions and, indeed, the Electoral Commission’s conclusions, but I believe that this case highlights a key area for concern, and a need for clarification or review of the law. To that end, I ask the Minister whether he believes that there should be a review so that Mr Moffoot would not again be put in a position where he is required to turn people away from polling stations even though they were queuing to vote before the 10 pm deadline.
The perception is that turnout at this year’s general election was higher than in previous elections, but the reality in Milton Keynes is that it was not. Indeed, this year’s turnout of 62.8% was relatively low compared with some previous elections; for example, in 1983 it was 74%, in 1987 it was 73%, in 1992 it was 81%—an all-time high for Milton Keynes—in 1997 it was 73%, in 2001 it was 63%, and in 2005 it was 64%. Given that, I fear similar occurrences in future elections if the problem is not addressed.
It is clear that some of the issues can be addressed without the need for legislation by ensuring careful choice of polling stations, although I understand that there are restrictions on which buildings may be used. The hon. Member for Manchester, Withington (Mr Leech) made a good intervention. He said that we simply cannot estimate how many people decided not to vote when they saw long queues at polling stations. On the basis of contacts that I had after the election, I would estimate that several hundred people in my constituency chose not to queue and vote. Once again, I am pleased to say that the result in Milton Keynes North was decisive, and I do not think that that factor affected the election result.
Mr Leech
There is certainly anecdotal evidence from constituents. One told me that there was a big queue when they turned up at the polling station at 6 o’clock. They went away and came back at 7, but there was still a big queue. When they came back at 9 the queue was even bigger, so they simply gave up.
Mark Lancaster
The hon. Gentleman makes the point that I wanted to make. It is clear that the problems faced in my constituency were not isolated incidents. Praise should be given to the Electoral Commission for its swift publication of the interim report on the problems faced in a few constituencies, but I believe that we should address the confusion and difficulties regarding the 10 pm cut-off to guarantee that those who wish to vote are able to do so. I would suggest to the Minister that the actions taken by Mr Moffoot in Milton Keynes to alleviate the problem were right, even though, in the eyes of the law, they were wrong.
Rehman Chishti (Gillingham and Rainham) (Con)
I congratulate my hon. Friend the Member for Epping Forest (Mrs Laing) on securing this debate on such an important issue. I also congratulate her on eloquent and passionate speeches on the topic on the Floor of the House yesterday and in this Chamber this morning. I concur with her when she says that elections are always well run in Epping Forest. I know that at first hand, as my researcher was an election agent in her borough prior to working for me.
The public must have confidence in our democratic process. Over the past 12 months, several issues have been raised regarding the conduct of elections. I would like to deal them in two parts: those that are election offences and those that are not. Election offences including impersonation, fraud, bribery and misuse of campaign expenditure are covered by several Acts of Parliament, and the Government are taking steps to help to protect against fraud by improving the accuracy of the electoral register. However, matters such as polling station failures and incorrect ballot papers are, in themselves, not election offences.
The Representation of the People Act 1983 states that it is the returning officer’s duty
“to do all such acts and things as may be necessary for effectually conducting the election in the manner provided by those parliamentary elections rules.”
That clearly covers both points.
Returning officers have considerable authority in their work. Although they take instruction from the Electoral Commission, they are under no obligation to follow its advice and are subject to little scrutiny. Returning officers are independent statutory office holders and are therefore accountable only to the courts. Action against returning officers can be taken only by means of a complaint to the police or by means of an election petition. The 1983 Act sets out the penalty for those, including returning officers, who are in breach of their official duties in parliamentary elections: a fine not exceeding level 5 on the standard scale, currently £5,000.
Key players in the political process are often reluctant to take action against returning officers for the following reasons. First, the returning officer is usually a community leader—for example, the chief executive of a council. Politicians and election agents are often reluctant to take action against such a person, particularly if the outcome is not guaranteed. Secondly, poor performance by a returning officer does not necessarily constitute a criminal or an election offence, and it is difficult to prove that someone has been in breach of their official duties. Thirdly, an election petition is expensive. It costs £5,000 to issue a writ, which can be issued only against one’s opponent, not the returning officer. Fourthly, if an election petition is successful and the election is void, the electorate may feel that the candidate responsible for the petition is a bad loser, and the resulting by-election may see massive swings against them. The 1997 Winchester by-election is an example of that.
Returning officers should be more accountable for their performance. Introducing senior returning officers with enforcement powers, responsible for a geographical area, is a possible solution. It is important to remember that many issues have a simple solution. For example, on polling station failures, a risk assessment would foresee many problems, and procedures should be in place to deal with high volumes of electors and shortages of ballot papers. On incorrect ballot papers, showing a copy of the ballot paper to candidates or election agents before issue would reduce mistakes.
To sum up, existing legislation is sufficient to deal with the process of elections but returning officers should be more accountable. Action to prevent mistakes is far more productive than dealing with their consequences afterwards.
Mr John Leech (Manchester, Withington) (LD)
May I add my congratulations to the hon. Member for Epping Forest (Mrs Laing) on her thoughtful speech this morning about returning officers and the conduct of elections? I am delighted to have the chance to speak this morning, mainly because, disappointingly, Manchester, Withington was one of those constituencies that was the scene of chaos on election night in May. The polling station at Ladybarn community centre was constantly on the news for days because someone had filmed the events there on a mobile phone. There were angry scenes, with more than 200 people questioning why they were not being allowed to vote even though they had been waiting at the polling station, for up to an hour in some cases, to exercise their right to vote.
In Manchester, Withington there were three main reasons for the chaos on election night. The first was an increased turnout, which was expected—but it was an increased turnout of those who were more likely to vote later in the day. If they had turned up earlier, they might have waited longer than they would normally but there would not have been the scenes of chaos that there were later in the day. That needs to be taken into consideration when we look at ensuring that everyone who is in the queue at 10 o’clock has the right to cast their vote. Obviously many people are unable to vote during the day, and if they have to vote late at night, even if they have to queue, they must have the opportunity to do so if they are at the polling station before 10 o’clock.
Mr Gregory Campbell (East Londonderry) (DUP)
The hon. Gentleman raises an important issue. If, as we learned in yesterday’s debate, there is to be a drive for higher registration and it is successful, as I hope it will be, and more people are registered who previously did not vote because they were not registered and, therefore, are less likely to be disposed to vote earlier, the problem that he is outlining will probably increase in future elections. There will be not only people queuing to vote who are normally registered and have gone late because of social problems or work commitments, but an additional issue of previously non-registered voters turning up to vote late. Therefore, the problem that the hon. Gentleman has outlined will be much worse next time.
Mr Leech
I thank the hon. Gentleman for his intervention. The reality is that we do not know what will happen to people who have not been previously registered and we do not know whether, having been registered, they will be likely to vote, and if so, at what time. The issue needs to be considered. We must be ready for potential additional chaos late at night.
The second reason why we had chaos in Manchester, Withington was that some polling stations were expected to deal with too many people turning up to vote—way above the limit recommended by the Electoral Commission. That issue is being addressed in Manchester and, I am pleased to say, the council is acting on extending the number of polling stations to improve the situation.
The third reason why there was a problem in Manchester, Withington was the dual election—one being a general election. In some parts of the country, people are used to general elections on the same day as local elections, but that has not happened in Manchester for a very long time. Considerable confusion and delay resulted. Some people were told, “Oh, actually, you’ve got two votes. You can vote in the local and general elections,” but a significant number of people were entitled to vote in the local elections but not the general election, and that had to be explained to them because there was confusion. That number of people was probably significantly bigger in Manchester and other city areas.
From previous exchanges with the Minister, I know that I have not won the argument about the general election date being set in stone and separate from any other elections. I still firmly believe that the general election should not be held on a day when other elections or referendums are held, but the Minister does not accept that point. I am on to a loser there.
I wanted to speak in the debate today, not necessarily about the chaos on election night, but mainly about payments awarded to chief executives who act as returning officers at general elections. I confess that I was stunned to find out that running the general election as a returning officer was not in the job description of the chief executives of big councils. I do not want to target Sir Howard Bernstein, the chief executive of Manchester city council but, my constituency being within the boundaries of Manchester city council, he is the example I have. Sir Howard is an excellent chief executive and has done a great job for Manchester, but chief executives are well paid for the jobs that they do—the chief executive of Manchester city council earns significantly more than the Prime Minister—and yet a £20,000 bonus was payable to him for running the general election.
Given that at least 200 or 300 people missed out on voting in Manchester, Withington, I question whether any bonus was deserved. To his credit, Sir Howard returned 20% of his bonus, due to there being five constituencies in Manchester and the Manchester, Withington election not running smoothly—he returned the whole 20% for that constituency. However, I question whether any sort of bonus was justified if a single person in Manchester was unable to vote on general election day through no fault of their own, and there were clearly a significant number of people in that position. The chief executive in Sheffield forwent his entire bonus due to the chaos there.
Finally, there ought to be an assumption that the chief executive of a large council is the returning officer, and that should be part of their job description. There should never be additional payments simply for running an election and ensuring that we have democracy in our constituencies and our local authorities.
Iain Stewart
I have had examples in my constituency of people who have applied to reside permanently in the United Kingdom but are not yet full citizens using their presence on the electoral register as evidence that they are entitled to be here. I totally accept my hon. Friend’s point that the electoral register’s integrity is far from perfect.
Nick de Bois (Enfield North) (Con)
Is not part of the problem, as I found during the election, that if someone wishes to challenge a household’s electoral registration there are only 21 days in which the returning officer can do so? In the heat of the work in the run-up to an election, that is effectively impossible.
Mr Binley
My hon. Friend makes an important point. The Minister should consider, and I hope that he noted it.
With postal voting we have created a frightening potential for corruption in our election system. If it were not so important, the inability to ensure good and proper elections through the postal vote would be laughable. There was a time when the whole construct of postal voting was carefully created and checked, and its efficacy was understood and known to be absolutely within the prescribed limits. That time has gone because of the machinations of the previous Government, who did not understand what they were doing in that respect. We must all recognise the faults because the issue is more important than party politics. It is about the very basis of our electoral and democratic system—[Interruption.] I am happy to give way if the hon. Member for Rhondda (Chris Bryant) wishes to intervene.
Those two matters are vital, and there are many others. I want to describe from my experience the reasons for the decline. The business of electoral registration officers used to be a profession. People in local government offices did the job for years and years, and they had assistants who followed them and who had learned to do the job properly. We had the money to check whether a registration was valid by visiting the home of people seeking registration. The whole process was efficient, but that efficiency no longer exists because electoral registration has been downgraded dramatically in most council office structures, and the attitude seems to be, “Who will do the register this year, Fred?” It seems to be a last resort, and that is simply not good enough.
What can we do? My hon. Friend the Member for Epping Forest said that the Electoral Commission must be a more robust policing body. First, we must ring-fence the money that we allocate from national Government for the conduct of elections and registration. Money is being leached, and there is every reason why local authorities should so do. They are in trouble with money, but we must ensure that our money is used for the reasons for which it was designated. That means ring-fencing, and the Electoral Commission must be responsible for monitoring that money and ensuring that it is properly used for the purposes for which it was allocated. Secondly, we must spend money on training electoral registration staff and returning officers because the quality of their work has fallen, largely because the learning thread that goes from one officer to another no longer exists.
We must bring the law to bear much more. We must make criminal actions a higher priority in society. When someone cheats the electoral system, they cheat my vote and me. If we truly believe in a democratic process, we must ensure that the systems to undertake that democratic process are as viable and credible as possible, and they are not at the moment.
We have a good voting system, and I have made that clear in the House. It does not need to be tampered with for any reason, least of all for those that apply at the moment. The voting system is not broken, but the conduct of elections and electoral registration is a total mess, and if the Government had any sense they would recognise that democracy is in danger through those processes and not through the process of our electoral system.
Chris Bryant (Rhondda) (Lab)
It is a delight to serve under your chairmanship, Mr Caton, and yet again to gather together this group of hon. Members who take an interest in electoral matters. No doubt we shall gather again this afternoon for the next round of discussions. I congratulate the hon. Member for Epping Forest (Mrs Laing). There are many things I do not understand about the Government, one of which is why she is not a Minister. She is extremely efficient, capable and competent, and she always makes her argument very well. Yesterday she got a little cross with me. I do not take any offence at that, although a lot of people do.
The basic message from the debate, which I hope returning officers will understand, is that many of us who are involved in politics as elected politicians worry that we are taking democracy somewhat for granted. We all worry about the fact that turnout has fallen, as the hon. Member for Milton Keynes North (Mark Lancaster) mentioned. Turnout rose slightly at the last general election, but it is still lower than it was in the 1980s and earlier. Now is not the time to rehearse those arguments, but in Wales turnout was consistently above 75% or 80%. Wales often had the highest levels of turnout, but lately they have been some of the lowest. That is a worry to us all.
It is all too easy for local authorities, which often make the decisions about funding for the democratic process, to take democracy for granted. A local authority might have to choose between keeping a swimming pool open, which will cost £100,000 a year, or doing a full canvass of every house to ensure that everybody who is entitled to vote is on the register, and that everybody who is not entitled to vote is not on it. Elected politicians at local level sometimes choose to protect the swimming pool rather than the democratic process.
I suspect that over the past few years, the whole anti-politics movement—to give it a name—has added to that problem. Too many people felt that all politicians of whatever political party were in it just for themselves, and that there was no point in voting because, in terms used by many comedians, “If voting made any difference, they’d abolish it.” The issue of Members’ expenses also fed into that, and that cynicism has weighed heavily on the political system over the past few years. That has fed into the presumption that money spent on the electoral register or on electoral processes was not money well spent. That is a mistake.
I am sure that we can all remember watching the first time that people voted in South Africa. There were queues not only down the street but round the block for days. People were camping out and waiting to vote. Watching people vote in countries such as Iraq or Afghanistan, where they might have been running terrible risks to do so, fills a lot of us with admiration. In the Balkans, boycotts of elections have sometimes been organised by one ethnic grouping, and it has been great to see turnouts that were significantly higher than many had anticipated. That is why the scenes that we saw in May were sad. It is fortunate—and only fortunate—that there was no constituency in which the number of people who we know were not able to vote was higher than the majority of the candidate who won. Therefore, we can be confident that that issue may not have affected the result.
The hon. Member for Manchester, Withington (Mr Leech) makes an extremely good point: we have no way of knowing how many people went to the polling station, saw a long queue and thought that they would come back later. Perhaps they came back later but still saw a queue and gave up.
Mr Leech
There is also the fact that there were local elections on the same day. I guess that in some constituencies, the result of the local election in a particular area was very close. It may be that some people were elected to local councils who would not have been elected if everyone had had the chance to vote.
Chris Bryant
The hon. Gentleman makes his point, and I hope that the Minister will be able to answer him on it. I will speak about combined polls a little later.
The Opposition tried to provide an answer to the issue of 10 o’clock voting with an amendment that was discussed last Monday. Unfortunately, not enough hon. Members felt able to vote for it. The Minister said that the problem with our amendment was that it introduced the concept of a queue into British legislation, and that that might be difficult to define. If the British Parliament cannot define a queue, I do not know which Parliament in the world would be able to do so. Many other places in the world have a system in which, for example, a person’s finger is dabbed with indelible ink the moment that they present themselves, and that is the moment at which they are entitled to receive a vote. I am sure that many other ways could be devised. I hope that the Minister will look specifically at a way of ensuring consistency across the country.
The hon. Member for Milton Keynes North made the point tellingly: in some constituencies, the returning officer decided to be generous and to stretch the regulations in one direction, but in other constituencies they decided to be extremely strict about how they operated the system. That inconsistency around the country does not inspire confidence in voters. In subsequent elections, people might think that if it is 9.30 pm or 9.45 pm there is no point going to vote because there are always queues at the polling stations.
I do not want to be nasty to the Minister this morning—
The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)
Keep it for this afternoon.
Chris Bryant
I cannot keep it for this afternoon because I do not think that the Minister will be responding to the debate then. However, I thought that he was a little complacent about that element last Monday afternoon. He said that the issue was not an enormous problem and that there was not an enormous number of instances in which it had happened. The figure of 1,200 was suggested, but I suspect that many more people were affected. I suspect that in Hackney North and Stoke Newington alone more than 1,500 people ended up not being able to vote because of the situation. I hope that the Minister will return to the issue with some means of providing consistency around the country.
The inconsistency around the country applies not only to what happens at 10 o’clock but to a whole series of different issues. In part, that is precisely because of the reason adduced by the hon. Member for Epping Forest: although the responsibilities and powers are laid down in statute, a wide amount of freedom is given to the returning officers and there is little accountability. I agree with the hon. Member for Manchester, Withington that it is ludicrous that such a job is thought of as additional to the job of electoral registration officer, and that somehow people have to be additionally recompensed in order to perform their function when there is a general election. I think that it should be part of the standard job description and that no additional fees should be payable. It should be run of the mill and part of doing the job. Frankly, if someone does not do the job well, they should not remain in it. It should not be a question of getting extra payments.
Mrs Laing
It is worth going over that point again. The hon. Gentleman is absolutely right: not only is it not part of the job description of a local authority employee, but there is also a lack of accountability. The fee for doing the job comes from central funds, but there is no line of accountability to that. As we have seen, some people were paid perhaps £15,000 for administering matters this year. They got it wrong and were not required to pay a penny back.
Chris Bryant
The hon. Lady makes her point extremely well. I hope that the Minister will think about whether we need to look at the structure of how returning officers—in most cases, broadly speaking, an honorific title—and those beneath them are appointed.
In my constituency in 2001, the returning officer appointed himself because he wanted to announce the election result. Unfortunately, he could not speak Welsh. He decided that he had to make the announcement in Welsh first, despite the fact that remarkably few people in the Rhondda speak Welsh, and very few people in the hall spoke it. He certainly did not speak Welsh, so what he announced was virtually incomprehensible. The BBC immediately switched off and went somewhere else. We would be better off with the electoral registration officer, who is the person who knows the law best, being the returning officer. I am sorry if that means that we will be sacking all the high sheriffs and lord lieutenants of the land. I mean no disservice to them but it is a professional job that must be done on a professional basis.
Another point raised was about when the count should take place. I think that people like the drama of election night. It is fascinating that people are watching the BBC’s 1970 and 1974 election programmes, which are now being re-shown. It is quite exciting thinking “I can’t remember who won Plymouth, Devonport” or wherever. I had an Australian friend who was my lodger. This was a few years ago. He was fascinated by Australian politics and refused to watch any news for a week until his mother had sent him the five DVDs with the election television programme from Australia. It took even longer than it might have because the count takes a long time in Australia.
My point is that the drama of election night is very important and, as we saw in our election, all the more important because sometimes it can determine the feeling, when there is to be a hung Parliament, about how Governments may or may not be formed. That is why there should be consistency across the land. If there are combined elections, the general election votes should be counted first, and the count should not start at 4.19 in the morning and finish at 8 o’clock in the morning. That explains why the hon. Member for Milton Keynes North looked just a little weary by the time his election result came out. We should be moving to greater consistency in that regard.
That leaves us with the problem in relation to combining polls. If we are to go to a fixed-term Parliament when we already have fixed-term council elections and fixed-term Assembly elections in Wales and Northern Ireland and for the Parliament in Scotland, we either decide that they will all coincide always, so that that is a fixed part of the programme as it is in the United States of America, where there are elections every two years, or we decide that we will not combine polls at all, because that is better. I think that it is a bit odd that we have elections on the first Thursday in May, because April is a pretty rubbish month to go campaigning. Chaucer got it right when he talked about April with its showers. Perhaps we should think about another month. I say that as someone who was first elected in June rather than May.
Obviously, it is more important that we hear from the Minister than that we hear further expatiations from me. I just hope that the issues of consistency around the country can be addressed, as well as the finance and the accountability of returning officers.
The Parliamentary Secretary, Cabinet Office (Mr Mark Harper)
It is a great pleasure to speak under your chairmanship, Mr Caton. I add my congratulations to my hon. Friend the Member for Epping Forest (Mrs Laing) on securing the debate. As she correctly said, this is an area in which she has taken great interest over a considerable period, and she has spoken very well on it for our party. She slightly underplayed her role in her mini-triumph earlier this year when she persuaded the then Lord Chancellor to adopt her amendment, which brought considerable consistency—to pick up the point made by the hon. Member for Rhondda (Chris Bryant)—about counting. Those of us who were up for election and whose result was perhaps not as assured as that of the hon. Gentleman were grateful that the counts took place promptly and we had early results so that we knew our fate. My hon. Friend played a considerable part in that and has taken a great deal of interest in the issue, and we thank her for the opportunity to discuss these matters today.
It is worth saying, so that it is clear, that the administration of elections takes place at local level, as my hon. Friend set out. The acting returning officer is often, although not always, the local authority chief executive or another senior officer. They are responsible for all aspects of the election, including publication of the notice of the election and dealing with the nominations of candidates, ballot papers, polling stations, the counting, the arrangements for the count and the declaration of the result. Part of the tension when we are talking about accountability is about making it impossible for the people running elections also to have a stake in the outcome. The difficulty is about who is accountable.
That highlights one of the issues with the solution that my hon. Friend the Member for Manchester, Withington (Mr Leech) highlighted. If the task was made part of the local authority chief executive’s day job, for which he is accountable to elected members of a local authority, there would be a risk in some places of political pressure and influence being exerted on the returning officer. That post is separate from the role of chief executive is so that political pressure is not put on that person. We do not want to lose that if we make any changes. My hon. Friend made a good point, but I am not sure that that is the right solution.
Mr Binley
There is a distinction between the returning officer and the acting returning officer, which we must not lose sight of. The returning officer is normally a volunteer, not a local government professional, and is guided immensely and totally by the acting returning officer, who is normally the chief executive and does the work. We need to make that distinction.
Mr Harper
I thank my hon. Friend for making that point. My hon. Friend the Member for Epping Forest paid tribute to the way in which the acting returning officer conducted the election in her constituency. It would be remiss of me not to mention that I was also fortunate that the acting returning officer in my constituency ensured that the polls ran very smoothly. Indeed, unlike at the last general election in 2005, when I had to wait until about 6 am for the result—albeit perhaps not as long as my hon. Friend the Member for Milton Keynes North (Mark Lancaster)—this time, the acting returning officer and her team made a declaration almost three hours earlier and I was the first Member of Parliament in Gloucestershire to be elected. I have told them that I shall expect that level of service from now on.
What I am describing can be done. It is worth saying that, across the country, with the exceptions that we have discussed, most of the general election counts and the process were very well conducted. The standard is very high. However, that is not to take away from the fact that there were difficulties.
My hon. Friend the Member for Epping Forest and other hon. Members drew attention to the problems that occurred on election day. I am referring to the queues at 10 o’clock. The Electoral Commission, in its report, made the point that that was largely to do with poor planning and poor contingency arrangements on the day. It is worth putting it in context. I am not being complacent or underplaying it, but there are 40,000 polling stations in the United Kingdom and there were issues at 27 of them. The reason why the Government hesitate before we rush off and legislate is that we want to see whether legislating would solve the problem and not create further problems. We want to see whether that is the right way to go. Without wishing to understate the problem, I just think that before we legislate, it is worth thinking about whether that is the right solution.
I will not go into the issue at length. As the hon. Member for Rhondda said, the House had the opportunity earlier this week, because of the amendment that he and his hon. Friends proposed, to debate the matter. The House did debate it and decided not to make the change to the law at this time, but we are considering the Electoral Commission’s report and looking at the right way of solving the problem.
It is worth saying, though, that the law is clear. It has not changed; it has been the law for a considerable time. It is clear that a ballot paper should not be issued after 10 pm, so there is no reason why acting returning officers should be confused about that, and I know that the Electoral Commission will ensure that that guidance is clearly established before the next set of elections.
Mr Andrew Turner (Isle of Wight) (Con)
Has the number of polling stations, particularly in urban areas, reduced and have they become larger?
Mr Harper
My hon. Friend puts his finger on a point that my hon. Friend the Member for Manchester, Withington raised. In Manchester, there were polling stations that covered too great a geographical area, or far too many electors were expected to vote in them. It is good to hear that Manchester city council has taken steps to address that. It is one of the issues set out in the guidance from the Electoral Commission. It lays out broadly how many electors should be going to a particular polling station, precisely so that if there is a high turnout, that number of electors can be processed smoothly. It is good to hear that in places where we know that there were issues, they are being dealt with. I do not know overall across the country whether there has been a reduction in the number of polling stations.
I suspect that one problem was that given that turnout was lower at the last few general elections and at other elections, as the hon. Member for Rhondda highlighted, some acting returning officers made assumptions that turnout would continue at a low level and were caught unawares when, perhaps because people were more engaged in the election, they took part in it in greater numbers.
Chris Bryant
I am sure that the Minister is absolutely right, and I think that another assumption the officers made was that many more people would vote by post. That has undoubtedly happened: in my constituency we have lost, I think, eight polling stations since I was first elected in 2001, for all sorts of reasons that are pretty much insurmountable. Virtually everyone in those old polling districts now votes by post, notwithstanding the points made earlier by the hon. Member for Milton Keynes South (Iain Stewart).
Mr Harper
The hon. Gentleman makes a good point. I suspect that in some areas people have made assumptions about postal voting. Because of the problems that we have had with such voting at previous elections, quite a lot of my constituents who had decided to vote by post have now gone back to voting in person, partly because they like doing that but also because they feel that it is more secure. Acting returning officers need to take that into account.
Mr Harper
My hon. Friend makes a good point, and it comes back to accountability—an issue that has been mentioned by a number of Members. I would say a couple of things about that, and about the payments. The returning officer’s job is separate from and in addition to their normal duties, which ensures that in carrying out those duties they are not accountable to politicians, who might have an interest in the election. Returning officers are not paid for just the one night; a lot of planning and preparation goes into ensuring that elections run smoothly. Indeed, some returning officers appoint deputies to help them, and with whom they share the fees. The Government have issued guidance in relation to national elections, which recommends that that happens.
One of the things that Members have highlighted is the issue of what happens if things go wrong: what is the accountability? In Manchester, the council’s chief executive, who is the acting returning officer, has effectively taken the view that because there were problems in one of the constituencies—Manchester, Withington—he would not take his fee for that. Some other returning officers have also taken that view. Members have suggested that someone should have the ability to make such a judgment, and to not pay the fee. We will be experimenting with that idea, to some extent, in the provisions in the Parliamentary Voting System and Constituencies Bill.
Regarding the referendum, the chief counting officer—the chairman of the Electoral Commission—is responsible for its conduct, and appoints regional counting officers and counting officers. Those officers will be the same people as the returning officers, but we will—if Parliament agrees—give the chief counting officer the ability to withhold the fee for their duties in conducting the referendum, if performance is not adequate. We will consider whether that has the desired effect, and will review the measure after the referendum to see whether we might want to consider it more widely.
Mrs Laing
I thank the Minister for his kind remarks earlier. I have for the first time just seen a good point—a plus point—to having the referendum. The Minister will appreciate that that measure could be a sort of pilot scheme for a system of accountability for returning officers, and that would be very welcome.
Mr Harper
I am very pleased that views, certainly on the Government Benches, are hardening in support of our Bill. I look forward to further progress today.
It is worth noting that, although my hon. Friend the Member for Epping Forest suggested that the Electoral Commission should have more powers to direct returning officers in their conduct of elections—not referendums—the Electoral Commission itself has called for greater accountability, but not for greater powers of direction, with the exception of the referendum, the outcome of which they are responsible for. We will think further about that, but we will first see how the step of making the Electoral Commission responsible for the fee for the referendum works—the pros and cons—and whether it might be something to bring in more widely for returning officers. The difficulty would be in deciding to whom they would be accountable, and who would make that decision. We will, however, look at that further, and it might be something to debate after the referendum.
In the six minutes that remain, let me just deal with some of the other issues that my hon. Friend the Member for Epping Forest, and other Members, raised. One issue that she raised, which was supported by my hon. Friend the Member for Northampton South (Mr Binley), was the hypothecation or ring-fencing of funding. My hon. Friend the Member for Epping Forest made two points. For national parliamentary elections, the funding, as she correctly said, is ring-fenced. It comes directly from the Consolidated Fund and the Government say to returning officers that for properly incurred expenditure to do with the election the money is payable from the centre. That is clear, and my hon. Friend made it clear.
The other point is about the money for electoral registration. At the moment, that money is not ring-fenced; it is part of the revenue support grant. I have heard a number of Members state that the money in that revenue support fund is not used for electoral registration, but there is no evidence of that. If people were to bring forward evidence, we would look at the issue very seriously. The hon. Member for Rhondda mentioned those points as well. Given that the electoral registration officer is a senior member of the local authority officer team, the acting returning officer responsible for delivering the elections is often the chief executive, and the other decision makers in local authorities are councillors who have to get elected, I do not understand why we should think it likely that that set of individuals would de-prioritise spending on elections, since that is something in which we as politicians have a great interest. So, I am not convinced intellectually that there should be a problem, and there is very little, if any, evidence that that is happening—if there is, the Government will look at it. It is not just a Treasury rule; it is the general view of this Government that we should allow local authorities to make judgments about how much money needs to be spent in different areas, although they do have legal duties to ensure that elections are well conducted and that the registration system works well.
As we roll out individual voter registration, I hope that we can tackle both sides of the coin. We can deal with the problem of people who are on the register but should not be—a number of Members mentioned that this morning—and, equally importantly, we can look at people who are eligible to vote but are not on the register. The resources issue is important, and I have written to every local authority chief executive about our data-matching pilots. I encourage Members to encourage their local authorities to participate. We hope to enable local authorities to use other public data sources to identify people who are eligible to vote but not on the register, or the other way around, so that they can target them and use limited resources more effectively, to ensure that the register is both accurate and complete. The funding for the pilots will be met from central Government. I encourage Members, particularly if they feel that there are problems in their areas, either with accuracy or completeness, to encourage their local authorities to participate. I hope that that reassures my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti), who raised some of those issues.
I have dealt with some of the issues raised by my hon. Friend the Member for Manchester, Withington. It is good to hear that the issue of the number of polling stations has been dealt with. He raised some very good points about the combination of elections, and about a differential franchise between the local, European and parliamentary franchises. We are alive to that issue, with the combined election and referendum that we hope to see next year, and one reason why we have been working very closely with the Electoral Commission and with those responsible for delivering elections is to ensure that there is clear guidance. In their planning for the referendum and the elections, the Electoral Commission and acting returning officers will take exactly that into account, to ensure that in parts of the country where they are not used to such a combination there is clear guidance and clear planning, to avoid those sorts of problems.
Finally, the issue of combination, which the hon. Member for Rhondda raised, is interesting, and we in the House need to think about that more widely. There is a view that no elections should be combined, but given that the Government are looking at more fixed terms, including a fixed term for this Parliament, and are also considering having more elections—for police commissioners for example—it would be difficult to have all those elections on separate days. It is worth thinking about the argument, “If you’re going to combine them you should go for it big time and make sure it’s well done,” and considering whether we effectively have a big democracy day in the same way as they do in the US, where everything is on the same day. It would be helpful if Members thought about that, and I am sure that we will get the opportunity to debate it in due course.
This has been a good debate. We have touched on a number of issues that are very important to Members, and I once again thank my hon. Friend the Member for Epping Forest for enabling us to have the debate. I look forward to debating with, or listening to, her this afternoon, when we continue consideration of the Parliamentary Voting System and Constituencies Bill.
Independent Financial Advisers
(13 years, 6 months ago)
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Harriett Baldwin (West Worcestershire) (Con)
It is a great pleasure to serve under your chairmanship, Mr Caton. I hope the Minister will forgive me for holding this debate on a day when he probably has quite a few other things on. As he knows, however, such debates are a bit of a lottery, and I was not expecting mine to come up today.
According to the Library, this is the first time that the regulation of independent financial advisers has been debated in a Chamber of the House, and we have to ask why. Colleagues on the Treasury Committee discussed the topic yesterday, and I have put my toe in the water by asking for a 30-minute debate today. Given the interest that I have encountered in the issue—I have had a binder full of correspondence since the debate was announced last Wednesday—I anticipate that this is not the last that we will hear of it.
Mark Garnier (Wyre Forest) (Con)
The interest that I have encountered is certainly unprecedented, and I too have a very large binder. Will my hon. Friend work with me to secure a Back-Bench business debate in which we might have an opportunity to debate the issue for up to three hours on the Floor of the House?
Harriett Baldwin
Yes. I thank my hon. Friend for that suggestion and I would be delighted to support it.
IFAs are regulated by the soon-to-be-abolished Financial Services Authority, the independent statutory regulator set up by the previous Government. Banking supervision is to return to the Bank of England, while many other regulatory functions will go to a new consumer protection body. Thus, this seems an opportune time for the House to debate some of the implications of those policies and some of the functions involved.
Fewer people are benefiting from defined-benefit pension schemes. More individuals are being asked to contact an IFA to obtain advice. Many will receive lump sums from an inheritance or perhaps a redundancy payout, and they will need professional advice to make the most of them. With auto-enrolment beginning in a few years’ time, people will also have to decide whether they need to opt out. Many younger people will leave university with student loans. Many older people will need to buy annuities or to make arrangements to pay for long-term care. All those transactions require some financial advice.
Ian Lucas (Wrexham) (Lab)
I previously worked as a solicitor and employed an independent financial adviser. Does the hon. Lady agree that it is better to receive advice from an independent financial adviser than a tied agent?
Harriett Baldwin
There are indeed advantages, and I thank the hon. Gentleman for his helpful intervention. He obviously has a lot of experience of dealing with the sector.
It is estimated that there are about 45,000 IFAs in the country, many of whom are sole traders.
Charlie Elphicke (Dover) (Con)
Should those tens of thousands of small traders not be encouraged to use their entrepreneurialism to help people save, rather than being squashed by the dead hand of unthinking regulation?
Harriett Baldwin
I thank my hon. Friend for that interesting intervention. I shall come to precisely that point in a moment.
The market for financial advice suffers from comparatively low consumer trust. Consumers find it difficult to engage with the financial services industry—banks are not exactly the most popular institutions in the country at the moment. Economists would describe buying financial products as a transaction in which consumers have asymmetric information; in plain English, the buyer knows a lot less about the product than the seller. There is therefore a need for proper independent advice.
Along with banks, IFAs have been guilty of selling certain products because they give a better commission. Like banks, IFAs have been found to have mis-sold private pensions to public sector workers. Like banks, they have mis-sold high-income precipice bonds. Often, they have sold products that simply performed badly or carried high charges. There is no doubt that the industry’s reputation could be improved.
Jesse Norman (Hereford and South Herefordshire) (Con)
My hon. Friend mentioned the Treasury Committee, and it may be of interest to note that I was in the Committee yesterday when it talked about this issue. Interestingly, the response from the Association of Independent Financial Advisers and the Association of Private Client Investment Managers and Stockbrokers was that the retail distribution review, having started with high ambitions and high principles, not only ran four times over cost, but conducted a somewhat ineffective consultation. I put the question whether, in that aspect at least, it had become a bit of a fiasco, and the witnesses concurred, very much to my surprise. My hon. Friend might want to bear that in mind in future discussions.
Harriett Baldwin
I thank my hon. Friend and neighbour. He is a distinguished practitioner and member of the Treasury Committee. I am very interested to hear about the evidence yesterday.
We should not underestimate the costs of mis-sales to consumers. The FSA’s cost-benefit analysis assesses the cost to consumers of the pensions mis-selling scandal at £45 million per annum. In reaction to such circumstances, the FSA has spent the past several years consulting on how to address the issues involved. I share its goal of improving consumers’ perception of the industry and access to high-quality investment advice.
Mark Pawsey (Rugby) (Con)
Does my hon. Friend agree that the new regulations will raise the bar in terms of the standard of advisers, which means that there will be fewer financial advisers in future and that individuals’ ability to seek advice will be restricted, not enhanced?
Harriett Baldwin
My hon. Friend raises an important point, and I will come to that.
The FSA has come up with proposals to address the issue. They are close to final, and the board is likely to take a decision in December. Under the current plans, the proposals will be implemented by the end of 2012. As they stand, the proposals are known as the retail distribution review. As colleagues have suggested, they raise real questions about the role of regulation and the laws of unintended, and indeed intended, consequences in terms of regulation.
Andrea Leadsom (South Northamptonshire) (Con)
Is it not also true that not only will there be a reduction in the number of IFAs, but many of those who have been in the industry for a long time, who are very experienced and who understand the market and customers very well, will unfortunately inadvertently fall foul of the regulations?
Harriett Baldwin
My hon. Friend, who is also a member of the Treasury Committee, makes an extremely important point, which I will mention in a moment.
The impact of the proposals has been brought to my attention by a range of independent financial advisers, who are also constituents. Acting independently of one another, they all came to see me in my advice surgeries. Under the RDR proposals, each IFA should pass a set of exams and then spend at least 35 hours per annum on continuous professional development. Hon. Members should note that the requirement is 35 hours and that 34 hours would not be acceptable. IFAs also need to obtain a statement of professional standing from an accredited body. Someone who, today, is a qualified and approved IFA but who does not meet those requirements by 31 December 2012, will no longer be able to practise his or her profession, despite many years’ experience.
Mr David Nuttall (Bury North) (Con)
Is not the problem with the RDR that many of our constituents will be left without appropriate financial advice because of the introduction of the new rules? Often it is the most experienced IFAs, with the most years of experience, who will be forced out of the profession.
Harriett Baldwin
My hon. Friend makes a good point, which I am about to make myself, so I thank him for his helpful intervention.
Advisers will have to charge explicitly for their services and will not be able to accept commissions. Oxera, the market research firm employed by the FSA to assess the costs and benefits of the changes, expects the net present value of the compliance costs to the industry to reach between £1.4 billion and £1.7 billion. Worryingly, the estimate in 2008 was £600 million. That cost will be passed directly to consumers. The latest estimate represents an astonishing 180% increase.
Oxera expects the increase in compliance costs to be passed on to consumers, so they will pay for the changes. Charges will be higher, so sales of financial products will decline. The majority of adviser firms expect a reduction in turnover. Consumers with smaller amounts to invest are much less likely to seek advice if they have to pay for it explicitly. Smaller firms of IFAs are the most likely to exit the market.
Ben Gummer (Ipswich) (Con)
We all want greater transparency in IFAs’ charges, but I am concerned about the direction in which the RDR is going, because of precisely that point. If we go down that route we shall restrict financial advice to the very wealthy, and do nothing to reverse the appalling savings ratio that we have inherited.
Harriett Baldwin
I agree, because according to Oxera’s survey for the FSA, 25% of firms are very or quite likely to leave the market. That will reduce access to advice for those living in rural constituencies such as mine. It will reduce access to advice for those with smaller amounts of money; the charges for explicit advice will be for those with higher sums of money.
Glyn Davies (Montgomeryshire) (Con)
Does my hon. Friend agree that there will be a particular effect on rural areas? I live in a rural area, where nearly all the financial advisers are small, one-person businesses. The imposition in relation to costs and time is particularly onerous for them. Many will simply close and the service in rural areas will disappear.
Harriett Baldwin
Yes, I agree. In London it does not really matter if one person goes out of business—there will be lots more financial advice available; but in rural constituencies such as mine and that of my hon. Friend there will be a significant impact on access.
The IFAs in West Worcestershire who have come to my constituency advice surgeries have also raised concerns about the exam. Most of the advisers I have seen have been—I know we should not mention age—in their late 50s or 60s. Speaking for myself—and obviously I am still very young—I am not as good at taking exams now as I was when I left university. That does not mean that I have not accumulated something else over the years. I hope that I have a little more wisdom and experience than I had then.
Mr Robert Buckland (South Swindon) (Con)
I have spoken to many local IFAs in my constituency and elsewhere, who provide localised, personal services to individuals who may not be of great net wealth, as my hon. Friend the Member for Ipswich (Ben Gummer) said. Does my hon. Friend agree that asking them questions about international arbitrage and the derivatives market is hardly relevant to the practice they have carried on for many years?
Harriett Baldwin
Indeed, that is a helpful intervention. I received a letter from someone in the north of England who was concerned about having to learn a lot about non-domiciled investors, which they did not think was very relevant in Sheffield.
In financial markets wisdom and experience are valued. Someone who has lived through a boom and bust cycle in the past is much less likely to believe that the latest investment fad will defy the laws of investment gravity. Someone who has seen a few economic cycles is much more likely to understand the ravages of inflation on savings. Someone who has been to a range of conferences over the years is more likely to know when something is really too good to be true. No exam can test that. Yet it is those experienced IFAs, who are often sole practitioners, who will find it hardest to take the time required to pass the specified exams.
George Hollingbery (Meon Valley) (Con)
Is not the situation also exacerbated by accounting rules? Being compelled to write off goodwill in one year, it is very difficult for groups of IFAs to acquire the business of smaller IFAs, which compounds the problem.
Harriett Baldwin
My hon. Friend raises an interesting point that I had not even thought of.
The experienced IFAs, who are often sole practitioners, will find it hardest to pass the exams. However, someone who has just graduated from university with a bachelor’s degree in financial markets—and I am not knocking that—will be immediately accredited by certain institutions. In the full file that I have received in the past few days are stories from experienced IFAs with unblemished regulatory track records, years of experience, happy clients and no complaints. Yet as a result of the rules, if they do not pass the exams they will not be able to ply their trade on 1 January 2013.
Esther McVey (Wirral West) (Con)
I thank my hon. Friend for securing the debate. I have had many letters from concerned constituents about it. Independent financial advisers feel that they will be put at a substantial commercial disadvantage by the new rules.
Harriett Baldwin
There is an important point to be made about how some of the larger organisations, and indeed some banks and bancassurers, will most readily be able to have their staff trained for the exams. However, that raises the question whether the exams will really test the skills needed by a good financial adviser. In the investment world, experience is valued and the FSA is imposing on the market a one-size-fits-all, prescriptive approach to education, at great cost to consumers, in return for a modest benefit.
I have written to the chief executive of the FSA and to date have received a letter, beginning, “Dear Mr Baldwin”, simply reiterating the FSA’s consultation paper conclusions. I would like to ask the Minister to answer a few questions. The FSA is the independent statutory regulator. However, it is answerable ultimately to the Treasury. Does the Minister believe that it is proportionate in the present case to impose a regulatory burden of £1.7 billion on consumers? Is the Minister concerned that up to 25% of smaller advisers are likely to leave the industry, handing a competitive advantage to banks and bancassurers? Is he convinced that the banks will not be able to find a way to reward employees for pushing certain products? Does he share my concern that the FSA’s own impact assessment suggests that those who get reduced access to advice are likely to be the smaller, poorer consumers in more remote areas?
Does the Minister think that there might be a more proportionate way for the FSA to achieve its objectives? For example, IFAs who have passed exams could add the letters of qualification to their business cards. Consumers could then be educated and could choose an unqualified adviser if they preferred, but would come to know over time that there was a brand to the qualification.
Jesse Norman
There is also a simple solution for firms of more than one person, which is that the senior member can sign off on the work or qualification of the person who has not received formal accreditation. That allows for the sharing of liability, the preservation of standards within the firm and the guarantee of good quality to the customer.
Harriett Baldwin
I thank my hon. Friend for that helpful suggestion.
I would also like to ask the Minister how changing from commissions, which are currently exempt from VAT, to advice, which will attract VAT, will not add a further cost for consumers.
Andrew Bingham (High Peak) (Con)
On the subject of commissions, the IFAs in High Peak who have spoken to me are concerned that removing the option of commission and replacing it with up-front charges will prevent people from getting the independent financial advice they need. Conversely it will prevent IFAs from taking the exams, because of the downturn in work. That means many people will not get the independent financial advice they will need.
Harriett Baldwin
Yes, that is a question to be considered as well.
Does the Minister really believe that consumers should not be allowed to choose whether they pay explicitly for advice or whether they pay through commission? Does he believe that it is consistent with UK legislation retrospectively to change the qualification regime for a whole class of practitioners? Finally, does he agree with one commentator, who described the RDR as
“a sledgehammer to miss a nut”?
The Financial Secretary to the Treasury (Mr Mark Hoban)
I think that that commentator was my right hon. Friend the Member for Wokingham (Mr Redwood).
I congratulate my hon. Friend the Member for West Worcestershire (Harriett Baldwin) on securing the debate. She said that it is the first debate we have had on IFAs for some time, which surprises me given the amount of interest it has generated and the volume of correspondence that hon. Members received during the previous Parliament about the RDR.
The structure of regulation in the UK means that regulation is the responsibility of the FSA, not the Treasury. Treasury Ministers cannot dictate to the FSA how it should do its job. That might seem to my hon. Friends an attractive idea in the present circumstance, but they may be able to think of other circumstances where it would be less attractive. Today of course we are announcing the settlement in relation to Equitable Life. Those losses arose when the Government were responsible for the regulation of financial services, so do not be tempted down the route of suggesting that the Treasury should do all financial regulation.
Access to high-quality and independent financial advice is vital to increasing confidence in the financial sector and to ensuring that people are encouraged to save, plan for the future and make appropriate choices. As my hon. Friend said in her speech, the impact of receiving poor adviser advice can be financially disastrous for the consumer. We do not need to go far to find evidence of that—look at cases of widespread mis-selling of products such as pensions and endowments and, more recently, of structured products.
The Financial Services Authority’s view is that the regulation of independent financial advisers, in particular through the retail distribution review, is essential in rebuilding trust in the industry when confidence in financial services is at an all-time low.
Dan Rogerson (North Cornwall) (LD)
The Minister is clearly outlining that risks are involved in the advice given by independent financial advisers. Does he agree that a risk-based approach, which is responding to complaints and which might require longer-standing financial advisers to undergo retraining, could be a better way of tackling the issue?
Mr Hoban
That is an interesting point, but my hon. Friend should bear in mind that with some products, which might be long term, it can be some time before an issue emerges. If people buy a product in their 30s—a pension product, for example—they might only find out in their 60s that they had been mis-sold something. There is a real issue about looking at complaints records in that way.
The retail distribution review aims to address the structural problems in the distribution of retail financial products, such as conflicts of interest, transparency and professional standards. Although the RDR is the responsibility of the FSA, I fully support its aims—all colleagues should support those objectives. I hope that the RDR will lead to increased confidence, simplicity and clarity in the financial advice sector.
On professionalism, hon. Members are familiar with the fact that the rules seek to ensure that all financial advisers adhere to common professional standards, including an increased minimum qualification level, effective maintenance of knowledge and subscription to a code of ethics. The current minimum financial adviser qualification is at the same level as a diploma in shift management offered by McDonald’s. We should all reflect on that for a moment: the products being sold by IFAs are infinitely more complex and more long-lasting in their effect than a Big Mac.
The rules aim to improve trust and the service offered to consumers. Consumers will have confidence that their financial adviser is up to the job. Investment advice will be seen as a professional activity, financial advisers will have a new status and fresh talent will be attracted to the industry. The FSA reports that, rather than being put off by studying, many financial advisers are going on to obtain more advanced qualifications than those required by the RDR. One of my constituents, who is an IFA, has said that when the FSA raised the minimum bar he wanted to go even further, to demonstrate that his qualifications, knowledge and technical expertise went beyond those of his peers. The FSA also noted that take-up for financial planning degree courses has increased.
I know that many financial advisers have concerns about meeting the increased qualification standards required by the RDR, but almost half of advisers already meet the required level, with two years to go before the RDR is introduced.
Many financial advisers feel that the new rules should be “grandfathered,” so that those advisers with experience are exempt. However, how do we know how good those advisers are? Someone might have been in the industry for some time, but is that necessarily a guarantee of the technical expertise and quality of advice?
Mr Hoban
I only have seven minutes left and my hon. Friend the Member for West Worcestershire gave way quite a lot, so I would like to make some progress.
The existing qualification requirements for advisers focus mainly on knowledge, whereas the new higher level is primarily about understanding and applying that knowledge, which are core skills for every adviser to demonstrate. The result is a level playing field where consumers can have confidence that their adviser meets a required standard.
IFAs are not the only people who have an interest in this debate. The consumer group Which? welcomes the FSA’s increased standard, as it does not feel that the current qualification level is sufficient.
Advisers are required to maintain competence under the FSA’s current rules as part of their approval conditions, and so those advisers that have actively engaged in maintaining competence by keeping up to date with market developments should not have to commit a significant amount of time to study. Continuing professional development can be used to fill any gaps between existing and revised examination standards, and financial advisers can opt to undertake an alternative basis of assessment, instead of a traditional written qualification. That addresses one of the points made by my hon. Friend the Member for West Worcestershire, about how someone who is slightly long in the tooth, as I am, might not be as exam-ready as someone straight out of university. The alternative assessment might well help advisers in such a situation.
On adviser charging, at present financial advisers earn different amounts of money as commission payments, depending on which particular firm they recommend a product from and on what product they recommend. That creates a potential conflict of interest which can be damaging to consumers and undermines trust in the investment industry. The RDR rules on adviser charging are designed to tackle the risk, as well as the perception that commission paid by product providers might bias advice.
FSA consumer research also found that only half of respondents understood how the value of their product would be affected by commission. To add to that, in October 2007, Which? conducted a survey of IFAs and found that 82% of advisers failed to explain the document on the key facts about the costs or to have a meaningful discussion with their client about how advice would be paid for. There is a big issue to be addressed—getting people to understand how they are paying for advice at the moment—and IFAs have a role to play.
It should be noted that consumers already pay for advice, through the commission structure in their product. We are not doing anything new by ensuring that consumers know how much advice costs. It is important that consumers understand the value that good financial advice can add and that we create a much more transparent market in which advisers compete on cost and quality. That is a good outcome for consumers.
My hon. Friend mentioned how banks reward employees for pushing certain products—I understand her point—and the FSA is to look into how the reward structures of in-house sales staff in banks affect their performance.
On ability to pay for advice, we need to bear in mind that not enough people are in receipt of financial advice. That is one of the reasons why our party, in opposition and now as part of the coalition Government, has been able to support the Consumer Financial Education Body, the introduction of a social responsibility levy on the financial services sector and the funding of a free national advice service, which will help people review their financial affairs regularly, plan ahead and ensure that they hold appropriate products. Such measures will help to tackle some of the advice gap. I hope that the industry will work in partnership with the CFEB and the Government to ensure access to financial advice.
A number of my hon. Friends raised the issue of the disproportionate impact of RDR on small firms. I appreciate that concern. Smaller IFA firms, in remote areas in particular, will feel the impact, and they are more likely to struggle to meet the challenges of the RDR proposal, unlike the larger IFA firms and the banks, and instead might decide to exit the market. However, the RDR will apply to all advisers in the retail investment market, not just to IFAs.
Although the change will bring challenges in the short term, it is important that we see the advice sector grow and strengthen in the long term. New and existing firms can increase supply in the long term to meet that demand, and indeed the FSA has found that a larger proportion of the costs of the RDR will be borne by larger firms.
In respect of the costs being passed on to the consumer, it is true that with the RDR come implementation costs. The Oxera research commissioned by the FSA found that such costs could translate into higher prices placed on consumers in the short term. However, over the longer term, it concluded that the higher prices could be competed away through increased transparency of prices, encouraging consumers to shop around.
I could respond to many more issues. I will write to my hon. Friend the Member for West Worcestershire on RDR and tax issues.
We all want to ensure that consumers have access to good-quality advice, delivered in a transparent and professional way, so that people understand what they are buying and have paid for. I believe that that will be taking a major step forward in improving the financial outcomes for our constituents.
Ahmadiyya Community
(13 years, 6 months ago)
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Siobhain McDonagh (Mitcham and Morden) (Lab)
Let me start by apologising for any words that I may pronounce incorrectly. No insult is intended, and I stand to be corrected on my pronunciation. For someone with a name like Siobhain McDonagh, that is quite a thing.
Britain’s Ahmadiyya Muslims work hard and contribute greatly to this country. Their belief in peace and religious tolerance is an example to us all, and is to be expected from a community whose motto is, “Love for all and hatred for none.” Their fifth spiritual head, Mirza Masroor Ahmad, lives in the United Kingdom, and their headquarters are in south London. Indeed, one of the world’s biggest Ahmadi mosques is in Morden. It has capacity for 10,000 people, which means that I have many Ahmadi constituents, as do many neighbouring seats. I am pleased to say that we now have the backing of enough parliamentarians to start up an all-party parliamentary group for the Ahmadiyyan community, and we will hold our first ever meeting in the next few weeks.
In my experience, my Ahmadi constituents are well-educated, cultured and have a sophisticated and peace-loving approach. I am therefore delighted to be granted this opportunity to talk about the Ahmadiyyan community. I understand that this is the first ever parliamentary debate specifically to discuss the Ahmadiyya faith, and it is a great honour to be leading it. However, I am extremely sorry to bring this community’s concerns to the House at this particular time. The circumstances that led me to ask for a debate are extremely sad. On 28 May, nearly 100 Ahmadiyya Muslim worshippers were brutally murdered in two separate attacks in Lahore. However, what makes the story especially poignant is not just the fact that the Ahmadi are so peaceful but that their murderers were also Muslim. What I hope to do today is to examine why the attacks took place, then ask whether there is anything that we in Britain and the wider community can do to prevent such atrocities happening again in the future. Finally, I want to assess what the implications are for Britain of how the Ahmadiyya community in Pakistan is treated and what we can do about it.
To begin, I need to say a few words of introduction about the Ahmadiyyans. Despite the fact that they have translated the holy Koran into more than 60 languages, span 195 countries and have more than 15,000 mosques and a membership exceeding tens of millions, theirs is a faith that is little known outside their community. The Ahmadiyya Muslim community was founded in 1889 and arose out of the belief that the long-awaited Messiah had come in the person of Mirza Ghulam Ahmad of Qadian. Ahmad claimed to be the metaphorical second coming whose advent was foretold by Mohammed. Obviously, that contradicts the view of mainstream Muslims who believe that Mohammed is the last prophet. Nevertheless, the Ahmadiyya Muslim community is a very peaceful religion. They believe that there are parallels between Ahmad and Jesus, as God sent both to end religious wars, contend bloodshed and bring peace. For instance, they reject terrorism in any form. Ahmad declared that jihad by the sword had no place in Islam. Instead, he wanted his followers to wage a bloodless, intellectual jihad of the pen to defend Islam.
In a similar vein, Ahmadis believe that theirs is the only Islamic organisation to endorse a separation of mosque and state and to champion the empowerment and education of women. Ahmad also warned his followers not to engage in irrational interpretations of the Koran or to misapply Islamic law. In Britain today, we regard such attributes as modern and tolerant. However, those values are not shared by some other Muslim traditions, particularly those with a more fundamentalist viewpoint. For such fundamentalists, belief in a false prophet is heretical enough, but for the Ahmadiyya Muslim community also to follow teachings that fundamentalists believe are wrong is adding insult to injury. Consequently, Ahmadis have long faced persecution. Their first martyr was killed in custody in 1901, and it is estimated that there have been about 200 deaths in total. Of course, religious disagreements have cost countless lives over the years throughout the world. Religions have a long and very unhappy history of attacking each other for worshipping the wrong prophet, even much closer to home than in Pakistan.
I am a Catholic and we are as guilty as anyone. A Catholic pope promised heaven to mediaeval thugs who took part in murderous crusades against followers of a prophet whom they believed was false—Mohammed. That period of history continues to haunt us. This country is not immune to using discrimination against religions we have not liked, with Catholics on this occasion often being the victims. It is only a few years ago that I helped to change the law to allow former Catholic priests to become MPs. Although that law was a throwback to a much earlier time, there are, even in our more recent history, examples of discrimination of which we should not be proud, particularly in Northern Ireland. It is hard therefore to stand here and lecture other countries about their practices, and we need to remain humble. The fact that religions have been persecuting each other for centuries does not make it right, especially in Pakistan where extreme groups such as the Taliban are already very active in creating a lot of volatility.
We are lucky in this country in that, on the whole, our religions can carry on side by side without conflict, respecting each other’s right to worship. In Pakistan, most mainstream Muslims are horrified that anything could happen to their fellow countrymen just because they have a different religion. They are as shocked as we are by attacks such as those in Lahore. However, discrimination is an everyday reality for many Ahmadis living in Pakistan, and it is embedded in the Pakistani constitution.
Pakistan’s founder, Mohammad Ali Jinnah, may have said that the country should be a secular state in which all were equal and religion was no business of the state, but today’s Ahmadis do not enjoy equality. Pakistan was created in 1947. In 1948, Major Dr Mahmood Ahmed was lynched by a mob at Quetta. In 1950, Ahmadis were murdered in Charsadda, Okara, Rawalpindi and Mansehra. By 1974, riots and killings, attacks on mosques, assaults, arson and looting were widespread, and the organs of the state were not neutral. The police arrested victims and not perpetrators. In September 1974, Prime Minister Bhutto amended the constitution and declared that Ahmadis were officially non-Muslim. That was followed in the 1980s by measures introduced by Zia ul-Haq’s Government to Islamicise Pakistan’s laws.
In 1984, Ordinance 20 significantly restricted Ahmadi freedom of religion or expression, threatening up to three years in jail for any Ahmadi who, for example, called themselves a Muslim. Since then, thousands of Ahmadis have been arrested. In 1989 and again in 2008, the entire 50,000 population of the Rabwah was charged with practising Islamic worship. Ahmadis are prevented from holding public meetings and are not even able to vote or to register to vote because registering to vote would require them to deny their faith. Ahmadis are barred from entry to public office except at the lowest level. In order to claim to be a Muslim on the Pakistani passport, they are forced to sign a declaration that says:
“I consider Mirza Ghulam Ahmad to be an imposter.”
Persecution by the state is at times systematic. My fear is that such discrimination helps to feed the ideology of groups such as the Taliban and offers them a justification for some of their worst excesses. It does not legitimise what they do, but it might make them feel, wrongly, that they have some kind of legitimacy. Even if there was no violence, it makes Ahmadis feel threatened. Therefore, the Pakistan constitution poses a problem, as it gives some perverse encouragement to extremists and belittles the Ahmadi community.
Non-state persecution of Ahmadis is very worrying and appears to be growing. According to Pakistan’s Human Rights Commission, Ahmadis face the worst treatment of anyone in Pakistan. The media there are often virulently anti-Ahmadi, broadcasting phrases such as, “Ahmadis deserve to die.” In particular, the Khatme Nabuwwat movement carries out regular activities to oppose Ahmadi Muslims. It calls for the banning of Ahmadiyyat and for the killing of Ahmadis. It incites attacks against Ahmadis in speech and broadcast, and is credited with introducing the widely used phrase, “wajibul qatl” which means “those who deserve to be killed”.
In the past decade, there has been an increasing number of murders and attacks of Ahmadis, and an increase in the number of pre-planned and targeted attacks on Ahmadi mosques by Islamist militants. As we know, those attacks culminated in the Lahore attacks, when two mosques were stormed in a well-planned assault that lasted for about four hours. At one stage, more than 1,000 worshippers were trapped in the Darul Zikr mosque, trying to escape militants armed with guns and grenades. The Baitun Noor mosque was also stormed in a co-ordinated attack. The multiple suicide attacks by the Punjabi Taliban took place slowly, with terrorists methodically throwing hand-grenades among their hostages and climbing the minarets to fire at them from above. When the attackers started to run out of ammunition, they began detonating their explosive vests. Although the police came, they arrived late—even after the media arrived—and the only attackers who were caught were captured by unarmed Ahmadis.
The loss of life and the prolonged and bloody siege prompted widespread condemnation and global media coverage, and it is the reason why we have asked for this debate today. Many people have been in touch with me about the outrage in Lahore. Shortly after the murders, I spoke personally with Rafiq Hayat, the head of the UK’s Ahmadi community. I wanted him to know that I was very concerned about what had happened and I wanted to see if I could do anything more to help.
Henry Smith (Crawley) (Con)
In my constituency, the attacks in Lahore in May sent a shockwave through the local Ahmadi community. However, I was very impressed that, despite that sense of shock, several months later the community displayed its altruistic and inclusive nature when it invited representatives of many different faiths in my constituency—Christian, Hindu, Sikh and Muslim—to come together for a celebration at the end of Ramadan. Is that not a great example of the way forward and of how we can include all communities together, with respect for all different faiths and religions?
Siobhain McDonagh
I totally agree with the hon. Gentleman and, as I have been arguing, such inclusiveness is the hallmark of the Ahmadi faith.
We thought that it was important that Britain send a strong message to Pakistan after the attacks in Lahore, saying that we were appalled by what had happened and that more must be done to support Ahmadi worshippers in that country. At the time of the attacks in Lahore, we were concerned that the British Government should highlight both Pakistan’s duty to protect Ahmadis and the poor treatment that Ahmadis receive in Pakistan. As my right hon. Friend the Member for South Shields (David Miliband) said when he was my party’s foreign affairs spokesperson:
“It is when the international community has taken its eye off the ball in Pakistan that instability has increased…Internally, Pakistan has a duty to protect minority groups and needs the support of its allies to do so.”
Rafiq Hayat told me that he agreed with that sentiment and I hope that the Minister can join us in expressing the Government’s views to the Pakistan Government in his speech later in the debate.
I am concerned that the discrimination against Ahmadis that is embedded in the Pakistani constitution can be construed by militants as giving them legitimacy. The Pakistani Government are already facing many difficulties with al-Qaeda and other militant groups, and the British Government need to work hard to convince them to help to fight global Islamic terrorism. As the June issue of Terrorism Monitor notes:
“As the Pakistani Taliban are trying to spread their war on the Pakistani state, they are likely to continue to target minorities like the Ahmadis in their efforts to create instability.”
If we do not persuade mainstream politicians in Pakistan to stand up for the Ahmadi Muslim community, we risk further Islamicist militancy. Moreover, if the militancy continues in Pakistan, it not only threatens Ahmadis but the whole international community. After all, any increase in Islamicist activities also affects us here in the UK, so it is in our own interests for the Government to seek to persuade Pakistan’s Government to show more tolerance to the Ahmadi Muslim community.
I therefore urge the Minister to ask his colleagues to raise this matter with Pakistani Ministers in the course of their regular meetings and to keep the new all-party group informed of any progress. The truth is that the Pakistani extremists’ hatred of Ahmadis is already being exported. In fact, it is here in the UK today.
Last week, south London local newspapers carried front page articles about discrimination against and intimidation of Britain’s Ahmadi community. The police are appealing for information about inflammatory leaflets that have been distributed across south London, apparently by Khatme Nabuwwat, as part of a targeted ideological campaign, and they have said that an investigation into alleged hate crimes is ongoing. They have also said that a teenage Ahmadi girl gave them a statement, claiming that a leaflet that was written in Urdu said:
“Kill a Qadiyani and doors to heaven will open to you”.
Another KN leaflet, entitled “Deception of the Qadiyani”, was recently displayed in the window of the Sabina Hair and Cosmetic shop in Mitcham road, Tooting. When the local Guardian newspaper confronted staff at the shop to ask why they had put up the leaflet, a worker said:
“These people are not Muslims. I did it myself. They don’t believe that prophet Mohammed is the last prophet.”
Many Ahmadi shopkeepers are worried about the future of their businesses after clerics demanded a boycott of their shops. Imam Suliman Gani, of the Tooting Islamic Centre, apparently pleaded with the owner of the Lahore halal meat shop in Tooting not to sell his business to an Ahmadi man, saying:
“Since the Qadiyanis are routinely deceptive about their religion, there was a potential risk of Muslims being offered meat that wasn’t necessarily halal.”
Yet another leaflet that was posted on the wall of the Streatham mosque called for a boycott of the Lahore halal meat store.
The discrimination is increasing. An Ahmadi butcher who came to London in 2001 after fleeing Pakistan has just won an employment tribunal after being sacked by the owner of the Haji halal meat shop in upper Tooting. The owner, Azizur Rahman, had put pressure on his employee to convert to the Sunni Muslim faith. Apparently, Mr Rahman said that pressure was placed on him
“by the head of the Sunni sect who had helped Mr Rahman to gain admission for his daughters to a single sex school for girls.”
Mr Rahman also claimed that he had been influenced by a conference hosted by KN at the Tooting Islamic centre in March, where worshippers were ordered to boycott Ahmadi-run shops. During that conference, the KN’s Abdul Rehman Bawa said:
“I don’t know why our sisters or mothers are talking with these Qadiyani and making friendships...Don’t make friends with them...They are trying to deceive you, they are trying to convert you from Islam to Qadiyanism.”
According to the local Guardian newspaper, the owner of one Tooting halal butchers shop said that his trade had virtually halved in three months, and claimed:
“Some people refuse to come here just because I am Ahmadi. They use words against me like ‘Kafir’, which means I am not Muslim. I’ve lived here for 13 years and lots of people know me in Tooting, but this situation has become so much worse now.”
Furthermore, the Tooting Islamic centre was at the centre of another controversy, when an election hustings in April was disrupted by anti-Ahmadi protests. The Tory candidate was mistaken by a group of fundamentalists for the Liberal Democrat candidate, who is an Ahmadi, and he had to be locked into a room for his own safety.
I appreciate that not everything that appears in the newspapers is the whole truth and that the real story about anti-Ahmadi activities in this country may be more complicated and untypical. I also do not want to focus on Tooting any more than anywhere else, because I have lived in the Tooting area all my life and there is nowhere else in the world that I would prefer to live. My own experience is that the vast majority of mainstream Muslims are wonderful people and respect their local communities in peace.
We are still a long, long way from a Lahore-style attack happening in south London, but the emergence of anti-Ahmadi activity is a great concern. I ask the Minister to address the issue of how groups originating in Pakistan are encouraging illegal discrimination and inciting hatred in this country, and to raise it with colleagues at the Home Office and other agencies, including the police. None of us wants to see the Pakistani attacks repeated anywhere else. The Pakistani Taliban and groups such as KN have no place in a tolerant society and Ministers must exploit all this country’s diplomatic skills to work with the Pakistani Government.
In the UK, most of the time, people from different religions live side by side, even though we each believe that the other worships a false prophet. I include the vast majority of the mainstream Muslim community in that. Muslims are among the most peaceful, tolerant and understanding people in our community, and I say that as a south London MP with a very diverse constituency. However, for the sake of Ahmadis here and in Pakistan we must work towards a greater understanding of the Ahmadi Muslim community.
I hope that the Minister can make a commitment today to raising our concerns with his colleagues in the Home Office and the Foreign Office, with the police, with the Pakistani Government and with the Commonwealth. I also hope that our new all-party group will contribute towards a greater understanding of Ahmadis, because our aim is for the whole world to share and respect the Ahmadi slogan, “Love for all and hatred for none”.
Tom Brake (Carshalton and Wallington) (LD)
It is a pleasure to serve under your chairmanship for the first time, Mrs Brooke. I congratulate the hon. Member for Mitcham and Morden (Siobhain McDonagh) on securing this debate. In spite of our political differences, we often make common cause on issues. I hope that she will therefore welcome the fact that the funding for St Helier hospital has been re-announced in today’s comprehensive spending review; that is a success that she can share with me and, indeed, with the Minister of State, Department of Health, my hon. Friend the Member for Sutton and Cheam (Paul Burstow). I am also pleased to make common cause with the hon. Lady in supporting the Ahmadiyya community. I support her work and welcome the fact that she is setting up an all-party parliamentary group on the issue. I am happy to be a member of that group and to facilitate its establishment.
In her opening remarks, the hon. Lady outlined well the position of the Ahmadiyya community around the world and the difficulties and risks that Ahmadiyyas face in seeking to practise their peaceful religion in various countries. Like her, I have had the pleasure of visiting the mosque in Morden. I went a couple of weeks ago with my hon. Friend the Member for Sutton and Cheam, who I know would have wanted to participate in this debate if his ministerial duties had not kept him elsewhere. We talk a lot about the big society at the moment. The building of the mosque is a good example of how a community can work together and draw on the resources at its disposal. It is a mosque of great stature and presence, and it sets an example for the rest of us. Hon. Members who visit can see the library, the TV station and the facilities for both men and women to worship.
I also welcome the fact that in a similar big-society vein, the Ahmadiyya community is working locally with other faiths to secure a large open space immediately opposite the mosque for the widest possible community use. For me, that is the thing that resonates most and comes across most strongly about that community: the willingness to work with other faiths and people of no faith on issues that are important to us all. That is one of the community’s strengths that we should respect, which is why it is particularly depressing that, as the hon. Lady described, Ahmadiyyas face such risks and challenges around the world and, increasingly, in the UK. I will not repeat the examples that she quoted, but I will say one thing about the incident at the Bentall centre in Kingston. Those who know Kingston will know that if people are inciting hatred and potentially putting lives at risk in the Bentall centre, we have a wider problem in the country as a whole. One could not find a more affluent middle-class environment than the Bentall centre.
When the Minister responds, will he clarify what discussions he is having with the Home Office about the issue, particularly in relation to the Prevent agenda? The Prevent agenda—it is currently under review, which I welcome—is about preventing extremism from developing within communities. It seems to me that there is a risk of that at present, and I hope that he has had or will have discussions with the Home Office about how the Prevent agenda can be brought to bear on the issue. He might also be able to comment on the YouTube clips. I do not know whether he has had an opportunity to see them; I recommend that he does so, and that he reads the translations provided. He might then want to reflect, if he has not already done so, on whether there are implications under the Racial and Religious Hatred Act 2006 for some of the statements being made.
That is where I shall leave my comments, as many other hon. Members clearly want to speak. What I have seen on YouTube seems to go beyond a discussion about the relative merits of religions, which is what I think we all want to facilitate, and the Home Office and Foreign and Commonwealth Office need to respond to that agenda. I hope that we will hear a forceful response from the Minister shortly.
John McDonnell (Hayes and Harlington) (Lab)
I apologise for being absent, Mrs Brooke; I will be chairing a meeting at half-past 3, so I will miss the Front-Bench responses. I congratulate my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) not just on securing this debate but on her continued commitment to the Ahmadiyya community over the years and her dedication to a constituency that she clearly loves, although she could relocate to Hayes.
For me, the issue is fairly straightforward. In this debate, we are setting the agenda for our new all-party group. The two issues topmost on that agenda will be the discrimination that might be occurring in this country and attempts to divide our communities, but the attacks in Pakistan are also an issue. Over the years, many of us have signed early-day motions on discrimination, but we are deeply shocked by the attacks in Lahore. I think the head count was 94 dead and at least 100 injured, some very seriously. The severity and scale of the attacks gave us a shock.
All parties have made representations to the Pakistani Government about discrimination against Ahmadiyyas, as did the previous and incoming Foreign Secretaries, but we still have had no movement on some key issues. First, working with Human Rights Watch, we asked for the repeal of the blasphemy laws in order to eradicate them from the Pakistani legal system. Secondly, we mentioned the failure over years to prosecute the perpetrators of attacks on the Ahmadiyya community. I am aware of no prosecution in the past 15 years in Pakistan for a serious attack on members of that community. Thirdly, we attempted to see how we could work with the Pakistani Government to combat persecution and harassment overall and understand in greater depth the motivations for such attacks. In many cases, it is small groups of extremists who perpetrate such attacks, but a culture of victimisation, persecution and discrimination against the Ahmadiyya community has also built up in Pakistan and infiltrated other communities around the world. I will welcome any Ministers who come along to the early meetings of the all-party group to report on the progress that they have made in their representations to the Pakistani Government on those three issues.
We are now encountering problems in this country. My constituency has a relatively small but active Ahmadiyya community. I convene a regular meeting of religious leaders in my community every couple of months. The Ahmadiyyas are active representatives who have involved themselves in every community campaign and every charitable act and target that we have set ourselves, ranging from getting involved in local community groups and festivals to running marathons. They are excellent contributors to the local community.
The Ahmadiyyas in my area have set up a centre in the constituency of the right hon. Member for Uxbridge and South Ruislip (Mr Randall). It has taken over the old Irish centre, of which I was a member, the Irish community there having moved elsewhere. I will miss having a pint of Guinness there, but I welcome the centre. Immediately the centre was established, it opened its doors to the wider community. We had a session there a few weeks ago on the theme, “Love for all, hatred for none” in which representatives from the local community and all religions were invited in for a genuine discussion of local issues that we should address together. It demonstrated the commitment of the Ahmadiyya community to my local area.
We have also launched an ad campaign in Uxbridge featuring “Love for all, hatred for none” on the sides of buses. In addition, the Ahmadiyya community leafleted every house in my constituency with a similar message of peace. In my area, all that work is establishing the Ahmadiyya community in a very close, warm and encouraging relationship with the wider community. However, there are real fears about what has happened in south London and that the situation will infect the wider community, resulting in further victimisation, discrimination and, indeed, persecution of the Ahmadiyya community in this country.
For that reason, I hope that the second item on our all-party group agenda will be about receiving a report back from Ministers on the issues surrounding liaison, through the Home Office, with the Metropolitan police. What monitoring of these activities is going on, and what intelligence do we have? We then need to consider how to devise a strategy to deal with the matter. The problems under discussion are based on profound ignorance, which some elements within our society are willing to exploit to their advantage. If we can nip that in the bud at the earliest opportunity, combating discrimination against the Ahmadiyya community may shine as an example that could well provide us with lessons we can learn from in relation to Pakistan and elsewhere.
Jane Ellison (Battersea) (Con)
I congratulate the hon. Member for Mitcham and Morden (Siobhain McDonagh) on securing an important and timely debate. In my constituency of Battersea, like so many London seats, there are communities of people who have come to the UK from all over the world—some many decades ago and some more recently. During the four years that I was a candidate and in the five months that I have been an MP, I have met and visited a number of different faith communities to get to know them and understand their concerns. The Ahmadi are one of those communities.
Although I was previously unfamiliar with the beliefs and traditions of the Ahmadiyyan faith, from my first introduction to the community I have been made very welcome and kept well informed. I am grateful to the Ahmadiyyan national president Mr Rafiq Hayat, my local Battersea president Mr Tariq Uppal and my friend Tariq Ahmed for the efforts they and others have made to keep me briefed about issues of interest and concern. I am also grateful to them for ensuring that I know more about the Ahmadi and the important role that they play in the life of this country and my local community.
The London mosque, a very long established place of worship and the site of the head office of the Ahmadiyyan Muslim Community UK, is in my neighbouring constituency of Putney. The Economic Secretary to the Treasury, my hon. Friend the Member for Putney (Justine Greening), is currently in the main Chamber, but she has a long-standing and positive relationship with the Ahmadi community and is taking a close interest in this afternoon’s debate.
I was aware of the long-standing tension that exists between some other Muslim faith groups and the Ahmadi Muslim community, especially in Pakistan where—as has been mentioned—persecution of the Ahmadis is, sadly, written into the constitution. However, it was still a huge shock and very distressing to hear of the Lahore massacres in May. They have been described already. Those worshippers were murdered with grenades, suicide vests and automatic weapons. As we heard, many people were killed and injured. Tragically, a local Putney resident—a much-loved husband and father, Mr Muhammad Bilal—was one of those people murdered.
Although one of our fellow citizens was caught up in the dreadful events in Lahore, it is always tempting to look at bad things happening in a foreign land and hope that we might somehow be insulated from them. We might be tempted to think that such events spring from a tradition very different from our own and that it could not happen here. However, this country has long-standing and very close political and diplomatic ties with Pakistan, which have been reinforced through the bonds of friendship and family over many decades. That has been manifested in many positive ways. Most recently, there has been a hugely generous response from the British people to the devastating floods that affected millions of people in Pakistan.
However, there have also been some less welcome developments that have resulted in part from the ongoing close ties of culture and religion between Pakistan and its diaspora. The Ahmadi Muslim community in the UK has noticed that disturbing trend in the months since the Lahore massacres. As has been alluded to, the persecution of Ahmadis has intensified in tone and frequency around our country, particularly in south-west London. There have been the incidents described today of intimidation during the general election, and posters and leaflets with aggressive and derogatory messages have appeared around the area. I have been shown images of posters put up in Scotland that denounce Ahmadis as infidels and publish their place of worship. That leaves those observing the poster to read between the lines.
As the hon. Member for Mitcham and Morden has said, many local newspapers, including the Wandsworth Guardian, have reported on organised boycotts of Ahmadi- owned businesses. Much of the written material that has appeared treads a conscious line between what is illegal and what is merely very unpleasant. A recent Ofcom investigation into provocative broadcasts by faith-based satellite TV channels was hampered by uncertainty about where some programmes had been shown. Translation has also sometimes proved a problem, with the exact nuances of some terms often disputed, even though the intent is obvious. I ask my hon. Friend the Minister to keep a close liaison with the Secretary of State for Culture, Media and Sport with regard to broadcasting guidelines to ensure that loopholes are not exploited in such a way. I am certainly confident that we are not talking about restricting the right of free speech; we are talking about ensuring that people do not exploit loopholes to do the very opposite of the notion of free speech.
Whatever the details of individual events, we do not have to read too far between the lines to see that a deeply worrying trend is developing. Throughout history, we have seen where such trends have led. Indeed, we are reminded by the origins of the word “boycott” of the sectarian divisions that have scarred Ireland for many centuries. We must speak out now against persecution at home and abroad. Rather than keep our silence or let things be too low key, we must speak out before it is too late and further tragedies take place abroad or here.
I do not know, and actually I do not care, about the doctrinal differences that underpin so much of this unpleasant activity. I care about this country’s tradition of religious tolerance, which we were rightly reminded earlier is still evolving and is not perfect. Nevertheless, we can take some pride in it. That tradition must embrace and protect the Ahmadi community, as it has protected other religious groups before. It is a tradition of religious tolerance that we urge Governments around the world to adopt and that our own Government should encourage at all times. I am sure the Minister will touch on that.
In the UK, I welcome the measures already taken by the borough commander of Wandsworth police to investigate what is happening in my local community. That investigation was urged by my hon. Friend the Member for Putney and others, and is supported by Wandsworth council, as well as many councillors and community leaders. There is more that can and should be done by all Members of Parliament to give leadership to attempts to combat rising intolerance. I will certainly be playing my part, and I am glad that this debate has offered us all the opportunity to draw attention to this very grave matter.
Nic Dakin (Scunthorpe) (Lab)
I will contribute briefly to the debate, because most of the points have already been very well made by other hon. Members. I represent Scunthorpe county constituency. Picking up the point that my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) made in initiating the debate, prejudice is unfortunately something that we must live and work with in all our communities and get the better of through tolerance.
A few years ago, an Ahmadi community came to Scunthorpe and applied for planning permission for a mosque. That drew huge objections from the local community. However, the planning application was perfectly correct and went through. The mosque was built and those who lived in the community got on with their lives. A few months after the mosque had been established and opened, the neighbour who had led the series of objections knocked on the door of the mosque. They said to the person who answered the door, “I just wanted to apologise for having led that process of objection because you have been fantastic neighbours. You contribute to the community and we are proud to have you as our neighbour.”
That little story demonstrates the way in which prejudice is often overcome by people living together and becoming more knowledgeable about each other. The sadness of the situation in Pakistan is that that does not appear to be the case. I agree with the comments already made: whatever the British Government can do in working with the Pakistani authorities to try to address the concerns about intolerance and violence towards the Ahmadi community in Pakistan would be very welcome. We must be ever-vigilant in this country to ensure that our tradition of religious tolerance is protected and celebrated. We must also ensure that the incidents that we have sadly heard about this afternoon and that have been reported more recently in the press do not increase. We must ensure that such incidents lessen, so that there is an increased growth in tolerance. Thank you for letting me contribute to the debate, Mrs Brooke.
Annette Brooke (in the Chair)
Would any other hon. Member like to make a contribution? If not, I call John Spellar.
Mr John Spellar (Warley) (Lab)
It is a pleasure to address Westminster Hall for the first time from the Front Bench as a deputy member of the Labour party’s Foreign and Commonwealth Office team. It is also a pleasure to face the Minister, who strikes the right balance between being properly partisan—I heard him shouting and bawling from the Back Benches when he was in opposition—and always being seen as competent and, even more significantly, fair-minded. Perhaps I can compromise him further with his Whips Office by saying that there is a compromising picture of him and me opening Paula Radcliffe way in his constituency. I can assure him, however, that normal service will resume in later exchanges on the Floor of the House.
It is also a pleasure to respond to my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), who once again showed her qualities as a tenacious campaigner. She has turned a marginal seat, which was previously not held by the Labour party, into a safe seat, and that is based on the enormous service that she has given her constituents. She has demonstrated again today her engagement with them and the battles that she has fought on their behalf.
My hon. Friend has not only raised an important issue, but paid proper tribute to members of the Ahmadi faith, their contribution to community life in her constituency and their success in founding businesses and being part of economic life in her constituency and the country. My hon. Friend is right to be proud of that success, but as I often tell groups and individuals in my constituency, we can also be proud of the fact that we live in a country where such success is possible. There are a whole number of reasons for that, and we must fight to defend our values and customs so that such things remain possible and groups can succeed.
People of different faiths, beliefs and races can live peacefully side by side in this country. I was very much taken by the contribution of my hon. Friend the Member for Scunthorpe (Nic Dakin), who spoke of a group that had led a campaign against a mosque. Its members recognised that they had been wrong, but more importantly, they felt that it was right to convey that to the Ahmadi community. I am not sure how many other countries that would happen in. It is particularly telling that even those who have sometimes had prejudices and strong views can recognise when they have made a mistake. That is not true of everyone by any means, and there will always be a minority in society who are bigoted and driven by hatred, but the great majority of people in all communities want to live peacefully. We must work to ensure that we maintain such values and maintain that sort of country. At the same time, it strongly behoves us as individuals, political parties and state authorities to react vigorously against those, from whichever community, who would disrupt society and seek to divide it.
My hon. Friend the Member for Hayes and Harlington (John McDonnell) rightly said that there are two aspects to the debate. One clearly involves the situation and relations in this country, and I will return to that in a minute. The other is the situation in Pakistan. There is also the issue of how we handle the relationship between the two.
Obviously, it was disturbing to hear the contributions from my hon. Friend the Member for Mitcham and Morden and other colleagues, who told us how certain groups are trying to disrupt peaceful relations, stir up hatred, damage people’s businesses and even move towards physical violence. From the examples that we have been given, that seems to be a problem mainly in the Metropolitan police area, and I certainly hope that the Metropolitan police will take it up fairly urgently. As my hon. Friend the Member for Hayes and Harlington said, it is important to nip these things in the bud—to deal with things at an early stage, to establish norms and isolate those who are trying to cause the difficulty.
I remind the hon. Member for Carshalton and Wallington (Tom Brake) that, leaving aside newer legislation, the concept of actions liable to cause a breach of the peace is long established in legal principle. In that respect, the proprietors of a shopping centre, who may have rights within it, can work in collaboration with the Metropolitan police and/or the local council’s antisocial behaviour unit. There is an excellent case for joint action to send the message, “This is not the sort of behaviour that we will tolerate in the public space in our borough or in London.” We should have a strong attitude of zero tolerance towards those who would seek to stir up sectarian strife.
The second aspect that has been raised is the situation in Pakistan. I associate my party’s Front-Bench team with the comments that the Minister has made in answer to questions over the past few months, and specifically in response to the horrific attacks on 28 May and 3 September. They were very much echoed in comments made by the previous Foreign Secretary, my right hon. Friend the Member for South Shields (David Miliband), when he was shadow Foreign Secretary. In a quote that has been previously raised, he rightly said:
“Pakistan’s security is paramount to stability in the region. It is when the international community has taken its eye off the ball in Pakistan that instability has increased.
The European Union needs to increase its support for Pakistan. It currently spends just half a euro per person compared to five to ten times as much in other parts of the world that are not only more developed, but less crucial to global security.
The Pakistani Government’s efforts to stabilise its western provinces has seen its military stretched.
That Friday’s attacks on the Ahmadi mosques originated in North Waziristan, and were carried out by suspected Pakistani Taliban militants, are areas of particular ongoing concern.
Internally, Pakistan has a duty to protect minority groups and needs the support of its allies to do so. This is the worst attack on the Ahmadis in Pakistan’s history, and it is deeply saddening that 93 innocent people have lost their lives.”
That clearly reflected the previous Government’s ongoing policy in March 2009, when the previous Member for Harlow, who was a Foreign and Commonwealth Office Minister, clearly laid out the then Government’s position, which the subsequent coalition Government have followed very well. He said that his ministerial colleague had raised
“concerns about the difficulties faced by religious minorities in Pakistan, including the Christian and Ahmadi communities and the mis-use of blasphemy legislation…With EU partners we have also made a series of demarches”—
he was referring to contacts and notes—
“to the government of Pakistan on protecting religious minorities.”
He said that the UK had pressed
“the government of Pakistan to promote tolerance, and take measures to protect freedom of religion or belief”
and
“called for the reform of discriminatory legislation”,
which has been mentioned in the debate. He said that the UK had
“urged the Minister for Minority Affairs to raise awareness about abuses against minorities and to increase their political representation at all levels.”
He added that in July 2008—this was not just a response to immediate events, but part of an understanding of the ongoing problems—the UK and its EU partners had called
“on the government of Pakistan to specifically protect religious freedoms and human rights of the Ahmadis.”—[Official Report, 24 March 2009; Vol. 490, c. 192W.]
I want to press the Minister a little with regard to the specific event, and the occasion in May when he described the attack on the mosques in Lahore as
“a tragic example of the discrimination faced by the Ahmadiyya community”
and added:
“Our high commissioner in Islamabad has raised the attacks and the discrimination suffered by the Ahmadiyya community in Pakistan with the Chief Minister of Punjab along with his EU colleagues, and the issue has also been raised by our high commission with the Pakistani Ministries of Interior and Minorities.”—[Official Report, 14 June 2010; Vol. 511, c. 301W.]
It is not just a matter of getting agreement at national level in Pakistan; it is also a matter of recognising the significant role of provincial and local governments in protecting minorities in Pakistan. Therefore, national agreement and understanding is important, but things must go deeper, through the structures of the Pakistan Government.
John McDonnell
The most disappointing aspect of the attack this year was the fact that according to the Human Rights Watch report, the Ahmadi community and others in Pakistan had approached the Chief Minister of Punjab in advance to seek enhanced security for Ahmadi mosques. That was not provided and the mosques were vulnerable as a result, with the attack resulting in so many deaths. I concur with my right hon. Friend in trying to ensure that the message should be given not just to the Pakistani Government, but should be implemented at provincial level.
Mr Spellar
My hon. Friend ably reinforces my point. I am sure that the Minister will take that on board. I hope that the steps that have been suggested will be taken, so that the message will get across at different levels in Pakistan.
The debate rightly touches on relations with Pakistan, a country with which we have long and deep links, which is a major player in an important region and a partner in responding to terrorism. Furthermore, as has been obvious during the debate, many of our citizens take a deep and informed interest in its affairs. That is shown by the huge response in the UK—not just from the community that originates in Pakistan—to the floods in Pakistan. As far as I am aware, the UK has been the second biggest donor, both in the response of individuals and in the Government response to the distress caused by the floods. That has been so throughout the country.
I was at an event a few weeks ago in my constituency and there were some major figures there from the Pakistani community—as well as from the other communities: Hindu, Sikh, Christian and probably a considerable number of non-believers in any faith. They made major donations to assist those whose lives have been so disrupted. It is clear that the bonds between our countries are strong, but I stress that is not to do with recreating a position based on a colonial past. Even so, we should not be averse to raising human rights issues. Nor should we make the perhaps slightly lazy assumption that in a vibrant, dynamic country such as Pakistan there is monolithic uniformity of opinion. It is undoubtedly far more nuanced and sophisticated.
It is interesting to note that an independent survey showed that about 90% of Pakistanis believe that religious extremism is the greatest single threat to the country. It seems a shame that, as someone commented, the extremist 3% seem to be holding the other 97% to ransom. It is important, therefore, that Pakistan should not be isolated from the mainstream of international community, and very important that ordinary Pakistanis should remain in contact with the outside world, and should understand that we do not believe they all follow the views of a rabid, vociferous minority.
My hon. Friend the Member for Mitcham and Morden rightly stressed the efforts of the Taliban to destabilise Pakistan by inciting hatred and violence towards minorities, and the Ahmadi minority in particular. However, we should recognise that the Taliban are not very concerned, either, about their fellow Sunni Muslims. In fact, they probably hold them in greater disregard than they do other groups. They are an extremist group and are prepared to use extreme violence to impose a backward view. They are a threat to the stability of the country as well as to minorities, with the present case being the worst example of that at the moment. We should remember in this and other contexts that intolerance of others’ beliefs and sectarian violence rarely stay within the bounds of a country; they spread across frontiers. That is what is happening and that is why we need to respond in Britain.
The Minister has a number of questions to respond to from hon. Members who have taken part in the debate, but I ask him also to outline what steps are being taken by the Foreign and Commonwealth Office to convey our strong concern to the authorities in Pakistan at national, provincial and local level. I assure him of our support in getting that message across.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Alistair Burt)
It is a pleasure to serve under your chairmanship, Mrs Brooke. I thank you for presiding over the debate, and I thank colleagues who have taken part. I begin, of course, by thanking the hon. Member for Mitcham and Morden (Siobhain McDonagh) for her contribution and for raising this important subject. As the right hon. Member for Warley (Mr Spellar) said, her commitment to her community—both the section of it to which the debate relates, and all others—is noted in the House, and brings her recognition wherever she goes. It is another part of her work that she does commendably in the House, and we thank her for bringing it to the House’s attention.
I am grateful to the right hon. Member for Warley for his kind remarks. We do indeed go way back. We are both members of the Whips’ brotherhood, albeit on opposing sides of the House. We have both been around for a while. I appreciated the right hon. Gentleman’s work in Government. He was a good Minister and easy to talk to. Coming to open a road in my constituency of course marks him out as a special colleague, and I thank him for that. If I remember rightly, I think that I ran the 10 km race on that occasion—
Alistair Burt
I was going to say that ministerial engagements prevented him from running; but it was a good occasion and I thank the right hon. Gentleman for his comments, which I reciprocate. Although properly partisan we are able, we hope, to put such things to one side when we need to. This is one of those occasions.
In foreign policy there are many areas in which a change in Government makes little difference to what are conceived to be British interests. As to human rights and related matters I think the House can be assured that the view of the House, the Government and the country is reflected in Government. There may be nuances from time to time, but the things that we hold valuable are shared between us. The House will find the Minister and the Opposition speaking together in our condemnation of the attacks that are the subject of the debate and in our concerns about what can be done in the future.
Human rights and the treatment of minorities are obviously of major concern to the hon. Member for Mitcham and Morden in seeking the debate, and they are important to us all. She made a powerful and at times distressing case when she discussed circumstances affecting her constituents, and events in Pakistan. Her concerns for her constituents were echoed by the hon. Members for Hayes and Harlington (John McDonnell) and for Scunthorpe (Nic Dakin) and by other hon. Members who spoke.
The United Kingdom Government are concerned about the ongoing discrimination against the Ahmadi Muslim community in Pakistan and around the world. I am grateful for the opportunity to talk to hon. Members about it. We welcome the news about the all-party group and will keep in touch with that. The hon. Lady and her fellow officers will know that they need only make contact with us and we shall respond. She recognises, through the establishment of the group, the importance of the community to many hon. Members in the House of Commons who have relevant constituency interests. I will certainly draw the Home Secretary’s attention to the remarks have been made today concerning events that take place in the UK. I will move on to the matters affecting home affairs later, but there is no doubt that the matter has resonance both for our foreign relations responsibilities and for what happens in the UK.
I would like to put our relationship with Pakistan in perspective before dealing with the hon. Lady’s specific points, because it is important, and the right hon. Member for Warley referred to that, too. The Government are committed to a long-term, productive and friendly partnership with Pakistan. Our two countries share many strong ties: our history, the deep familial roots in our 1 million-strong British Pakistani diaspora, extensive business links and close cultural connections.
As we have heard, Pakistan is currently dealing with major domestic challenges. The recent devastating floods have caused an immense amount of damage and misery for more than 20 million people—misery on a scale that is difficult to contemplate in the UK, as the area affected is the size of our country. It is one of the worst disasters the world has ever seen. The UK has been at the forefront of the international response to the crisis, committing £134 million for urgent humanitarian relief and to help people rebuild their lives.
Siobhain McDonagh
Several Members have mentioned the amount of money that the British population have contributed to the relief effort in Pakistan, but we should also put on the record the work of the Ahmadis’ own charity, Humanity First, in raising funds and providing services in Pakistan during the floods.
Alistair Burt
The hon. Lady anticipated my next point, which is about the voluntary contributions, but I would not have mentioned that charity specifically, so I thank her for mentioning it. In addition to what the Government have spent, as the right hon. Member for Warley has said, the response from the community across the UK generally, whether or not they have relationships with Pakistan, has been remarkable— £60 million from different communities up and down the country—and those with family connections have been especially involved. We will continue to do that work. The right hon. Gentleman mentioned the European Union, and it is important that we work closely with it. Recently, my right hon. Friends the Foreign Secretary and the Prime Minister attended a European summit at which they took the lead in pressing the European Community to do still more to improve trade agreements to enable the Pakistani Government not only to get over the immediate hurdle of the floods, but to look forward to re-establishing their economy and to have the right infrastructure to be able to do so. The EU was able to take our lead and produce more trade concessions, which will give significant assistance to Pakistan in the future.
Pakistan is also suffering from the scourge of terrorism. More than 3,000 Pakistanis died last year as a result of terrorist attacks. Those attacks and the groups that perpetrate them pose a grave threat to Pakistan and to the stability of the region and beyond, including the UK. I would like to repeat the words of the Prime Minister when he paid tribute in August to the resilience of the people in Pakistan in facing that threat. We are committed to working with Pakistan to defeat this threat. It threatens both our countries.
Human rights are at the core of our foreign policy. We raise our concerns about human rights wherever and whenever they occur, without compromise and will continue to do so. As the Foreign Secretary made clear in a recent speech, we will improve and strengthen the work of the Foreign and Commonwealth Office on human rights. That will be underpinned by British values and by our support for democratic freedoms, universal human rights and the rule of law. That approach will be based on realism; we will never overlook human rights abuses and will always strive for progress, but we will be practical in our approach and flexible about what might work best in different contexts, which is only sensible.
The multiplicity of links between the UK and Pakistan means that we engage with each other on all subjects—counter-terrorism, security policy, immigration, trade, development, education, the rule of law and human rights. As I have outlined, that last subject is critical to the conduct of UK foreign policy. It is as relevant to our relationship with Pakistan as it is to our relations with the rest of the world. We do not shirk from our responsibilities in highlighting our concerns about human rights, including to our friends.
Pakistan has made important progress in improving human rights. The ratification of the international covenant on civil and political rights and the convention against torture and other cruel, inhuman or degrading treatment and punishment is an important step in enshrining inherent rights in law, although we hope that the Government will look to remove or redraft the current reservations that they have lodged against both treaties. It is important that those instruments are fully implemented to help to ensure the human rights of all Pakistanis.
However, Pakistan continues to face significant challenges in those areas, and we remain committed to working with the Government of Pakistan to address them. One of the most important challenges is discrimination against, and persecution of, those of a particular religious belief, whether Christians or Sikhs, as is sectarian violence between Sunni and Shi’a Muslims. It is vital that the Government of Pakistan uphold the fundamental rights of all Pakistani citizens, regardless of their faith or belief. Pakistan can only benefit if all its citizens are able to play a central role in society. We regularly reinforce that point for our colleagues in the Government of Pakistan at all levels, and they have now established a Ministry for Minorities, which has active leadership and has brought about some positive changes. A remaining critical challenge, as has been mentioned today, is the reform of Pakistan’s blasphemy legislation to ensure that it is properly implemented. Misuse of those laws is the basis for much of the discrimination suffered by religious groups in Pakistan, as the hon. Lady made clear.
Alistair Burt
The short answer is yes, and I know that because the point has come up before. If I may, I will deal with that towards the end of my remarks.
The Ahmadiyya community in Pakistan is 4 million strong. Following the creation of Pakistan in 1947, the community played an important role in the development of the new country; Pakistan’s first Foreign Minister was an Ahmadi, and many prominent members of both the army and the civil service followed their faith. However, since the mid-1950s Ahmadis have faced increasing levels of discrimination, culminating in the passage of constitutional restrictions on their way of life: in 1974 the Pakistan Parliament adopted a law declaring Ahmadis to be non-Muslims, and in 1984 a further ordinance was passed, forbidding Ahmadis to refer to themselves as Muslims or to “pose as Muslims.” Pakistanis themselves must take the lead in legal reform of the constitutional and legislative constraints on Ahmadis. The Government of Pakistan have a responsibility to protect all their citizens, regardless of religion or belief. The structural nature of that discrimination helps to create an environment of intolerance that manifests itself in horrific attacks.
I turn now to the attack on Lahore that was the subject of many of the remarks made by the hon. Member for Mitcham and Morden. The attacks against the two Ahmadiyya mosques in Lahore on 28 May, which killed 93 people and injured more than 100, prompted a worldwide response and rightly generated widespread indignation in the UK, both from parliamentarians and the general public. The attacks, unfortunately, were among many that violent extremists have carried out against both minority and majority Muslims over the past few years.
The Foreign Secretary, as has been acknowledged this afternoon, was swift in his denunciation of the attacks. Shortly after, the British high commissioner in Islamabad raised both the attacks and the wider discrimination against the Ahmadiyya with the chief Minister of Punjab, Shahbaz Sharif. I echo the point, made by the right hon. Member for Warley, that it is important that we engage at both federal and provincial level, which we do, in order to make our points on human rights. It is essential that the message gets though everywhere.
Senior officials from the British high commission in Islamabad had regular contact with officials from the Ministry for Minorities on the matter long before the attacks took place, and continue to do so. What more, then, can we do to help end the difficulties faced by Ahmadis in Pakistan and elsewhere? Most importantly, we must engage robustly and regularly with the Government of Pakistan, and we do. Following the attacks, I met with members of the Ahmadiyya community from the UK. I had the honour of meeting the national president, Rafiq Hayat, and members of the community in my office, and I am grateful for his insights on the issue at the time. He was able to give me at first instance evidence of discrimination and attacks on the community. As a result of that, in answer to a question from the hon. Member for Carshalton and Wallington (Tom Brake), I contacted the Home Secretary and briefed her about the matter so that she was able to take it into her calculations and her concerns about extremism in the United Kingdom. I shall ensure that a copy of today’s debate goes to her, with emphasis on the remarks that have been made.
Mary Macleod (Brentford and Isleworth) (Con)
Would my hon. Friend agree that MPs are best placed to show leadership on this issue in our local communities, and to speak out against any persecution of Ahmadis?
Alistair Burt
My hon. Friend is absolutely right. On such issues, it is clear that those of us in leadership positions have a responsibility to speak out. She put that clearly.
Indeed, I thought my hon. Friend the Member for Battersea (Jane Ellison) also got it right when she said that, for most of us, differences in doctrine between those of different faiths, including majority faiths, are never a justification for violence or discrimination. We all have different views on many things. None of us should be able to use those differences of view as an excuse, for that is what it is, to discriminate or commit violence against others—or, if not physical violence, to use the language of abuse which all too quickly can be turned against a group of people. We have seen that in our own society and community and, sadly, worldwide.
As my hon. Friend said, we do not really care about those differences. What we care about are tolerance and the principles of respect for different views, protection under the law and freedom from fear. Those are the things that matter to people in the UK, and within that we allow people to hold their different views. If those principles are transgressed, we are all violated to some degree, and that is why we will continue to speak out so clearly.
I shall draw to the attention of my right hon. Friend the Home Secretary the matters raised here that affect the UK, because they indicate a degree of fear and concern in the Ahmadiyya community that must be recognised and discussed in those places where that community might be under threat. This debate has done a valuable job in bringing forward the issues affecting people in this country as well as abroad.
I conclude by going back to the Pakistan side of things and saying a little more about the matters raised by the right hon. Member for Warley. Together with our EU colleagues, we have a regular human rights dialogue with the Government of Pakistan in which the continuing mistreatment of religious groups features strongly. I have been disturbed to hear about reports from the leadership of the Ahmadiyya community of discrimination which continues to be suffered both here and abroad, and we mention them when speaking to those we deal with from Pakistan. They are aware of the knock-on effects in the UK of comments and discrimination in Pakistan.
I speak regularly to Shahbaz Bhatti, Pakistan’s Federal Minister for Minorities—most recently, just last week. The work that he is doing to reform the blasphemy laws is incredibly important, and we support him wholeheartedly in it, but I do not think that any of us have any false expectations. We recognise just how difficult it is to deal with such laws in a culture that has been turned against minorities and against the Ahmadiyya community. Despite the strenuous efforts of many in that Government to say and do the right things, it is hard to get such things through.
Trying to change the blasphemy laws provides perhaps the best opportunity for a change in attitude. I have raised the treatment of Ahmadis in Pakistan with the Pakistani Minister and, through him, have been monitoring the progress of the case against those accused of the Lahore bombings. The Government of Pakistan must ensure that the investigation and legal process are open, transparent and credible.
I spoke to the high commissioner for Pakistan at lunch time, to inform him of this debate and to get an assurance from him that he takes these matters extremely seriously. He wanted to communicate to me just how seriously his Government take these issues and this case, and I put that before the House.
I commend the recent report by the all-party group on human rights on their recent investigation into the treatment of Ahmadis in Pakistan, and I note its recommendations. The members of that group will be pleased to learn that the British high commission in Islamabad has been funding a project to increase the capacity of law enforcement officials, Government representatives and civil society to implement and monitor proper procedure in blasphemy cases. That is a way in which we can use the Foreign Office budget directly and practically to build capacity, and to assist those who would like to see change to achieve it.
The hon. Member for Carshalton and Wallington discussed media reports that aid for the victims of the flooding in Pakistan is being denied to some religious groups. That is very disturbing. The UK is committed to ensuring that the aid that we provide reaches those who need it most. Access to aid should not be predicated on religious or political belief, which is a principle to which all humanitarian organisations and non-governmental organisations delivering UK aid subscribe. The Department for International Development closely monitors how our aid is distributed and undertakes strict checks on the organisations that we fund, to ensure that our aid is spent properly and delivers the intended results. I welcome the commitment by the Government of Pakistan to ensure the equitable distribution of aid to those in need, and look forward to their adhering to that principle.
Discrimination against or marginalisation of any group because of their religion or belief is not acceptable. The UK is consistent in condemning all such instances when they occur, and I know that hon. colleagues on both sides of the House support that. The Government are aware of and critical of the discrimination faced by the Ahmadiyya in Pakistan. We are committed to working with the Ahmadiyya community, NGOs and the Government of Pakistan on the issue in a spirit of openness and understanding. Accordingly, I thank the hon. Member for Mitcham and Morden for bringing the matter to the House, and assure her that she will have our support in taking it forward in the future.
Mutual and Co-operative Rail Franchise Bids
(13 years, 6 months ago)
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Gavin Shuker (Luton South) (Lab/Co-op)
It is a pleasure to undertake this debate today. I thank the Minister of State for the communication that I have had with her office in the past few days. We are talking about an important subject. We all like to grumble about the railways. Hon. Members are not exempt from that; indeed, I could tell the story of my last disrupted journey, which was this morning. However, the very difficult privatisation of the early 1990s, brought about by the Minister’s predecessors, sought to privatise a network in 40 weeks. That meant severe growing pains and a sharp learning curve. Other countries are travelling down that path over several decades, which is perhaps a salutary lesson to the present Government about the path and speed of change. However, we all accept that a new order is emerging, and it is right to accept that aspects of the industry today are the envy of Europe.
In the past 10 years, the combined measure of reliability and punctuality has risen from 78 to 91.5% and satisfaction has risen from 72 to 83%, with more passenger journeys now undertaken than at any point since the second world war. Yet, as we come into the constrained spending context of the comprehensive spending review, as the Department closes its consultation on rail franchising, and as customer expectation will rise in light of the massive fair increases of RPI plus 3 proposed by the coalition Government, a re-examination of provision on the UK’s passenger railways must surely be prioritised.
So, how do we improve rail? It is my assertion today that co-operative and mutual ventures across the industry can raise the bar. They can model accountability and effective public engagement, and improve services. When looking at franchising, which is the bedrock of the passenger network, it is necessary to set it within the context of the industry, which means briefly discussing the infrastructure manager—Network Rail.
Network Rail’s board structure, with about 100 members, is perceived as clunky and ineffectual in providing effective control. In 2004, the then Transport Committee stated:
“Network Rail did not convince us that members of the company were exercising an effective control of the company”.
In July 2008, the Committee returned to the theme of Network Rail, and found its governance “inadequate”. Network Rail provides a vital public service and was created as a public interest company, limited by Government guarantee, but genuine accountability, which is essential for driving up standards across the railways, is vital and should be expected in return for the large sums of money that the body receives from the taxpayer.
The Co-operative party has been key in developing a mutual model for Network Rail through “The People’s Rail” campaign, and as a Co-operative MP I welcome that contribution. The campaign contests the assertion that true accountability could be ensured by our all having the right to become individual members of Network Rail. As a genuine mutual venture, Network Rail could be structured in such a way that we all had a voice. A democratically elected members’ council with power over the appointment and pay of Network Rail’s board could drive up performance and accountability and, dare I say it, tackle a culture of excessive bonuses.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I apologise to my hon. Friend for missing the very first part of his contribution. Is there not a similarity between what he proposes for Network Rail and the model that the coalition Government have endorsed as the way forward for something that was introduced by us—foundation hospitals? Exactly that type of structure has been designed to help to hold to account the senior management of our hospitals.
Gavin Shuker
I thank my hon. Friend for his intervention, with which I completely agree, and I associate myself with his comments. What we have seen from the coalition Government is a desire to look at innovative models across public services, and I believe that railways should not be exempt.
As I was saying, a democratically elected members’ council with the power of appointment and pay over Network Rail’s board could drive up performance. Co-operative and mutual structures deliver organisations that act in our interests. Who would be a better boss of the rail network than the passengers and the British public themselves?
Moving on to the bulk of my remarks on rail franchising, in a reply to a question from my right hon. Friend the Member for Tooting (Sadiq Khan) in the House on 22 July, the Minister said:
“There would be no barriers to mutuals and co-operatives bidding for franchises if they fulfilled the criteria.”—[Official Report, 22 July 2010; Vol. 514, c. 541.]
However, it is clear that there are still some barriers to entry, despite the stated desire of the coalition to explore innovative models of public service delivery. We in the Co-operative party would like to see those models given all the opportunities that are before them.
The system as it stands does not make allowance for the arrival of mutual and co-operative ventures. First, bidders are required to pass a number of detailed financial tests during the bidding process. ASLEF has said that a mutual bid would not be able to meet the performance bond requirement, and has called on the Department for Transport to review the performance bond criteria. Surely that is an area for examination. Secondly, bidders are understandably required to show experience of operating transportation systems. Can the Minister provide an assurance that the interpretation of that requirement is wide enough to ensure that mutual models in which individual members have extensive experience of running transport services—even the ones that they currently work on—but in which there is a new team coming together, perhaps under a new brand, are able to bid on a level playing field? Thirdly, the fact that no franchise has yet been awarded to a mutual ownership model on the railways itself serves as a barrier to entry.
To bring about the innovation that could drive up levels of service and accountability across the industry, will the Minister carefully consider the arguments for awarding the first mutual franchise during her time as Minister? Perhaps she could start by meeting representatives of ASLEF. The union has been preparing a mutual bid to run the east coast main line rail franchise when invitations to tender are announced in 2011. It believes that the co-operative principles of sustainability and accountability should be brought front and centre in the provision of passenger rail in the UK.
A common perception is that co-operatives are small and therefore unable to step up to the financial requirements of such a large franchise. However, the Co-operative Group has a turnover of more than £10 billion, and the east coast franchise turnover is only £550 million. The Go! Co-operative is one of the most recently established train operating companies, and down the track, as it were, it seeks to run open-access train services. That co-operative has already been authorised by the Financial Services Authority to raise the required funds, and I am sure that the Minister will want to welcome that initiative. I encourage her to take the time to talk to representatives of Go! Co-operative and to understand, in real time, both the challenges and the opportunities that are presented to people who enter the franchise system.
Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)
Does my hon. Friend agree that the strength of mutuals is that they can represent the interests both of those working in the organisation and those who use its services?
Gavin Shuker
Absolutely. I thank my hon. Friend for that intervention, and I would like to associate myself with her comments. It is true that when different stakeholders, including the people who work on the railways, are brought together, that always results in a much better service. Rail franchising is a key aspect of mutuals’ activity on the railways, but there are other ventures, too, to consider.
Enterprises that are owned and controlled by those who have a vested interest in their success should not be confined to the running of the railway itself. Many services that work alongside the main business add value to the traveller experience. Services such as cleaning, catering, customer service and training would be greatly improved by local accountability that allowed the services to respond flexibly to changing needs. The Cleaning Co-op based in Bristol has already won contracts to work with Birse Rail, CrossCountry and Virgin Trains. It provides cleaning services to Oxford and Bristol universities, local schools and the NHS. As a result of its unique structure, it not only provides a highly professional service but has a high staff retention rate and a motivated work force. It is highly valued by its clients, who are also its partners. The Cleaning Co-op is one example, but there are many successful retail, catering and training co-operatives, all of which could add to the traveller experience in a mutualisation of rail franchising.
Mutualism has much to offer in the governance of Network Rail, the system of rail franchising and the services that enable a decent passenger experience. I hope that the Minister will speak about the positive contribution of these talented, professional and visionary co-operatives. As we all recognise, UK rail faces significant challenges in the years to come. There is a requirement to show that passengers are getting a fair deal. There is a desire to see profits reinvested in better services. What better way to reassure passengers that the railways have their interests are at heart and that the staff who serve them truly have a seat at the table, than to see mutual operators on our railways?
The Minister of State, Department for Transport (Mrs Theresa Villiers)
It is a pleasure to serve under your chairmanship today, Mrs Brooke.
I congratulate the hon. Member for Luton South (Gavin Shuker) on securing the debate and providing us with the opportunity to discuss an important issue, namely the potential involvement of mutuals and co-operatives in the rail franchising process. The issue is of concern to a number of hon. Members and has been the subject of a range of parliamentary questions.
I would like to make it clear that the coalition Government support the creation and expansion of mutuals, co-operatives, charities and social enterprise. We fully appreciate and recognise the brilliant work done by the co-operative, mutual and not-for-profit sector in many areas of policy and public life. In fact, we want to see such groups playing a bigger role in delivering public services and in helping us to tackle the key social problems that we face in modern Britain.
I want to be clear: the Government would treat a rail franchise bid from a mutual or a co-operative in exactly the same way as they would treat a bid from a competitor in the commercial sector. If a mutual, co-op or any other not-for-profit organisation can meet the accreditation criteria, it may bid for a franchise. If it offers the best deal for the passenger and the taxpayer, it can win the franchise. I cannot promise to bend the rules for mutuals and co-operatives, but I can promise to treat them fairly and objectively, judging their proposals on the same basis as those of their commercial competitors.
Before I deal with how the accreditation and procurement process works, I will respond briefly to the points made by the hon. Member for Luton South on Network Rail—not obviously the subject of today’s debate, but important none the less. I hope, Mrs Brooke, that you will allow me the latitude to respond.
The hon. Gentleman is right that we need to reform Network Rail. I am glad that there is growing consensus around that—before the previous general election, the Government seemed to think that there was no justification for reform, so I welcome his voice joining those of us who think that we need mechanisms to make Network Rail more accountable. He is right that we need to take care to get any reform right—we want not to rush into it, but to think carefully about the best way to deliver results for passengers and taxpayers.
I recognise and, to an extent, share the hon. Gentleman’s concerns about the Network Rail decisions on bonuses in recent months. I am pleased that the company has suspended its management incentive plan, which I hope we see reformed in the future. We are determined to make Network Rail more accountable and more efficient. Our work is informed by that of Sir Roy McNulty, and I have no doubt that our discussion today and the speech by the hon. Member for Luton South will also form an interesting part of the McNulty review.
In order to address the issues raised by the hon. Gentleman about mutuals, one first needs to consider the general rules on rail franchising. As the hon. Gentleman acknowledged, rail franchises deliver an essential service. There are 1.2 billion passenger journeys made every year. The train operating companies are, at the moment, substantial businesses—they each have a turnover in excess of £100 million per annum and they provide employment to hundreds and, in some cases, thousands of people.
The Government have a twofold interest in rail franchises. First, we need to protect the passengers’ interests and to hold train operators to the demanding obligations of service delivery placed on them by their franchise contracts. Secondly, we need to protect taxpayers’ interests, by obtaining value for money from the franchise contracts and for the considerable sums spent on the railways.
The hon. Gentleman will appreciate that, while some franchises pay a premium and others receive a direct subsidy, all operators benefit from the Government grant made to Network Rail to maintain and renew the infrastructure. He will appreciate that considerable sums are at stake when a franchise is let and that, in letting a franchise, we trust the operator with serious and important responsibilities in relation to our economy and transport system. Therefore, the greatest care is needed to ensure that we do the best that we can to make the right decisions on whom we award a franchise to.
A key issue for the hon. Gentleman was clearly the accreditation process used to assess whether a bidder can qualify to take part in a franchise competition. The Department for Transport has recently completed a consultation on rail franchising—it closed on Monday—and I take the opportunity to thank all those who took part. Until the consultation responses have been properly considered, I cannot say with certainty whether the reforms that we will undertake will involve changes to the accreditation process. Although this is not the primary focus of the consultation, we are happy to consider whether ways can be found to make the process of letting franchises less complex and expensive to carry out. Whatever reform we adopt, however, it must still ensure that the process is fully compatible with objective public procurement principles and regulations. I am sure that the debate will provide useful input for the decisions on whether reform to the accreditation process is needed, to be considered alongside the consultation responses.
The procurement process has two main elements: first, accreditation; and, secondly, the formal bid stage. The appropriateness of potential bidders is considered at the first stage. The accreditation process is designed to achieve a manageable field of bidders, which can be expected to submit attractive, competitive and realistic proposals. Keeping the number of operators that can proceed to the formal bid stage to a manageable number reduces cost for Government and industry. The winning bidder must be capable of delivering a high-quality service at the price it has undertaken to pay. The procurement methodology needs to comply with European Union procurement law and treaty principles, including equal treatment, proportionality and transparency.
The legal entity signing the franchise agreement is required to be a limited company formed for that purpose, but the accreditation process assesses the financial standing and technical capability of the parent organisation, so it would be open to a mutual or co-operative to establish a special purpose vehicle in order to run a franchise in the same way as commercial parent groups do now. Bidders are assessed to ensure that they have a level of financial standing proportionate to the size of the franchise concerned, in order to provide assurance as to the stability of the potential operator. The Government need to be confident that each bidder will have sufficient financial capacity to meet the working capital needs of the franchise business. We need to assess with great care whether the bidder will be able to absorb the risks that we seek to transfer to it, which at the moment means obtaining the performance bonds that the Department needs as security in the event of a franchise default.
The hon. Gentleman has made a passionate plea on behalf of co-operatives and mutuals. I value their work, but I would be very reluctant to compromise on rules that require us to make a careful assessment of the financial capacity of those that bid for rail franchises, because of the accompanying potential risks. Having said that, we are looking at the whole process of the franchising system as part of our response to the consultation. A key aim of the franchising process must be to protect the interests of passengers and taxpayers, so it is essential that we have safeguards in place to avoid letting the contract to an organisation that, ultimately, finds that it cannot cope. The most recent example of franchise collapse, that of National Express East Coast, shows that it is possible to deal with that situation without disruption to services. However, such collapses are clearly unsettling for passengers and the work force, and leave the taxpayer with the considerable cost of stepping in to run the railways as the operator of last resort.
I hear what the hon. Gentleman says, but financial credibility checks and standards are important, and likely to become even more so in the future as we move to longer franchises, as proposed in our consultation. We will need to make longer-term judgments on the credibility of bids and on the capacity of the potential franchisee to deliver major investment, which we hope will make a considerable difference to the quality of experience for passengers under the proposed new franchise model.
I turn now to the hon. Gentleman’s questions about the experience assessed when looking at franchise bids. The current rules require bidders to demonstrate a track record of operating transport systems, not necessarily in rail. Recent competitions have said that it should cover a period of at least two years. However, a completely new organisation might be able to meet that requirement by showing that its management team and work force have such a record. The issues discussed by the hon. Gentleman could be taken on board in the assessment of whether the potential bidder had the right track record to give us confidence to take their bid seriously.
A new and small organisation may have less experience than other bidders and will, therefore, find it harder to get through this stage, especially if it is interested in one of the larger, more complex franchise opportunities. My officials have an open door policy for people who want to get into the rail franchise market. I am happy to meet the delegation from ASLEF that the hon. Gentleman mentioned. It is useful to put it on the record here that if there are others—whether they are commercial operators, mutuals or not-for-profit organisations—that are interested in bidding for a rail franchise, we are willing to talk to them, and my officials are happy to advise them on how to grapple with what everyone accepts is not an easy process.
The hon. Gentleman advocated waiving or reforming some of the requirements in the case of a bid by a mutual. Removing the financial standing and technical capability factors or compromising them would import some real risk to franchisee financial resilience. That is my anxiety about what he advocates. If we were to waive the experience requirements in relation to a mutual, we would have to make the change for all potential bidders. That would reduce our ability to consider the track record of the major franchise operators that are currently in the market. The EU rules on equal treatment and non-discrimination mean that we have to treat all bidders the same and assess them against the same criteria. Therefore, anything that we do to help a mutual or co-op would also have to be offered to a commercial operator. If we were to relax the requirement on a track record, we would not be able to assess the previous experience and performance of the only groups that currently hold franchises. There would be public anxiety if the track record of train operators could not be considered in the award of new franchises. Moreover, the existing process is a further incentive and addition to the other regulatory mechanisms. We must keep performance levels high. To get through this difficult process, I encourage any mutual or co-operative that is considering bidding to approach my officials to get further advice.
The hon. Gentleman referred to the Go! Co-operative. I am delighted that we have that as an example of a co-operative that has expressed interest in running open access services. I gather that it would like to operate services linking main lines to some smaller market towns. I am told that it has identified a route from Yeovil Junction to Oxford for its first proposed services and that it hopes to commence operation during 2011. That is a welcome initiative. It is not for me to say whether it will get its paths or even get the operation off the ground. None the less, I very much welcome its involvement in the rail industry. There are also examples of small community-based companies running services, such as the Wensleydale railway in North Yorkshire, which has taken on a branch line from Northallerton to Redmire and is running passenger services.
I want to touch briefly on one last area. The voluntary and not-for-profit groups are already successfully engaged with the UK’s railways: I refer to community rail partnerships. The Government are very supportive of such partnerships and the work that they do. They have successfully brought additional passengers to many lines and helped to build up services and make better use of redundant property. For example, the Devon and Cornwall rail partnership works with the train operator in selling tickets at a number of locations. It encourages rail use by making it easier for the public to buy tickets. Partnerships such as South Fylde, Leeds to Morecambe and the Clitheroe line have produced impressive promotional material. Others such as the Bittern line in Norfolk have run successful promotional events. Almost all partnerships see the voluntary sector involved in improving and maintaining station facilities. There are numerous examples of local enthusiasts devoting huge care and attention to station gardens and floral displays. Right across the country, from Penmere in Cornwall to West Runton in Norfolk and Green Road in Cumbria, we see the visual evidence of the value of the work done by the voluntary and not-for-profit sector on our railways.
To conclude, the Government fully recognise and value the contribution made to the rail industry by the community-based and not-for-profit sector. I was interested to hear the hon. Gentleman’s example of co-operative cleaning services. I have no doubt that there are other areas in which mutuals and co-operatives will get involved in rail supply services. Rail franchise procurement processes can present a daunting challenge to any organisation, particularly those that have not operated a similar contract before. That is why my officials offer an open door policy for potential bidders. If a mutual or co-op expresses an interest in running a rail franchise, we will not place extra barriers in their path. They will be subject to the same rules and requirements as commercial operators. If they can meet the accreditation criteria, they can bid for a franchise. If they offer the best deal, they can win a franchise. It is as simple as that.
S4C
(13 years, 6 months ago)
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Guto Bebb (Aberconwy) (Con)
When I requested this debate on the future funding of S4C, I had not anticipated that events would move so quickly. It is fair to say that for many in Wales, the future funding arrangements for S4C have been a very visible and easily understood example of the hard choices that we as a country now face in dealing with the deficit and the debt problems. This coalition must get to grips with those issues and the mess that the previous Labour Government left us with.
No one can deny that S4C has an important place in the cultural landscape of Wales. It is important to be aware that the way in which the channel came into being is a key reason why its future funding arrangements are extremely important for many people in Wales. After all, it is the only Welsh language broadcaster in the world. Let me give a bit of historical context. The channel was launched in 1982 following a long and very public campaign, which was supported by all strands of Welsh society. It is worth noting that the decision to establish S4C was taken by a Conservative Government back in 1980.
Despite all the doubts that were expressed about the viability of a Welsh television channel, it is important to note that initially S4C proved to be a great success. The success of the channel in the early years was very much a reflection of the fact that there was a mix of Welsh programmes during the peak hours and Channel 4 programming that also attracted non-Welsh speakers. There is no doubt that the initial few years of S4C were very successful. There was a period in the 1980s and 1990s in which audience figures were often in excess of 150,000 for peak-time viewing.
Hywel Williams (Arfon) (PC)
On a point of order, Mrs Brooke. May we adjourn the debate for a moment because there is a Division in the main Chamber?
Guto Bebb
As I was saying, Mrs Brooke, S4C’s initial period was successful, but it is important to note that it was more than just a television channel. The establishment of S4C unleashed creativity across Wales that led to the creation of a Welsh independent television sector, which prospered not only in Cardiff but in west Wales and Caernarfon in north Wales. That was undoubtedly a successful period for the channel, and that sustained period of success resulted in changes to S4C’s funding arrangements in 1991 that established a link with the retail prices index. That link has been questioned recently, and has been in the news.
Alun Cairns (Vale of Glamorgan) (Con)
Is my hon. Friend aware that the document that S4C presented to the Department for Culture, Media and Sport on the request for budget savings said that the link with RPI went back to 1982? Is he not surprised that the document contained such a factual inaccuracy? Is it not indicative of the quality of the document submitted to the Department?
Guto Bebb
That might be surprising. The point that I want to make is that I believe that the RPI link has been a double-edged sword for the channel in many ways. In my view, the RPI link was crucial to giving S4C operational independence, because it created a feeling that the broadcaster would be independent of Government intervention. Anybody who believes that a public broadcaster should be free to broadcast whatever it desires would obviously welcome that link and the freedom that it gave S4C to pursue its own requirements. In many ways, therefore, the RPI link was a positive thing.
However, S4C had to pay a price for that link. The problem with a funding arrangement allowing for year-on-year increases was that it created a growing feeling that the channel and its management were becoming divorced from the people whom they served. When S4C’s viewing figures fell, the channel felt that there was no need for S4C to respond, because regardless of whether it was successful and getting the required audience figures—although in many cases it was—it was almost immune to the realities of falling audience share, because year on year its budget would increase.
Although I believe that the RPI link gave S4C a degree of independence from Government, which is crucial, it also created a comfort zone for the channel, so I do not mourn the loss of the RPI link in determining how the channel is funded. However, little did I know when I was putting together my notes that the RPI link would be the least of the issues that we would discuss today.
Owen Smith (Pontypridd) (Lab)
I am enjoying the hon. Gentleman’s history lesson about S4C’s funding, but as he said, we have been overtaken by events today. There are more pressing matters of funding that need to be addressed, and that is what my intervention is about. Is it not true that regarding S4C, today’s announcement was a shambles in terms of detail? A rather more interesting and important problem with the documentation is that two versions of the comprehensive spending review are currently available, one of which includes figures about S4C and how much funding it will receive from DCMS and the licence fee. There is a suggestion that £70 million will come from the licence fee—
Owen Smith
It is a question for the Minister, in that case. Can he tell us what the figures are?
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)
You cannot question me.
Owen Smith
Well, then, it is a question for the hon. Member for Aberconwy (Guto Bebb). Would he like to answer a question about the figures?
Annette Brooke (in the Chair)
Order. I think that this intervention has been long enough.
Albert Owen (Ynys Môn) (Lab)
I congratulate the hon. Gentleman on securing this debate on this important day, although I know that he did not plan it to coincide with the announcement. He said that independence was important and allowed diversity in Welsh media broadcasting. Does he therefore agree that giving ownership to the BBC will diminish S4C’s independence in future? Before the general election, the then shadow Secretary of State, now the Secretary of State, said that plurality was the most important thing. Will the developments harm or increase plurality?
Annette Brooke (in the Chair)
May I point out that interventions should be short? Mr Guto Bebb, you must watch how much time you are leaving for the Minister to respond when accepting interventions.
Hywel Williams
On a point of order, Mrs Brooke. This debate is hugely important for Wales, and for once Welsh MPs have the opportunity to say something of significance at a time when doing so will have some effect. Is there any way it is within your powers to award us double injury time, given that we have had so much disruption?
Kevin Brennan (Cardiff West) (Lab)
Further to that point of order, Mrs Brooke. This is a very important debate because one of Mrs Thatcher’s great reforms was to try to ensure that the Welsh language was not a party political matter and that it was put in a place where we could all agree consensually on the subject. Now that the Government have decided to play fast and loose with the Welsh language in this way, is it not appropriate that we should have a longer period to debate the subject? That would allow all hon. Members who have come along to show an interest in the issue the opportunity to contribute their thoughts.
Annette Brooke (in the Chair)
Order. I am sure that hon. Members who have been in the House for some time are aware of the limitations of the Chair. Of course, any hon. Member here could have applied for an hour and a half Adjournment debate and they could still do so in the future—a course of action I would recommend. Obviously, all the time lost from the Divisions will be added to the end of the debate. I call Mr Guto Bebb.
Guto Bebb
I shall just finish responding to the intervention by the hon. Member for Ynys Môn (Albert Owen). Yes, the plurality and the independence of S4C are important; I will ask a question on that subject at the end of my speech.
The fact that the RPI link has gone means that we are in a much more serious situation. I would like to point out that the issue of the audience figures became very important during the review of funding for S4C. The RPI issue contributed to a lack of regard for the audience figures, but we still need to clarify the fact that some of the S4C audience figures that have been bandied around are not particularly accurate. I have my own concerns about the fact that the Broadcasters’ Audience Research Board viewing panel in Wales is possibly not sufficient to provide a proper audience figure.
Mr Mark Williams (Ceredigion) (LD)
I congratulate the hon. Gentleman on initiating this important and timely debate. On the point about viewing figures, would he acknowledge that one of the great successes of S4C that should be recognised—this is not borne out by the viewing figures—is the work that is being done in relation to young people’s and children’s television? That work is very important to the Welsh-speaking communities that many of us represent, and it is not acknowledged in the figures.
Guto Bebb
The hon. Gentleman jumps ahead of me. That is exactly the point I was going to make. In addition to the question marks we have over the BARB panel in Wales, my family are a very good example of why there are problems with the viewing figures. It is true to say that S4C has made an important decision to invest in the content of children’s television, and I think all hon. Members in the Chamber would welcome that. In my family, seven people live at home; five watch a lot of S4C and two unfortunately do not watch a lot of S4C. The two people who do not watch a lot of S4C are counted in the figures, whereas the five people who do are not included because they are children. My twin boys, who are six years old, would certainly be very annoyed that their viewing habits, which involve Cyw, are not included in the figures. So there are question marks over the S4C audience figures—specifically, the serial viewing figures. In addition, we should not deny that there are serious question marks over the audience figures at peak times.
David T. C. Davies (Monmouth) (Con)
Would my hon. Friend not acknowledge that if the figures are as large as S4C sometimes makes out, it should be raising more than £3 million from advertising, which is roughly just 3% of its total budget—as of today, anyway?
Guto Bebb
That is an interesting contribution. The viewing figures are a cause for concern in many ways. There are good reasons to defend some of them, but we have a situation in which occasionally as few as 19% of programmes manage a figure of more than 10,000 during peak time viewing. That is a real concern. As a result, there has been a serious discussion about whether S4C can justify the funding that it receives. I believe passionately that S4C can justify that funding.
Mr Wayne David (Caerphilly) (Lab)
The hon. Gentleman is being very generous in accepting interventions. Whatever we might think about the viewing figures or the funding formulae that have been used in the past, today’s announcement has been made without any consultation whatsoever with S4C. He surely must agree that that is reprehensible and possibly leaves the matter open for a judicial review.
Guto Bebb
My view is obviously that any decision of this nature should involve a degree of consultation. We need to be aware of the fact that there is a question mark over the matter, when the viewing figures indicate that the contribution of the channel to the Welsh language is not as important as it should be. So, we are where we are and we need to think carefully about the way forward.
Paul Flynn (Newport West) (Lab)
Although the hon. Gentleman’s points are fascinating, we should go back to why S4C was set up. I was very much involved in the matter at the time because I was chairman of the Broadcasting Council for Wales. S4C was set up by Mrs Thatcher as a volte-face. She was reading Irish history at the time, and there was a very strong reason why she decided that S4C should be put in place: it was to avoid linguistic divisions in Wales. S4C was established to provide a full service for both communities in Wales—those who speak English predominantly and those who speak Welsh. We cannot judge the value of S4C purely on the basis of the number of viewers it has; there is a much deeper reason why it exists.
Guto Bebb
I acknowledge that there were deeper reasons for establishing S4C, but we must also recognise that the channel needs to serve the people of Wales, whether they are Welsh speakers, Welsh learners or non-Welsh speakers. There are question marks over whether the viewing figures are disappointing at times and whether the channel is doing what it should be doing. The feeling that the channel has moved away from the people it is supposed to serve is demonstrated, I believe, in the campaign that we have seen during the past few weeks in response to the potential threat to the channel. Even the Welsh Language Society, which no one could doubt is committed to the channel, is arguing for fair funding and a new S4C, because it believes that the current channel is perhaps not performing as it should.
When we talk about S4C, we often mention the wider cultural and economic implications, but it is interesting to note that the channel’s economic contribution has changed considerably over the past 20 years. The way that it once created new industries in parts of west and north-west Wales has certainly changed dramatically, and the loss of the Barcud studios in Caernarfon is an indication of that change and shows that the economic argument needs to be looked at again.
It is crucial that we move on and consider the future challenges that we face. Last night it was announced that the BBC would be taking over the funding of the channel, so there is now a need for clarity on the nature of the proposed settlement. We should acknowledge that the Department for Culture, Media and Sport has accepted the argument for having S4C, which I appreciate. It is likely that the channel’s funding will be transferred to the BBC from 2014, so I would like to ask the Minister a few questions on what we have heard in the media and from the Chancellor this afternoon.
Will the funding for S4C be safeguarded within the BBC, and by what mechanism? It is all very well saying that the money will be forthcoming from the BBC licence payer, but by what mechanism will the S4C budget be protected within that licence fee? We are all aware that during the past four months the BBC has announced a 17% cut in its programming for S4C, with very little consultation, so I would like some clarification on that point. With regard to my earlier point on plurality and editorial independence, if there is a change in the funding mechanism for the channel, it is imperative that there is clarity about editorial and programming independence. I am sure that the Department can respond to that point.
Despite what I have said about S4C’s economic contribution, the channel does play a key role in supporting the cultural industries in Wales, especially independent television producers. If a pot of money from the BBC licence fee is to be made available for S4C, would the Minister clarify whether it will be ring-fenced for the independent producers, rather than swallowed by the BBC? Finally, we need assurances on the future funding for the channel, because if the decision for the BBC to take responsibility for that funding is to go ahead, I would like to know where we will stand not only in 2014, but in 2016 and beyond.
Hywel Williams
Before the hon. Gentleman concludes his remarks, would he tell Members whether he agrees with the scale of the cuts—25%—that have been reported? What is his opinion on that matter?
Guto Bebb
I have made it fairly clear to many constituents that I believe that a cut in S4C’s funding can be justified, as long as it is in keeping with the general cuts that the Department is facing. Having spoken with numerous television companies in Wales, I believe that the feeling is that, with greater efficiency, a cut of around 20% is manageable, but that anything more would be problematic. I hope that the cut will be about 20%, and no more than 25%.
I could ask the Minister many more questions, but I think that he has probably realised from the debate that there is a degree of concern about the transparency of the announcements, which I believe is no fault of the Department—the BBC got hold of the story. However, we need some clarity on the announcement. I have asked several questions, but I should be delighted if he would expand on those and comment on the critical issues that have been raised by other Members. Ultimately, we need to remember that we are all here because we are convinced of the need for a television channel broadcasting in Welsh and feel that, whatever settlement is made as a result of today’s announcements, it should be a long-term settlement, not a short-term response to a current fiscal crisis.
Annette Brooke (in the Chair)
Before calling the Minister, I remind Members that the debate will finish at 5.47 pm.
The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)
It is an honour and a privilege to serve under your chairmanship, Mrs Brooke. I congratulate my hon. Friend the Member for Aberconwy (Guto Bebb) on securing this timely debate, which has allowed Members to consider the future not only of S4C, but of Welsh language programming and its funding levels. I want to put on the record the Government’s support for Welsh language programming and S4C’s continuing role in it.
Jonathan Evans (Cardiff North) (Con)
On that point, I point out to the Minister that S4C’s headquarters are based in my constituency and that I have met its executives to discuss the situation on a number of occasions. I have advised them to engage with him. I have a copy of a statement made by S4C’s chair:
“I am astounded at the contempt that the London government has shown not just towards S4C, but also towards the Welsh people and indeed the language itself.”
Would the Minister like to deal with that statement?
Mr Vaizey
I will use my hon. Friend’s intervention to make it absolutely clear that my hon. Friends have been assiduous in putting the case for S4C, and they have been not a little successful in doing so. If anyone is to be accused of contempt for S4C, it is certainly not Conservative Members in Wales; as my hon. Friend the Member for Aberconwy noted, S4C was established by a Conservative Government. I do not want to make the debate any more heated, so I will not comment on the chair’s specific remarks—my hon. Friend the Member for Cardiff North will have to forgive me, but discretion is the better part of valour. I will point out, however, that we are not a “London Government” but the Government of the United Kingdom, and we have to make decisions with the interests not only of the Welsh people at heart, but of the people of the whole United Kingdom.
Hywel Williams
Would the Minister tell Members when the chairman of S4C and the Welsh Assembly Government’s Minister for Heritage were informed of the Government’s decision?
Paul Flynn
Before the Minister rewrites history, I remind him that the Conservative Government turned down the idea of a fourth channel in 1979. Mrs Thatcher changed her mind under duress because Gwynfor Evans was touring Wales and claimed that he would starve himself to death if there was no fourth channel. She had been reading Irish history at the time and did not want a martyr in Wales, which could have caused all kinds of problems. It was not an act of generosity or good sense on the part of the Conservatives.
Mr Vaizey
We can spend the debate looking backwards or forwards. I want to look forward, as I believe that S4C has a bright future under the Government’s proposals. As so much of our discussions come down to funding, I will make it clear that in the financial year 2011-12, S4C will receive £90 million, which is a substantial sum of money. By 2014-15, the channel will receive a total of £83 million, which is still a substantial sum of money. My hon. Friend the Member for Aberconwy referred to S4C’s £3 million of commercial income, which he felt was a low sum of money. Nevertheless, it is £3 million, and S4C has £27 million in reserve, which is available to spend on its statutory duty. To my mind, that is a substantial sum of money for securing the future of Welsh programming.
Alun Cairns
I congratulate the Minister on the figures that he just announced, because they are a significant pledge of support to S4C. How do they compare with the cuts that the Department and the Government have had to make as a result of the financial position that we inherited? Will all of that money be output-focused and spent on independent production companies? Will the BBC in any way be able to siphon it away under the suggested arrangement?
Mr Vaizey
My hon. Friend makes very important points. Overall, the Department agreed with the Treasury a 24% to 25% cut, so S4C is not being singled out. In fact, in mentioning the BBC, he reminded me that if we take the £90 million, the £3 million of commercial income and the £27 million of reserves, we still have not counted the equivalent of £20 million of free programming that is already available from the BBC for S4C. That is a substantial sum.
Given the important representations made by my hon. Friends over the past few weeks on the future of S4C, and the interest that the people of Wales take in the future of S4C, I know that parts of this debate will play on the news tonight in Wales. People in Wales will be watching this debate, perhaps on BBC Parliament, and I want them to know about the £90 million next year, the equivalent of £20 million in programming from the BBC, £3 million in commercial income and £27 million in reserves. I have enough faith in the people of Wales to believe that they will look at the funding figures for S4C and think that they are generous, so for the Opposition to depict this move as an attempt to undermine S4C is an outrageous travesty of the truth. [Interruption.]
Annette Brooke (in the Chair)
Order. If the Minister is not taking interventions, he is not taking interventions.
Hywel Williams
May I point out that the Chancellor today announced that the funding for the London Olympics of £9.3 billion will be maintained, that there will be capital spending on Tate Modern, the British Museum and the British Library—all in London—and that the Arts Council England and Sport England budgets will be reduced, but only by 15%? Those institutions are of huge cultural significance to the United Kingdom in general and specifically to England, yet a similar institution in Wales, S4C, is being cut by 25%. How can the Minister defend that position?
Mr Vaizey
The hon. Gentleman knows that the 25% cut is the same as the Department’s cut, and he will no doubt be delighted, given how he wants to portray the situation, that culture is a devolved matter for Wales. However, let us also discuss future arrangements. [Interruption.] I want to move on to a new point.
People have talked about a lack of consultation. The BBC will not take over responsibility for S4C until 2013-14. The Welsh Affairs Committee has announced an inquiry into S4C, so there will be plenty of time for people to make representations about the situation. [Interruption.] Let me set out a few markers so that when interventions are made by the Opposition they can be made in a timely and forensic fashion.
First, the editorial independence of S4C will be guaranteed, regardless of the fact that it will be funded by the BBC. In response to my hon. Friend the Member for Vale of Glamorgan (Alun Cairns), absolutely 100% of the content budget will be spent on independent production, as it is at present. That, of course, is the content budget, and S4C obviously has an administration budget as well. The BBC will not be in a position to siphon off money for promotion on BBC channels. It will be for the BBC and S4C, in the two years that they have to put the arrangement in place, to talk through the exact details of how the money will be used.
Ian Lucas (Wrexham) (Lab)
On a point of clarity, will the changes that the Minister is rattling through at the moment require legislation?
Mr Vaizey
As the hon. Gentleman knows, the public bodies Bill will include a clause to break the retail prices index link. I have no doubt that he and his colleagues will be able to get on their feet during its passage and state what the Labour party’s position is. Will Labour Members table an amendment to retain the link with inflation, and to insulate S4C from the difficult financial decisions that many other bodies are planning to take? If not, what is the Labour party’s position? Is it to restore the funding of S4C to 2010-11 levels and take it up to what it might have been in 2014-15? Does it not support the BBC taking responsibility for the funding of S4C, although it remains independent?
Mr Vaizey
The hon. Gentleman calls that sophistry. I call it simple, direct questions. Opposition Members are playing politics when they know full well that S4C has a very generous funding settlement, has substantial reserves, has a place in the heart of the Welsh people, and has huge support from Conservative Members of Parliament in Wales who have lobbied Ministers assiduously on behalf of S4C. If that is sophistry, I would like to know what is not.
Mr Vaizey
We are introducing a public bodies Bill, and under the coalition Government, Parliament has plenty of time to debate Bills in a way that was impossible under the previous Government, who seemed to find the guillotine almost as attractive as Robespierre.
I look forward to hearing Labour Members making their points, and I leave the debate with this reassurance for hon. Members. The Government are committed to Welsh language programming, we are committed to the future of S4C, and we have put in place a generous settlement for S4C. I have been bowled over by the energy and enthusiasm of my Welsh colleagues and their defence of S4C. It will be interesting to hear the Select Committee inquiry under the excellent stewardship of my hon. Friend the Member for Monmouth (David T. C. Davies). We are moving forward with a bright future for S4C.
Question put and agreed to.
Written Ministerial Statements
(13 years, 6 months ago)
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EU Competitiveness Council
(13 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Mr Edward Davey)
The EU Competitiveness Council took place in Luxembourg on 11-12 October 2010. Baroness Wilcox, the Under-Secretary of State for Business, Innovation and Skills represented the UK on internal market issues and Andy Lebrecht, the UK’s Deputy Permanent Representative to the EU represented the UK when a Minister was not in attendance. A summary of the discussions follows.
Single Market Act
The Commission outlined its ambitions for the next steps on the Single Market Act. These would include measures to make the single market work for business and be at the service of citizens. The Commission said their document would be launched on 27 October followed by a three to four month public consultation. The UK stated its main priorities were free trade and ensuring that proposals would bring economic benefits to the EU. It proposed the Commission should identify the top 20 barriers to business and consumers as a way of identifying the success of the Act. This was widely welcomed.
The EU Patent
The presidency and the Commission reaffirmed their commitment to create a business friendly EU patent. The latest compromise on the proposal for a language translation regime was announced by the presidency, but some member states remain opposed. The UK and a majority of member states supported the proposal, but a few member states remain opposed. The presidency reiterated its desire to find a unanimous solution between member states, and announced that the issue would be discussed at an additional Competitiveness Council, now confirmed for 10 November.
Innovation
The Commission presented its recent Innovation Union strategy to industry and research Ministers separately. The strategy was largely welcomed. The UK highlighted the economic potential that could be realised by innovation, welcoming the aim to develop ways to influence more private sector financing. It suggested future R and D framework programmes to support research should have a clear outcome, but felt some initiatives in the Innovation Union could prove sensitive.
Other member states did not welcome a proposal to set up a new Innovation Council. Most preferred innovation work to be taken forward by the Competitiveness Council and were open to it playing an enhanced role in monitoring performance.
There was a discussion by research Ministers over lunch on Commission ideas to set up European innovation partnerships. Ministers felt these should be governed from the “bottom up” rather than driven by political priorities, and have a light touch with close private sector involvement.
The Council agreed conclusions on tourism, simplifying rules governing the EU’s R and D funding programmes, and approved the launch of three joint programmes on agriculture, food security and climate change; cultural heritage; and healthy eating.
Equitable Life Payment Scheme
(13 years, 6 months ago)
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The Financial Secretary to the Treasury (Mr Mark Hoban)
Our programme for government pledged to
“implement the Parliamentary…Ombudsman’s recommendation to make fair and transparent payments to Equitable Life policyholders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure.”
It has been this Government’s priority to provide a swift resolution to policyholders who have been waiting 10 years for justice.
A commitment to fair payments must be founded on a fair assessment of the losses suffered by policyholders, and that must start with the ombudsman’s approach. She sets this out in her report. “Equitable Life; a decade of regulatory failure”, where she introduces the concept of “relative loss”: that is the difference between what Equitable Life policyholders actually received from their policies, and what they would have received if they had invested elsewhere .The representations I have received over the summer from policyholders and their representatives have overwhelmingly supported this definition, and I believe that it is the right basis for calculating loss.
I am aware that parts of Sir John’s analysis were controversial, and I have always said that I would consider representations from interested parties on his work alongside it. Last week’s inquiry by the Public Administration Select Committee and their subsequent report recommended that Sir John’s final findings could not be used in order to determine the payments due to policyholders as his terms of reference included only the findings of maladministration accepted by the previous Government.
I have therefore decided to reject the final findings of Sir John’s report, as the later parts of his methodology are dependent upon which of the parliamentary ombudsman’s findings were included in his terms of reference, and which were not.
However, Sir John’s methodology includes a calculation of total relative loss, calculated from the end of 1992, is not affected by the restrictions on his terms of reference. Although there is disagreement around some aspects of this figure, there is considerable consensus around the main tenets that produce it, including the “alternative approach” he advocates which removes the need for individual assessment of policyholders’ claims. The comparators chosen to reach it have generally been recognised as being appropriate by various interested parties. The parliamentary ombudsman has also told me that she broadly supports the manner in which Sir John has approached this calculation.
Therefore, I believe that it is a fair representation of the relative loss suffered by policyholders. Towers Watson calculate this figure as £4.3 billion.
As the parliamentary ombudsman and PASC have recognised, the Equitable Life payments scheme must deliver fairness to taxpayers as well as policyholders. Given the significant pressures on public finances, it would not be fair to taxpayers for the payments scheme to pay out the full value of relative loss. Taking into consideration other spending commitments , and the reduction in bonuses suffered by policyholders as a result of the policy value cuts in 2001 and 2003, the Government have decided that £1 billion should be allocated to the payments scheme in the first three years of this spending review period.
However, when affordability is taken into consideration, it is important that the position of those who have been hardest hit by their losses is recognised. Policyholders with with profits annuities were particularly vulnerable to reductions in the value of their policies because they were unable to move their funds elsewhere, or to mitigate the impact of their losses through employment. They have consistently been highlighted to me by all groups as those most in need of compensation.
In the light of these factors, the Government will cover the cost of the total relative loss suffered by with profits annuitants (WPAs) who took out policies after 1 September 1992, estimated at £620 million. WPAs will receive regular payments, based on their full past and future relative losses.
The £1 billion set aside for the first three years of this spending review period will cover both the cost of the first three years of WPA regular payments, and all payments to other policyholders. The Independent Commission on Equitable Life Payments will advise on the allocation of funding to policyholders other than WPAs. I have also asked the independent commission to advise me on the prioritisation of payments to policyholders within this group, to ensure that those whose need is greatest are paid first. WPAs will continue to receive regular payments beyond the spending review period, over the course of their lifetime. In this way, the payments will effectively replace the income that they would have received from their Equitable Life policies. Once these payments are taken into account, I expect that the total amount paid out through the scheme will be in the region of £1.5 billion.
I have further decided that these payments will be free of tax.
I have today written to the Independent Commission on Equitable Life Payments informing them of my decision and its implications for their work, and reiterating my request for their advice on how this funding should be distributed by the end of January. As I announced on 22 July, it is our ambition to make the first payments to victims by the middle of 2011, and I hope that all parties will work together to help meet this goal.
I am publishing alongside this the Government’s response to PASC’s Third Report on Equitable Life, copies of which are available in the Vote Office. I am further publishing an updated letter from Towers Watson providing their final calculation of relative loss figures. This is available on the HM Treasury website, along with further information.
Boundary Commission for Wales: Interim Reviews
(13 years, 6 months ago)
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The Deputy Prime Minister (Mr Nick Clegg)
I have received notice in writing from the Boundary Commission for Wales of commencement of three interim reviews. The reviews will be of the boundaries of the parliamentary and assembly constituencies of:
Cardiff North County Constituency
Cardiff South and Penarth County Constituency
Ogmore County Constituency
Pontypridd County Constituency
Vale of Glamorgan County Constituency
And the Welsh electoral regions of:
South Wales Central Assembly Electoral Region
South Wales West Assembly Electoral Region.
Parliamentary Written Question (Correction)
(13 years, 6 months ago)
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The Parliamentary Under-Secretary of State for Health (Anne Milton)
I regret that the written answers given to my hon. Friends the Members for Southend West (Mr Amess) on 10 June 2010, Official Report, col. 219W, and for Suffolk Coastal (Dr Coffey) on 13 July, Official Report, col.705-6W, were incorrect. They should not have included the line that information on these contracts is not collected centrally. I have been advised that the Department does collect limited information covering independent sector costs.
The correct reply to my hon. Friends the Members for Southend West and for Suffolk Costal is that the Department does collect limited information on the cost to NHS providers (NHS trusts and primary care trust provider arms) of contracting services from independent sector providers. A revised response to the questions is set out below.
£ million | |
|---|---|
Cost to NHS organisations of providing abortion | 82.1 |
Cost to NHS providers of contracting abortions from independent sector providers | 10.4 |
Source 2008-09 reference costs Note The above excludes the cost of abortions commissioned directly by primary care trusts from the independent sector, which is not collected centrally. This means that the figure of £ 10.4 million quoted above is not representative of the total cost to the NHS of abortions carried out by independent sector providers, which in 2009 accounted for approximately 60% of all abortions carried out. Total NHS costs covering 2010 are not currently available. |
House of Lords
(13 years, 6 months ago)
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Taxation: Avoidance
(13 years, 6 months ago)
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Lord Foulkes of Cumnock
To ask Her Majesty’s Government what specific proposals they have to reduce tax avoidance.
The Commercial Secretary to the Treasury (Lord Sassoon)
The Government announced at the June Budget that they are strengthening the legislative framework to reduce the opportunities for tax avoidance. They are doing this through policy reform, by targeting areas of the tax system that present the highest avoidance risks and examining the case for a general anti-avoidance rule.
Lord Foulkes of Cumnock
But did the Minister hear the Chancellor say in his Statement, which the Minister is going to repeat, that,
“those with the broadest shoulders should bear the greatest burden”?
The Deputy Prime Minister, Nick Clegg, said that tax avoidance, as opposed to evasion, is legal but morally unacceptable, so is it not the case that if the multimillionaires, including those in the Cabinet and the Prime Minister’s business advisory committee, had paid their fair share, some of the cuts and some of the job losses that have been announced today could have been avoided?
Lord Sassoon
My Lords, I could trade names of Members all round the House but I am not going to stoop to that. The critical issue is indeed, as the noble Lord says, that tax avoidance as opposed to tax evasion is legal, but we want to make sure that taxpayers pay what is due. In that connection, we will take a broad, strategic approach to reduce the complexity of the tax system, to make sure that the tax code is legally robust and to make sure that we attack and challenge unreasonable avoidance in a focused and expert way.
Lord Oakeshott of Seagrove Bay
My Lords, non-dom tax status is an enormous open invitation to tax avoidance, as we know only too well from our battles to deal with non-doms in this House. Is the Minister aware of the Liberal Democrat tax manifesto pledge to make non-doms pay their full British tax after seven years? Will he also tell us when and how the Treasury will report on the promised review of non-dom tax status?
Lord Sassoon
My Lords, I remind my noble friend that the coalition Government’s policy in this area is that we will make every effort to tackle tax avoidance, including detailed development of Liberal Democrat policy. The policies that were in my noble friend’s party manifesto at the election are indeed getting detailed consideration. In particular, as he knows, the general anti-avoidance rule, which was the linchpin of those policies, has been the subject of recent consultation.
Lord Barnett
My Lords, this morning the Chancellor repeated what the Minister said to me in a Written Answer—namely, that it is hoped that doing something about tax avoidance will achieve £7 billion. In his Written Answer to me on 7 October, he said,
“separate figures are not available for avoidance and evasion, and could be produced only at disproportionate cost”.—[Official Report, 7/10/10; col. WA 28.]
In that case, how will he ever be able to say that he has saved £7 billion? Will he still be using it in his deficit-cutting programme?
Lord Sassoon
My Lords, it may be helpful if I make it clear that the £900 million of additional money that HMRC will have to use is principally to tackle tax evasion. We are talking about avoidance this afternoon, but the £7 billion will principally be from money that is not avoided but evaded.
Lord Forsyth of Drumlean
My Lords, would my noble friend not agree that how we use language is important? There is a big difference between tax evasion and tax avoidance. After all, everyone with an ISA is involved in tax avoidance. It is extremely important that we make clear the distinction between that which is legal and that which is illegal.
Lord Sassoon
My Lords, I am grateful to my noble friend, who has made the position absolutely clear. Minimising tax payments is perfectly reasonable. Where it gets into the avoidance on which HMRC needs to focus is where people have minimised their tax payments in a way that HMRC believes to be contrary to the way in which Parliament intended the tax laws to operate.
Lord Beecham
My Lords, will the Minister ask Sir Philip Green to complement his report on efficiency savings with a report on tax avoidance?
Lord Sassoon
My Lords, I think that Philip Green has done the nation a single service in exposing the extraordinary amount of waste in government that was left unattended to by the Labour Government for 13 years. We will come on to the consequences of that later this afternoon.
Lord Tebbit
My Lords, does my noble friend agree that an ounce of practical help is worth a kilo of words? Could he undertake to instruct the noble Lord, Lord Foulkes, on how he could offer not to avoid tax by taking advantage of his personal tax allowance? He could start paying 40 per cent tax on all his income from the first pound. That would save him from avoiding tax, which is obviously what he wants to do.
Lord Sassoon
I am grateful to my noble friend. One or two correspondents have written in to ask how they could volunteer cheques to the Treasury to help to reduce the national debt, but it seems that the Treasury does not yet have such a facility. However, if other people would like to contribute more in their tax, we can set up the necessary arrangements.
Lord Eatwell
My Lords, is the Minister aware that the figure that he has given for reducing tax avoidance and evasion is roughly the same as that which is being taken out of the welfare budget in the current spending review? Why do the Government not collect the taxes and stop hitting the poor?
Lord Sassoon
I am a little at a loss to understand why the noble Lord is questioning why we are putting extra money into HMRC to recover this enormous sum of £7 billion annually by the end of the spending review period when that was not done by the previous Government.
Lord Elystan-Morgan
My Lords, is it not the case that the real dividing line is not between evasion and avoidance? Evasion is criminal but, as far as avoidance is concerned, nomenclature should be devised to make it absolutely clear that there are two categories. There is that category where decent ordinary citizens so adjust their affairs that they properly are free from tax that would otherwise be charged. The other category is redolent with mind-boggling artifices that are nothing but a sham. Will the Minister give an undertaking to consider nomenclature that will draw a clear distinction between those two categories?
Lord Sassoon
My Lords, I appreciate the difficulty, which is why I attempted earlier to distinguish between the two cases around what appears to have been the intention of Parliament when it drafted the tax laws concerned.
Northern Ireland: Police Evidence
(13 years, 6 months ago)
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Lord Cope of Berkeley
To ask Her Majesty’s Government how long it takes on average for evidence to be transferred between police in Northern Ireland and the Republic of Ireland and vice versa through the Letter of Request procedure.
The Minister of State, Home Office (Baroness Neville-Jones)
My Lords, recent requests to the Home Office took between 12 days and 202 days from receipt of request to delivery of the evidence. This is based on a very small number and I cannot say how quickly Irish counterparts forwarded the evidence to their police. Northern Ireland prosecutors may send requests directly or via the Home Office. The Public Prosecution Service for Northern Ireland does not keep statistics on how long it takes to receive evidence.
Lord Cope of Berkeley
My Lords, I am sure that my noble friend would agree that, although co-operation between the two police forces north and south is excellent, the legal complexities of investigating and prosecuting cross-border crime are considerable. A letter of request is only a small part of that, but it is a part for which the Whitehall Government are responsible, as opposed to the Belfast Government under devolution. Why is it necessary for London to be involved in these cases? Would it not be better if a method of short-circuiting was found so that at least this aspect of the legal complexities could be speeded up?
Baroness Neville-Jones
As my noble friend says, active co-operation between the police forces on the ground is very good, as I think his parliamentary committee had reason to say recently. On the involvement of the central authority—that is, the Home Office—it is normal form for letters of request to come into the central authority for the purposes of ensuring that they are properly dealt with. The central authority in London has taken considerable pains to reduce the backlog and to improve its performance, as we were aware that there were complaints; indeed, the previous Government took some measures to improve the situation. It is fair to say that the performance now by the central authority is regarded as good and the Irish authorities have so said.
Lord Hunt of Kings Heath
My Lords, the noble Baroness will be aware of discussions in March this year between the police forces on both sides of the border, which identified the desirability of a faster transfer of evidence and suggested bypassing London and Dublin. Would it not be a good idea for the Government to look seriously into that proposal?
Baroness Neville-Jones
On the transfer of information, the outgoing request goes from the local authority—that is, it would go directly from Northern Ireland—while the incoming goes via the central authority. That is the system that is normally used. Occasionally, there are instances of that not happening but, as a general proposition, requests come that way. Our understanding is that that is what Dublin prefers.
Baroness Butler-Sloss
My Lords, is the Minister aware how complicated a letter of request is? I have had personal experience of this and it is a nightmare. Will the Government consider simplifying the formula for letters of request, because the lawyers have an absolute field day?
Baroness Neville-Jones
The noble and learned Baroness has raised an aspect of which I was not aware, but I shall take it back to see whether it is possible to reduce the formula. I imagine that this would probably be an EU-wide issue, but we would certainly want to do so.
Viscount Brookeborough
My Lords, does the Minister understand that many of us find her answers slightly confusing in that, on the one hand, she said that there are no statistics while, on the other hand, official letters are going backwards and forwards? Will she agree to ask for statistics to be made up from those records now? When she says that the response has been good, by whose judgment is it good? It is quite clear that a lot of people are not satisfied.
Baroness Neville-Jones
My Lords, I did not quite say that there are no statistics. I was asked about present performance and I said that my answer was based on a very small set of statistics. I can give some figures: 17 requests have been received in total this year from the Republic of Ireland, of which six concern Northern Ireland. That is against a background of 1,585 letters of request overall. We are dealing with low numbers, which is why averaging statistics is fairly misleading. My other point was that, in relation to outgoing requests from Northern Ireland, the Northern Irish authorities do not collect those statistics, so I am not able to give that figure.
Lord Smith of Clifton
My Lords, does the Minister agree that there is something special about requests regarding details from Northern Ireland and the Republic, which is that we have a land border, the only one that we have? Does she also agree that, with the increase in dissident republican paramilitary activity, this issue is becoming urgent and should not just be left for the lawyers to take their time?
Baroness Neville-Jones
My Lords, in this particular instance we are talking about evidential letters, but there is the quite separate and important issue that the noble Lord has raised, which is cross-border co-operation between police authorities in relation to terrorism. However, that is not dealt with through this system. Even so, we agree entirely with the importance of what he has said.
Lord Glentoran
My Lords, does my noble friend realise that for some years we worked with the previous Government to try to get the bureaucratic processes and the legislation in place to change exactly this problem? The police in Northern Ireland are constantly under pressure to get more prosecutions through the courts, so this is an old problem, not a new one. I have certainly had conversations with two previous Attorneys-General, in particular the noble and learned Baroness, Lady Scotland, who is a long-standing friend, and I have been told that it is possible but that a lot of work needs to be done. This problem is serious—much more so than it appears—so will the noble Baroness please endeavour to get something moving?
Baroness Neville-Jones
I take note of what my noble friend says. There are two issues here, one being the appropriateness of the system and the other being how well it is performing. I think that its performance is greatly improved: the backlog, which was a source of complaint, has been greatly reduced, while more measures are being introduced to reduce it still further. The second point is that the procedure followed itself. Our belief is that that suits not only the UK end but also, as things stand, Dublin. However, we are always looking for improvement and I am aware that there are other areas where we are trying to progress further improvements in co-operation.
Climate Change: Cancun
(13 years, 6 months ago)
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The Lord Bishop of Liverpool
To ask Her Majesty’s Government what proposals they will table at the UN Climate Change Conference in Cancun.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)
My Lords, the Government are committed to working for an ambitious global deal to tackle climate change. At Cancun, we want to see substantive progress made on a politically balanced package of decisions that help to re-establish momentum towards that goal.
The Lord Bishop of Liverpool
I thank the Minister for that encouraging Answer. At Copenhagen there was an international agreement to set up a fund to assist the developing countries to mitigate and adapt to the changing climate. Can the Minister confirm that Her Majesty’s Government will honour that commitment? If so, will they at Cancun encourage other nations not to renege on their commitments?
Lord Marland
I thank the right reverend Prelate for his question. I also thank him for the work that he has done with the Tearfund and Carbon Fast, and for the leadership that the Church of England has shown with Shrinking the Footprint, which will produce a 42 per cent reduction in its carbon emissions by 2020. The leadership by all Churches is very important to this subject. I am rather delaying the great opportunity that the right reverend Prelate has given me: to be able to announce that the pledge made by the Labour Government to fast start finance of £1.5 billion between 2010 and 2013 is, I am happy to say, now a reality.
Lord Lawson of Blaby
My Lords, is the Minister aware that the chairman of the Government’s own Green Investment Bank commission has authoritatively stated that the cost of meeting our current carbon reduction commitments in this country is somewhere between £800 billion and £1 trillion? Does he not agree that, with the best will in the world, this mind-boggling cost cannot be justified except in the context of a binding global carbon reduction agreement? Therefore, in the absence of such an agreement being secured at Cancun, does he not agree that it is only commonsense to suspend the Climate Change Act until such time as a binding global agreement is secured?
Lord Marland
My Lords, when I bumped into my noble friend in the Corridor and he said that he was catching the train to York I was rather relieved. Sadly, he will be catching a slightly later train than I was hoping for. I have now forgotten entirely what his question was.
Lord Clark of Windermere
Is the Minister aware that deforestation is one of the largest sources of greenhouse emissions, and that to stop deforestation would be a win, win, win position? Can he assure the House that the Government will push to relieve deforestation at the conference at Cancun?
Lord Marland
The answer is without question, of course. Of that £1.5 billion, which is now a reality, £300 million is for the deforestation issue to which the noble Lord refers. We are deeply committed to the REDD-plus partnership that we have established working with France, Norway and Papua New Guinea.
Lord Deben
Does my noble friend accept that the cost of not acting now is much bigger than the cost that the head of the Green Investment Bank has suggested? Will he therefore make sure that we do not stop or slow our actions against climate change?
Lord Marland
I thank my noble friend. I am glad that he has not taken a train anywhere and that he has stayed to allow me to answer his question. I am grateful for that question from my own Benches; I am not really used to it, as a matter of fact. There is no doubt that the climate is changing: we have seen the worst ever flooding in Pakistan in its history; there have been record-breaking temperatures in Moscow; and 17 countries in the northern hemisphere alone have recorded their highest ever temperatures. It is a substantial problem. This Government are committed to being the greenest Government ever and to supporting all endeavours on climate change.
Baroness Kinnock of Holyhead
My Lords, on the question of additionality, which is the key issue in terms of how you pay for adaptation and mitigation on climate change, will the Minister confirm that on the fast-track issue the British Government will insist on additional money and not on money that has been recycled, rebadged or snaffled from the overseas development budget?
Lord Marland
I think that the noble Baroness is referring to the fast start scheme. The fast start finance of £1.5 billion is ring-fenced and is our commitment to overseas development. It is not recycled money; I want the noble Baroness to understand that clearly.
Baroness Parminter
My Lords, what proposals do the Government have to ensure that the imminent report from the United Nations Secretary-General’s advisory group on climate finance is brought within the United Nations Framework Convention on Climate Change, so that its contribution to identifying sources of funding for developing countries dealing with climate change can inform future negotiations?
Lord Marland
I can tell the noble Baroness that we intend to work very closely. In fact, my right honourable friend the Secretary of State, Chris Huhne, is on the UN advisory group on climate finance and we intend to encourage the raising of $100 billion by 2020 to support the carbon reduction.
Lord Boateng
Will the Minister please ensure that our proposals take practical account of the fact that the continent which will suffer the greatest from climate change is the continent that had the least to do with its creation, namely Africa? Its rainforests also contain our best hope for combating climate change, while the role of Africa’s agriculturalists and traditional leaders should be taken into account in all our proposals.
Lord Marland
The short answer is yes. It is absolutely fundamental and a very important continent in this regard. A lot of our activity will be focused in that direction.
Immigration: Jimmy Mubenga
(13 years, 6 months ago)
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Baroness Neuberger
To ask Her Majesty’s Government whether there will be a full investigation into the death of Mr Jimmy Mubenga during deportation.
The Minister of State, Home Office (Baroness Neville-Jones)
My Lords, the circumstances of Mr Mubenga’s death are the subject of police investigation. A Prisons and Probation Ombudsman investigation and a coroner’s inquest will also take place in due course. Escort staff receive training on issues such as welfare, first aid, use of force and restraint. Prior to a removal, escorts are provided with a risk assessment of the individual, which will include known facts on medical conditions, the risk of self-harm, the likelihood of any attempt to escape and known criminal activities or violent behaviour.
Baroness Neuberger
I thank my noble friend for her reply. Have the Government taken full account of the report done for the Home Office by the noble Baroness, Lady O’Loan, in March this year? Were all her recommendations about the use of force taken into account?
Baroness Neville-Jones
My Lords, it is indeed the case that the noble Baroness, Lady O’Loan, reported in March this year and all her recommendations are being put into effect. As she reported at the time, she found no evidence of systematic abuse by the UK Border Agency.
The Earl of Sandwich
My Lords, I declare an interest as patron of Haslar detention centre in Portsmouth. Will the noble Baroness kindly tell the House how many Zimbabweans are proposed to be removed from this country and over what period that will happen?
Baroness Neville-Jones
My Lords, I regret to say that I do not have that figure to hand, but I will certainly write to the noble Earl on the matter.
Lord Judd
Does the noble Baroness agree not only that this issue is grave in this particular instance but, with her responsibilities for security, that the trouble is that, when something goes wrong, it plays directly into the hands of those who are trying to manipulate opinion in support of militant rebels, terrorists and the rest? It is therefore essential to get the administration of policy in this area right and humane in the cause of winning hearts and minds.
Baroness Neville-Jones
My Lords, I am quite certain that the Government agree with every single point that the noble Lord has just made. This is the first time that there has been a death of an escorted individual and it is extraordinarily regrettable. We entirely take the point that this is exactly what we do not wish to happen. We will take the consequences and the findings of any investigation very seriously.
Baroness O'Loan
My Lords, the report that I authored, which has been referred to, made specific recommendations on the type of technique used for control and restraint and the training provided for the use of that technique, which was a “one size fits all”. Although those recommendations have been accepted, are they actually being implemented? Also, can the Minister say whether the chief inspector of UKBA is monitoring the implementation of the recommendations, as I also recommended?
Baroness Neville-Jones
On the noble Baroness’s second point, the chief inspector of UKBA is doing that. On her first point, there is a review going on of the whole question of accreditation. The techniques used, as the noble Baroness will know, are ones that are used by the prison officers’ administration, but we are looking, with its help, at whether we can find further training with regard to the process of accreditation. We agree that it is important that the correct techniques of restraint are used, because that issue can give rise to the sort of difficulties that we may have seen.
Lord Ramsbotham
My Lords, I should declare an interest as the person who forwarded the report Outsourcing Abuse to the Home Secretary more than two and a half years ago, which prompted her to ask the noble Baroness, Lady O’Loan, to conduct an inquiry. The report was about the use of force during the detention and removal of asylum seekers and many other issues as well. Are any of the recommendations in that report also being processed?
Baroness Neville-Jones
My Lords, my belief is that, given the seriousness of this issue, the recommendations that were made have indeed been implemented. In the light of what has happened, we need to go through those recommendations as well as those of the noble Baroness, Lady O’Loan, to see whether there are things that we can do better or in addition. We will look seriously at the outcome of the investigations that are taking place. We do not wish to see this happen again.
Baroness Hamwee
My Lords, will the Minister assure the House that regard is being had not only to training but also to including the correct requirements in the commissioning of private organisations so that regard is had to this matter at the highest level initially? What training and instructions are there with regard to other passengers who may be forced to witness such an unhappy occurrence? This may be a second-order matter, but the incident must have been extraordinarily distressing for the other passengers on the flight.
Baroness Neville-Jones
The noble Baroness’s last point is right, although I hope that we do not get to the point of having to train passengers to witness unfortunate events. On her point about accreditation and the requirements laid down for the private sector escort companies, this issue is taken seriously. Requirements are laid down and such companies receive training, which is compulsorily renewed. We have an accreditation system and companies and individuals do indeed lose their accreditation. We are trying to inject a great deal of discipline into this system.
Arrangement of Business
(13 years, 6 months ago)
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Baroness Anelay of St Johns
My Lords, my noble friend Lord Sassoon will now repeat a Statement on the comprehensive spending review 2010 that was made earlier today in the other place. It may be helpful if I remind the House of the guidance in the Companion:
“Ministerial statements are made for the information of the House, and although brief comments and questions from all quarters of the House are allowed, statements should not be made the occasion for an immediate debate”.
The Companion goes on to make clear that:
“If a debate upon a statement is desired, a notice should be tabled for a later date”.
A debate on the spending review has been agreed between the usual channels and will be on Monday 1 November. That debate has already been published in Forthcoming Business today and a list of speakers opened this morning. However, the usual channels have been discussing whether there is a case today to extend the 20-minute period available for Back-Bench questions and answers, as has happened in exceptional circumstances in the past. In view of the length of today’s Statement, the usual channels have agreed that we should give an extra 10 minutes for Back-Bench questions and answers.
Lord Bassam of Brighton
My Lords, I am grateful to the Chief Whip for her statement, which I welcome. Yesterday’s debate on the strategic defence and security review showed that there is very strong feeling in this House that the time allowed for Back-Benchers to debate such vital issues is not sufficient; that is why we asked for extra time. In the past few days, many Members on all sides of the House have indicated, if anything, stronger feelings about the time which had been proposed for today’s Statement on the CSR, which, by the Government’s own account, is enormously important for our economy and our whole country. A reasonable offer has been made and we accept it, but ultimately the offer is not sufficient. Many Members across the House seek a longer period in which to discuss urgent matters such as those before us today.
We recognise that time has been allocated for a fuller debate, which we also welcome. However, that is not until next month. This matter pinpoints an issue that many Members have raised with us—that this House is currently poorly provided with the means by which we can immediately consider important issues. We have provision for topical Questions and for Private Notice Questions, but, because of this unsatisfied need for a means by which immediate issues can be discussed, we believe that this is an appropriate issue for the Leader’s Group on working practices to give greater consideration to. We will accordingly write to the noble Lord, Lord Goodlad, who chairs the group, proposing that it does exactly that.
Baroness Anelay of St Johns
My Lords, I am grateful to the noble Lord for his support for the fact that discussion on the Statement should be extended, as was agreed by the usual channels. On very rare occasions the time limit for Back-Bench questions and comments on Statements has been extended by 10 minutes, most recently on the constitutional renewal Statement last June. Although there is always pressure on time in this House because noble Lords take their duties very seriously on all matters of business, it is by no means the case that Statements have always been extended over the past 13 years. For example, when the White Paper on House of Lords reform was published in July 2008, there was no extension of time; nor was that done in October 2008 or January 2009, when a succession of Statements were made by the previous Government in response to the turmoil in the financial markets and the banking sector. However, that is not to undermine the fact that this House always has the right to make its representations with regard to the tabling of business through the usual channels and, on occasion, through other means.
I note in particular two points that the noble Lord has just made. First, he claims that the debate will not take place until next month. I gently remind him that it is a matter of merely 10 days. In that period the expectation is that Peers will have the opportunity to look at further developments arising from today, such as further Statements that may appear from other departments. Therefore, all Members of the House will have a greater opportunity to make an impact on that debate. It is, of course, our responsibility as the usual channels to act in the best interests of all Members and we work together very closely to achieve exactly that.
With regard to the statement by the noble Lord, Lord Bassam, that extra time was not granted yesterday, as far as I am aware no request was made in respect of yesterday’s Statement. However, I am pleased that we have achieved agreement on today’s.
Lord Haskel
The noble Baroness referred to occasions in 2008 when there were important matters to be discussed and implied that the Government did not allow an extension of time. Did the Opposition ask for that extension?
Lord Foulkes of Cumnock
My Lords, I apologise to the House for the manner in which I raised the issue yesterday. However, on the substance of the issue, I have been overwhelmed by noble Lords from both sides of the House saying they agree with me that it was strange that we had only 20 minutes for Back-Bench questions, and the House was up before 7 pm. There were so many people who wanted to participate in yesterday’s debate, not just on the Labour side but distinguished former service chiefs and many other people with a lot to say. Now we have a Statement on a comprehensive spending review that covers five years and every department of state, but we are getting only an extra 10 minutes. I hope that the Chief Whip will respond positively to my noble friend’s request and say today that they will agree that this matter should be considered in an appropriate way, so that some flexibility is allowed.
Baroness Anelay of St Johns
My Lords, I am pleased to have had the opportunity to dispel, I hope, misunderstanding about the procedure of this House. Certainly yesterday the House abided by the correct procedure as laid down in the Companion, which guides all our behaviour. If changes are made to the Companion procedure, it is only after discussion by the Procedure Committee and, of course, the decision thereafter by the whole House. That is a continuing development. With regard to the representations made to the noble Lord, Lord Foulkes, clearly all Peers who wish to take part in a debate on yesterday’s matters will have the opportunity to do so in a non-time-limited debate on 12 November. That follows the pattern of the previous Government. I was always grateful to the noble Lord, Lord Bassam, when that was offered by the previous Government and we complied with that. It provided a time, uninterrupted by other Statements on a Friday, to listen fully to the views of experienced noble Lords in this House on defence matters. I am sure that we will enjoy that again. With regard to the latter point made by the noble Lord, Lord Foulkes, I would never prejudge or exempt any Leader’s Group from action. It is for the chair of that group to make decisions—not me.
Lord Brooke of Alverthorpe
Perhaps I may briefly try to be helpful. Am I to understand that we are—as I think we are—to have the Statement repeated? This is ludicrous. Most people have watched this on television, been in the other Chamber or can read. When we come to review the way we organise ourselves and the noble Lord, Lord Goodlad, looks at this issue, I hope that the noble Baroness might give a strong recommendation that in these circumstances we do not require the full Statement to be read out.
Baroness Anelay of St Johns
My Lords, the genuine joy of this place is that novel points can excite great interest. I am sure that this is something that will be further discussed. I am very interested by that proposal, but of course today we will follow the procedure that the Statement will be repeated by my noble friend.
Comprehensive Spending Review
(13 years, 6 months ago)
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The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, with the leave of the House, I will repeat a Statement made in another place by my right honourable friend the Chancellor of the Exchequer.
“Mr Speaker, today’s the day when Britain steps back from the brink and when we confront the bills from a decade of debt; a day of rebuilding, when we set out a four-year plan to put our public services and welfare state on a sustainable footing for the long term, so that they can do their job of providing for families, protecting the vulnerable and underpinning a competitive economy. It is a hard road, but it leads to a better future.
We are going to bring the years of ever-rising borrowing to an end. We are going to ensure, like every solvent household in the country: that what we buy, we can afford, that the bills we incur we have the income to meet and that we do not saddle our children with the interest on the interest on the interest of the debts we were not ourselves prepared to pay.
Tackling this budget deficit is unavoidable. The decisions about how we do it are not. There are choices, and today we make them. Investment in the future, rather than the bills of past failure: that is our choice. We have chosen to spend on the country’s most important priorities: the healthcare of our people; the education of our young; our nation’s security; and the infrastructure that supports our economic growth. We have chosen to cut the waste and reform the welfare system that our country can no longer afford.
This is the context of the spending review. We have, at £109 billion, the largest structural budget deficit in Europe—this at a time when the whole world is concerned about high deficits and our economic stability depends on allaying those concerns. We are paying at the rate of £120 million a day—£43 billion a year—in debt interest, this at a time when we all know that the money would far better serve the needs of our own citizens than those of the foreign creditors we borrow from. We have inherited from the previous Government plans—if you can call them that—that envisaged our national debt ratio still rising in the year 2014. Not a single penny of savings had been identified. Indeed, they are plans that envisaged the Chancellor of the Exchequer standing here in 2014 presenting a spending review that still had years of cutting public spending ahead of it. That is why last year the IMF warned this country to accelerate the reduction in the deficit. That is why the OECD, the Governor of the Bank of England and the CBI all agreed with the IMF.
The action we have taken since May has taken Britain out of the financial danger zone. The immediate reductions to in-year spending have bought us a breathing space in the sovereign debt storm. The creation of an independent Office for Budget Responsibility has brought honesty back to official forecasts. I can confirm to the House that the OBR and its new chair, Robert Chote, have audited all of the annually managed expenditure savings in today’s Statement.
The emergency Budget in June was the moment when fiscal credibility was restored. Our market interest rates fell to near record lows, our country’s credit rating was affirmed and the IMF went from issuing warnings to calling our Budget “essential”. Now we must implement some of the key decisions required by that Budget. To back down now and abandon our plans would be the road to economic ruin. We will stick to the course, we will secure our country’s stability and we will not take Britain back to the brink of bankruptcy.
In the Budget, I set out the tax increases we were prepared to make, including on capital gains at the higher rate, pension relief on the largest contributions and, for the first time, a permanent levy on banks. We also had to increase VAT, where, fortunately, we were able to benefit from the preparatory work of the previous Government. But I made it clear that spending reductions rather than tax rises needed to make up the bulk of the consolidation. That is what the leading international evidence suggested worked best. So I set out spending totals for the coming years and announced some £11 billion of welfare savings that would help achieve them. I also set out a new fiscal mandate for the public finances to eliminate the structural deficit by balancing the cyclically adjusted current budget over five years, by 2015-16. We set a target of national debt falling as a proportion of national income by that same year. We explained how, for reasons of caution, we will achieve both these objectives a year earlier in 2014-15.
I can confirm that the spending plans I set out today will achieve a balanced structural current budget and falling national debt on that same timetable. I can further confirm that the current spending totals I set out in the Budget for each of the next four years are the same as the current spending totals I set out today. They have not changed. Next year, current expenditure will be £651 billion, then £665 billion the year after and £679 billion the year after that, before reaching £693 billion in 2014-15. The House will note that current spending is rising, not falling, over this period. This is partly because, even with the measures we take today, debt interest payments will continue to grow in these years. Debt interest payments will reach £63 billion in 2014-15—for it takes time to turn around the debt supertanker—but I can now report to the House that against the plans we inherited, one of the departments which suffers the greatest cut today, and at the steepest rate, is the department for debt interest. Debt interest payments will be lower by £1 billion in 2012, then £1.8 billion in 2013 and £3 billion in 2014—a total of £5 billion over the course of the spending review. That is the equivalent of 16 new hospitals or the annual salaries of 100,000 teachers.
At the Budget, I also set out my plans for capital spending over the next four years. I can now tell the House that capital spending will be £51 billion next year, then £49 billion, then £46 billion, and £47 billion in 2014-15. That is about £2 billion a year higher than I set out in the Budget. Given the contractual obligations we inherited from the previous Government, doing anything else would have meant cutting projects which would clearly enhance the economic infrastructure of the country. This has no direct impact on whether we meet the fiscal mandate or the year in which the debt ratio starts falling. So total public expenditure—capital and current—over the coming years will be £702 billion next year, then £713 billion, £724 billion, and £740 billion in 2014-15. In real terms, public spending will be at the same level as in 2008. Our public services and our welfare system will be put on a sustainable long-term footing and we will make sure that the financial catastrophe that happened under the previous Government never, ever happens again.
I turn now to the spending decisions and the three principles I propose to apply to the choices we have to make. First, on reform, in every area where we make savings, we must leave no stone unturned in our search for waste and we must deliver the changes necessary to make our public services fit for the modern age.
Secondly, on fairness, we are all in this together and all must make a contribution. Fairness means creating a welfare system that helps the vulnerable, supports people into work and is also affordable for the working families who pay for it from their taxes. Fairness also means that, across the entire deficit reduction plan, those with the broadest shoulders should bear the greatest burden; those with the most should pay the most, including our banks.
Thirdly, on growth, when money is short, we should ruthlessly prioritise those areas of public spending which are most likely to support economic growth, including investments in our transport and green energy infrastructure, our science base and the skills and education of citizens.
Let me explain now how these principles have guided our specific decisions. First, on reform, I believe that the public sector needs to change to support the aspirations and expectations of today’s population, rather than the aspirations and expectations of the 1950s, so the spending review is underpinned by a far-reaching programme of public service reform. We saw over the past decade that more money without reform was a recipe for failure; less money without reform would be worse; and we are not prepared to accept that, so we have begun by squeezing every last penny that we can find out of waste and administration costs.
Our ambition in this review was to find £3 billion of savings from the administrative budgets of central government departments. With the help of the Green review and the work done by my right honourable friend the Minister for the Cabinet Office, I can tell the House that we have gone further than we thought possible in cutting back-office costs. Quangos will be abolished, services will be integrated, assets will be sold and the administrative budgets of every main government department will be cut by a third. The result is this: we promised £3 billion of Whitehall savings; we will deliver £6 billion.
Of course, there is understandable concern about the reduction in the total public sector headcount that will result from the measures in the spending review. We believe that the best estimate remains the one set out by the independent Office for Budget Responsibility. It has forecast a reduction in headcount of 490,000 over the spending review period. Let us be clear: that is over four years, not overnight. Much of it will be achieved through natural turnover, by leaving posts unfilled as they become vacant. Estimates suggest a turnover rate of over 8 per cent in the public sector. But yes, there will be some redundancies, which will be up to the decisions of individual employers in the public sector. That is unavoidable when the country has run out of money.
We feel responsible for every individual who works for the Government and we will always do everything that we can to help them to find alternative work. In fact, in the past three months alone, the economy created 178,000 jobs. So we should remember that, unless we deal with this record budget deficit decisively, many more jobs will be in danger in both the private and the public sector.
The Cabinet Office and the Treasury will oversee the programme of Whitehall savings. Both departments will lead by example. The core Cabinet Office budget will be reduced by £55 million by 2014-15. Additional allocations will be provided to fund electoral reform, support the big society, establish community organisers and launch the pilots for the national citizen service, which will give young people, for the first time, a right of passage to citizenship.
In recognition of the challenges faced by the voluntary and community sector, I am establishing a one-year £100 million transition fund to help those facing real hardship. The Treasury will see its overall budget reduced by 33 per cent and we will share the department’s enormously expensive PFI building, which my predecessor -but-one signed up to, by moving part of the Cabinet Office into the same premises.
The Chancellor is also a royal trustee, and I want to say something briefly about the Civil List. As I outlined in the Budget, the 10-year settlement expired this year, and no provision for a new settlement had been made when we entered office. Her Majesty has graciously agreed to a one-year cash freeze in the Civil List for next year. Going forward, she has also agreed that total royal household spending will fall by 14 per cent in 2012-13, while grants to the household will be frozen in cash terms. In order to support the costs of the historic diamond jubilee, which the whole country is looking forward to celebrating, there will be a temporary additional facility of £1 million. After that, the royal household will receive a new sovereign support grant linked to a portion of the revenue of the Crown Estate, so that my successors do not have to return to the issue so often.
Central to this review is the reshaping of our public services. First, there needs to be a dramatic shift in the balance of power from the central to the local. A policy of rising burdens, regulations, targets, assessments and guidance has undermined local democracy and stifled innovation. We will completely reverse this. We will give GPs power to buy local services, schools the freedom to reward good teachers, and communities the right to elect their police and crime commissioners. Secondly, we should understand that all the services paid for by government do not have to be delivered by government. So we will expand the use of personal budgets for special education needs, children with disabilities and long-term health conditions. We will use new payment mechanisms for prisons, probation, and community health services, and we will encourage new providers in adult social care, early years and road management.
For local government, the deficit we have inherited means an unavoidably challenging settlement. There will be overall savings in funding to councils of 7.1 per cent a year for four years. But to help councils, we propose a massive devolution of financial control. Today, I can confirm that ring-fencing of all local government revenue grants will end from April next year. The only exception will be simplified schools grants and a public health grant. Outside of schools, police and the fire service, the number of separate core grants that go to local authorities will be reduced from more than 90 to fewer than 10. Councils and their leaders will remain accountable, but they will no longer have to report on 4,700 local area agreement targets.
The local government settlement includes funding for next year’s council tax freeze to help families when their budgets are too tight. We are also introducing tax increment finance powers, allowing councils to fund key projects by borrowing against future increases in locally collected business rates. Some in local government have concerns about the financing of social care. I can announce that grant funding for social care will be increased by an additional £1 billion by the fourth year of the spending review and a further £1 billion for social care will be provided through the NHS to support joint working with councils, so that elderly people do not continue to fall through the crack between two systems. That is a total of £2 billion of additional funding for social care to protect the most vulnerable.
We will also reform our social housing system, for it is currently failing to address the needs of the country. Over 10 years, more than half a million social rented properties were lost. Waiting lists have shot up, families have been unable to move, and, although a generation ago only one in 10 families in social housing had no one working, this had risen to one in three by 2008-09.
We will ensure that social housing is more flexible. The terms for existing social tenants and their rent levels will remain unchanged. New tenants will be offered intermediate rents at around 80 per cent of the market rent. Alongside £4.4 billion of capital resources, this will enable us to build up to 150,000 new affordable homes over the next four years. We will continue to improve the existing housing stock through the Decent Homes programme, and we will reform the planning system so that we put local people in charge, reduce burdens on builders and encourage more homes to be built, with a new homes bonus scheme.
Within an overall resource budget for the Department for Communities and Local Government that is being reduced to £1.1 billion over the period, priority will be given to protecting the disabled facilities grants. This will go alongside a £6 billion commitment over four years to the Supporting People programme, which provides help with housing costs for thousands of the most vulnerable people in our communities.
In recognition of the important service provided by the fire and rescue service, we have decided to limit its budget reductions in return for substantial operational reform.
I turn to reforms in our security and defence. Yesterday my right honourable friend the Prime Minister set out the conclusions of the strategic defence and security review. He explained in detail how we will protect the British people, deliver on our international obligations and secure British influence around the world. This spending review provides the resources to do just that. The budget for the Ministry of Defence will reach £33.5 billion in 2014-15, a saving of 8 per cent over the period. On top of this settlement, we will continue to provide out of the reserve the resources that our forces in Afghanistan require. As a Chancellor, I believe strongly that if we ask our brave service men and women to risk their lives on our behalf in active combat, then we should give them all the tools they need to finish the job.
But our international influence and our commitments to the world are determined not only by our military capabilities. Our diplomacy and development policy matter, too. Savings of 24 per cent in the Foreign and Commonwealth Office budget will be achieved over the review period by a sharp reduction in the number of Whitehall-based diplomats and back-office functions. There will be a focus on helping British companies win exports and secure jobs at home, and, with the help of UKTI, we will attract significant overseas investment to our shores.
I can also confirm that this coalition Government will be the first British Government in history, and we will be the first major country in the world, to honour the United Nations commitment on international aid. The Department for International Development’s budget will rise to £11.5 billion over the next four years. Overseas development will reach 0.7 per cent of national income in 2013. This will halve the number of deaths caused by malaria. It will save the lives of 50,000 women in pregnancy and 250,000 new-born babies. Whether working behind the counter of a charity shop, volunteering abroad or contributing taxes to our aid budget, Britons can hold their heads up high and say, even in these difficult times, that we will honour the promise we made to the very poorest in our world.
Our aid budget allows Britain to lead in the world. It may be protected from cuts but not from scrutiny. I have agreed with my right honourable friend the Development Secretary a plan of reform that reduces administration costs to half the global donor average, ends the aid programmes that we inherited in China and Russia, focuses on conflict resolution and creates an independent commission to assess the impact of the money we commit.
I turn now to security at home. Protecting the citizen is a primary duty of government. Our police put themselves in harm’s way to make the rest of us safe, and we owe them a debt of gratitude. But no public service can be immune from reform. Her Majesty’s Inspector of Constabulary found in his recent report that significant savings could be made in police budgets without affecting the quality of front-line policing. Tom Winsor is leading a review of terms and conditions which will report on how the police service can manage its resources to serve the public even more cost-effectively.
Using independent forecasts for the precept, the settlement I am proposing today will see police spending falling by 4 per cent each year. By cutting costs and scrapping bureaucracy, we are saving hundreds of thousands of man-hours. Our aim is to avoid any reduction in the visibility and availability of police in our streets.
Our new national security strategy judges terrorism to be one of the highest risks facing this country. Therefore, I am prioritising counterterrorism over the review period, in both the Home Office budget and the single intelligence account. We have been assured that this will maintain our operational capabilities against al-Qaeda and its affiliates and against Northern Irish terrorist threats. This will enable us to meet the terrorist threat and protect the Olympic Games in 2012. Overall, the Home Office budget will find savings of an average of 6 per cent a year.
The Ministry of Justice’s budget will reach £7 billion by the end of the four-year period, with average savings of 6 per cent a year. A Green Paper will set out proposals to reform sentencing, intervene earlier to give treatment to mentally ill offenders, and use voluntary and private providers to reduce reoffending. Over the period, £1.3 billion of capital will also be provided to maintain the existing prison estate and fund essential new-build projects, but plans for a new 1,500-place prison will be deferred. The Law Officers’ Department will reduce its budget by a total of 24 per cent over the period, with the Crown Prosecution Service greatly reducing its inflated cost base. Reforms will also be required to streamline the criminal justice system, close underused courts and reduce the legal aid bill. We need fair access to justice, but provided at a fair cost for the taxpayer.
All the reforms I have spoken of—to Whitehall and the way services are provided, to local government, and to our defence, security and justice system—will improve both the value for money for taxpayers and the service provided to the public. Next month, each government department will publish a business plan setting out its reform plans for the next four years, so that their priorities are clear and the public can hold them to account.
Reform is one of the guiding principles of the spending review. So too is fairness. Let us be clear. There is nothing fair about running huge budget deficits, and burdening future generations with the debts that we ourselves are not prepared to pay. How ironic that it was the previous Labour Prime Minister himself who once observed:
“Public finances must be sustainable over the long term. If they are not, the poor … will suffer most”.—[Official Report, Commons, 2/7/97; col. 303.]
That is why we are restoring order to our public finances before that is allowed to happen.
A fair Government deal with the deficit decisively—that is what we are doing today—and a fair Government make sure that those with the broadest shoulders bear the greatest burden. The distributional analysis published today shows that those on the highest incomes will contribute more towards this entire fiscal consolidation, not just in cash terms, but also as a proportion of their income and consumption of public services combined.
I completely understand the public’s anger that the banks that were so appallingly regulated over the past decade, and whose near collapse wrought such damage on the economy, should now be contemplating paying high bonuses. We are overhauling the system of regulation that we inherited so that the Bank of England, with its clout and reputation, is put in charge. We have set up the Independent Commission on Banking to look at the structure of the industry, and next year we will receive its report.
Today we set out very clearly, for all to take note of, our objective in taxing the banking industry going forward. We neither want to let banks off making their fair contribution, nor do we want to drive them abroad. Many hundreds of thousands of jobs across the whole United Kingdom depend on Britain being a competitive place for financial services. Our aim will be to extract the maximum sustainable tax revenues from financial services. We will assess what those maximum revenues could be—not just in one year, but over a period of years.
We have already decided, in the face of opposition from the previous Government, to introduce a permanent levy on banks. The legislation will be published tomorrow. Once fully effective, the permanent levy will raise more net each year and every year for the Exchequer than the one-year bonus tax did last year—and I note that the previous Chancellor now admits that it failed to curb behaviour and was not sustainable.
However, that is not enough. We want the banks to pay not just by the letter of the tax law, but by its spirit. A year ago, the previous Government announced in a fanfare that they would require banks to sign up to the code of practice on taxation. I have asked the Revenue how many of our leading 15 banks actually signed up. The answer is four—four out of 15. That is what happened when they were in office: all talk and no action. I have instructed the Revenue to work with the banking sector to ensure the remaining banks have implemented the code of practice by the end of next month.
We also need to address the situation under the last Government where the gap between the taxes owed and the taxes paid grew considerably. So in this spending review, while the HM Revenue and Customs budget will be expected to find resource savings of 15 per cent through the better use of new technology, greater efficiency and better IT contracts, we will be spending £900 million more on targeting tax evasion and fraud. This additional £900 million is expected to help us collect a missing £7 billion in tax revenues.
Nor will fraud in the welfare system be tolerated anymore. We estimate that £5 billion is being lost this way each year—£5 billion that others have to work long hours to pay in their taxes. This week we published our plans to step up the fight to catch benefit cheats, and to deploy uncompromising penalties when they are caught.
That brings me to the wider welfare budget. A civilised country provides for families, protects the most vulnerable, helps those who look for work, and supports those in retirement. That is why one of the first acts of this coalition Government was to relink the basic state pension to earnings, and guarantee a rise each year by earnings, inflation or 2.5 per cent—whichever was higher. Never again will those who worked hard all their lives be insulted with a state pension increase of just 75p. But this guarantee of a decent income in retirement has to be paid for at a time when people are living much longer than anyone predicted. We should celebrate that fact, but also confront it. Lord Turner’s report on pensions, commissioned by the last Government, acknowledged that a more generous state pension had to be funded by an increase in the pension age. Even since its publication, life expectancy has risen further than it predicted.
Before the summer we launched a review on increasing the state pension age, and that has now concluded. As a result, I can today announce that the state pension age for men and women will reach 66 by 2020. This will involve a gradual increase in the state pension age from 65 to 66, starting in 2018; and it will mean an acceleration of the increase in the female pension age already under way since this April. From 2016, the rate of increase will be three months in every four rather than the current plan of one month in every two. Raising the state pension age is what many countries are now doing, and will by the end of the next Parliament save over £5 billion a year—money which will be used to provide a more generous basic state pension as we manage demographic pressures.
Earlier this month, we also received the interim report from John Hutton’s public service pension commission. I am sure the whole House will want to thank John for this excellent and independent piece of work. I welcome his findings, and I hope that they will form the basis of a new deal that balances the legitimate expectations of hard-working public servants for a decent income in retirement with the equally legitimate demands of hard-working taxpayers that they do not pay unfairly for it.
The elements of this new pension deal are clear. We should accept that public service pensions continue to provide a form of defined benefit, and that there is no race to the bottom of pension provision. We want public service pensions to be a gold standard. At the same time, we should accept that they must be affordable.
When these public service pension schemes were established in the 1950s, taxpayers made half the contributions. Today they make up two-thirds of contributions, and the unfunded bill is set to rise to £33 billion by 2015-16.
We should accept, as John Hutton does, that there has to be an increase in employee contributions, although I also agree with John that this should be staggered and progressive. That means that the lower paid and those in the Armed Forces are protected and the highest-paid public servants, who get the largest benefits, pay the highest contributions. We will await the full commission report next spring before coming to any conclusions on the exact nature of the defined benefit and progressive contribution rise. We will also launch a consultation on the fair deal policy, but we will carry out, as the interim report suggests, a full public consultation now on the appropriate discount rate used to set contributions to these pensions. From the perspective of filling the hole in the public finances, we will seek changes that deliver an additional £1.8 billion of savings per year in the cost of public service pensions by 2014-15, over and above the plans left to us by the previous Government.
It is also clear that the current final salary pension terms for MPs are not sustainable, and we anticipate that the current scheme will have to end. We will make a further Statement following the publication of Lord Hutton’s findings.
The welfare system is also there to help people of a working age when they lose their job, have a disability, start a family and need help with low pay, but the truth, as everyone knows, is that the welfare system is failing many millions of our fellow citizens. People find themselves trapped in an incomprehensible out-of-work benefit system for their entire lifetimes because it simply does not pay to work. This robs them of their aspirations and opportunities, and it costs the rest of the country a fortune. Welfare spending now accounts for one-third of all public spending. Benefit bills have soared by 45 per cent under the previous Government. In some cases, the benefit bill of a single out-of-work family has amounted to the tax bills of 16 working families put together. This is totally unsustainable and unfair. The previous Government promised reform and flunked it. We will deliver.
My right honourable friend the Work and Pensions Secretary is setting out proposals, with my support, to replace all working-age benefits and tax credits with a single, simple universal credit. The guiding rule will be this: it will always pay to work. Those who get work will be better off than those who do not. It represents the greatest reform to our welfare state for a generation. It will be introduced over the next two Parliaments at a pace that ensures we get this right. I have set aside more than £2 billion over this spending review of resources to make this happens and it will go alongside our new work programme, which we are also funding today. Drawing on the skills of the voluntary sector and private providers, the work programme will provide intensive help to those looking for work and support for those who could look for work but currently lack the confidence or skills to try.
The Department for Work and Pensions will make savings to help to deliver these schemes by increasing the use of digital applications and reducing overheads. We will also be seeking substantial savings from the rest of the £200 billion benefit bill on top of those already identified in the Budget. As I said in June, the more we can save on welfare costs, the more we can continue other, more productive, areas of government spending. In the massive public consultation we conducted over the summer, the overwhelming message we received was that the British people think it is fair to cut welfare bills in order to protect important public services.
So today I announce these further welfare savings. We will time-limit contributory employment and support allowance for those in the work-related activity group to one year. This is double the length of time that applies to contributory jobseeker’s allowance. We will increase the age threshold for the shared-room rate in housing benefit from 25 to 35, so that housing benefit rules reflect the housing expectations of people of a similar age not on benefits. We will give local authorities greater flexibility to manage council tax, together with direct control over council tax benefit, within an overall budget that will be reduced by 10 per cent from April 2013.
We will align the rules for the mobility and care elements of disability living allowance paid to people in residential care, generating savings but enabling us to continue with this important benefit. We will freeze the maximum savings credit award in pension credit for four years, thereby limiting the spread of means-testing up the income distribution.
We will further control the cost of tax credits by freezing the basic and 30-hour elements for three years. We will change the working tax credit eligibility rules so that couples with children must work 24 hours per week between them. We will return the childcare element of the working tax credit to its previous 70 per cent level. We will also introduce a new cap on benefits. No family that does not work will receive more in benefits than the average family that does go out to work. That is a tough, but fair deal. Of course, those in receipt of disability living allowance, working tax credit or the war widow’s pension will be excluded.
Taken together, all these welfare measures I have outlined will save the country £7 billion a year. But we want to ensure that low-income families with children are protected from the adverse effects of these essential savings, because this Government are committed to ending child poverty. I can announce today that I am increasing the child element of the child tax credit by a further £30 in 2011-12 and £50 in 2012-13 above indexation. This will mean annual increases of £180 and then £110 above the level promised by the previous Government. This will provide support to 4 million lower-income families. I can confirm that using the same model as we inherited, the spending review will have no measurable impact on child poverty over the next two years, while we await the conclusions of the report by the right honourable Member for Birkenhead.
Let me now turn to the universal benefits. I have taken the difficult decision to remove child benefit from families with a higher rate taxpayer. I wish that it were otherwise, but I simply cannot ask those earning just £15,000 or £30,000 to go on paying the child benefit of those earning £50,000 or £100,000. The debts of the previous Labour Government, and the need to make sure that the better off in society also make a fair contribution, make this choice unavoidable. It also means that no further changes to child benefit are required. Child benefit will continue to be paid in the normal way to the great majority of the population from birth until a child leaves full-time education at the age of 18 or even 19. We can afford to do this because, according to the latest independent estimates from the Office for Budget Responsibility, removing child benefit from higher rate taxpayers saves Britain £2.5 billion a year.
We will also keep the universal benefits for pensioners, in recognition of the fact many have worked hard and saved all their lives. Free eye tests, free prescription charges, free bus passes, free TV licences for the over-75s and winter fuel payments will remain exactly as budgeted for by the previous Government, as promised. I am also turning the temporary increase in the cold weather payments introduced by the previous Government into a permanent increase. In my view, higher cold weather payments should be for life, not just for elections.
So, too, are the promises we make on the National Health Service. The NHS is an intrinsic part of the fabric of our country. It is the embodiment of a fair society. This coalition Government made a commitment to protect the NHS and increase health spending every year. Today, we honour that commitment in full. Total health spending will rise each year over and above inflation. This year we are spending £104 billion on healthcare, capital and current combined. By the end of four years we will be spending £114 billion. We can afford this in part because of the decisions on welfare that I have just announced and because we have made tough decisions in other parts of the government budget. But to govern is to choose, and we have chosen the NHS.
That does not mean that we are letting the health department off the need to drive forward real reform and savings from waste and inefficiency. Productivity in the health service fell steadily over the past 10 years, and that must not continue. By 2014, we are aiming to save up to £20 billion a year by demanding better value for money. But the money we save will be reinvested in our nation’s healthcare.
As the independent forecasts we published in the Budget show, we need to make these savings to deal with our ageing population and the rising costs of new medical treatments. But there are also new services we can offer. A new cancer drug fund will be provided, spending on health research will be protected and we will prioritise work on the treatment of dementia. We will expand access to psychological therapies for the young, elderly and those with mental illness. We will fund new hospital schemes, including the St Helier, the Royal Oldham and the West Cumberland.
For health spending, as for other spending announcements, there will be consequential allocations for Scotland, Wales and Northern Ireland. The Barnett formula will be applied in the usual way, which means that the increase in health spending and the relative protection of education spending will feed through to the devolved resource budgets. It means that all three nations will actually see cash rises in their budgets, albeit rises below the rate of inflation. For Scotland, the resource budget will rise to £25.4 billion in 2014-15. For Wales, it will rise to £13.5 billion, and for Northern Ireland, it will rise to £9.5 billion. In Scotland, we are proceeding with the implementation of the Calman reforms. In Wales, we will consider with the Assembly Government the proposals in the final Holtham report, consistent with the Calman work being taken forward in Scotland.
In Northern Ireland, the collapse of the Presbyterian Mutual Society has caused great hardship, and people have been left without their money for too long. I can confirm today that we will provide the Northern Ireland Executive with £25 million in cash and a £175 million loan to help those who have lost their life savings.
We will also help those across the United Kingdom who have lost money as a result of the collapse of Equitable Life. For 10 years, the Equitable Life policyholders have fought for justice. For 10 years, the previous Government dithered and delayed and denied them that justice. It is time to right the wrong done to many thousands of people who did the right thing, saved for their future and tried not to depend on the state, and then were the innocent victims of a terrible failure of regulation. So let me make it clear. I accept the findings of the Parliamentary Ombudsman in full. I have read the advice of Sir John Chadwick, and I thank him for it, but I do not agree with the level of compensation his analysis suggested. I agree with the ombudsman that the relative loss suffered is the difference between what policyholders actually received from their policies and what they would have received elsewhere. The Parliamentary Ombudsman herself recognised that a balance had to be struck between being fair to policyholders and fair to taxpayers, particularly when many budgets and benefits are being cut. But money we pay out has to come from general public expenditure. I have decided that the fair amount to pay out in total is in the region of £1.5 billion, two-thirds of which will be found in this spending review period. Those who had with-profits annuities are particularly hard hit, as they were retired and were unable to move their savings elsewhere. As a result, the Government will cover the cost of the total relative loss suffered by these deserving people. The scheme will start making payments next year.
These measures and our welfare reforms mean that it will always pay to work. Benefit savings will help us protect key public services like the NHS. There is help for those who have saved and lost everything. These are fair decisions, consistent with the second principle of this spending review.
The third and final principle centres on growth and promoting a private sector recovery. By restoring macroeconomic stability, we have brought certainty to businesses. By cutting business taxes, we are giving business the freedom to compete. Today’s review builds on these steps because, even when money is short, we should prioritise those areas of public spending which are most likely to support economic growth. That is what we are doing in the Department for Business, Innovation and Skills. Administration will be cut by £400 million. Twenty-four quangos will be cut. Lower-priority programmes like Train to Gain will be abolished. Adult learners and employers will have to contribute more to further education. This means that today I can announce the largest ever financial investment in adult apprenticeships, an increase of more than 50 per cent on the previous Government, helping 75,000 new apprentices a year by the end of the spending review period.
We will maintain and invest in the Post Office network and protect community post offices.
We will come forward with our detailed response to Lord Browne’s report on higher education funding and student finance, including our plans to provide financial support to encourage those from the poorest households to stay in education. Our universities are jewels in our economic crown and it is clear that if we want to keep our place near the top of the world league tables, then we need to reform our system of funding and reject—as, to be fair, many opposite do—the unworkable idea of a pure graduate tax. Clearly, better off graduates will have to pay more, and this will enable us to reduce considerably the contribution that general taxpayers have to make to the education of those who will probably end up earning much more than them.
Overall, average annual savings of 7.1 per cent will be found from the Department for Business budget, the minimum it was asked to find. Within those savings, however, the Secretary of State and I have decided to protect the science budget. Britain is a world leader in scientific research and that is vital to our future economic success. That is why I am proposing that we do not cut the cash going to the science budget. It will be protected at £4.6 billion a year. Building on the Wakeham review of science spending, we have found that within the science budget significant savings of £324 million can be found through efficiency. If these are implemented, then, with this relatively protected settlement, I am confident that our country’s science output can increase over the next four years.
We will also invest £220 million in the UK Centre for Medical Research and Innovation at St Pancras, fund the molecular biology lab in Cambridge, the animal health institute in Pirbright and the diamond synchrotron in Oxford.
Research and technological innovation will also help us with one of the greatest scientific challenges of our time—climate change—and it will support new jobs in low carbon industries. So today, even in these straitened times, we commit public capital funding of up to £1 billion to one of the world’s first commercial scale carbon capture and storage demonstration projects. We will also invest over £200 million in the development of offshore wind technology and manufacturing at port sites.
Yesterday protestors scaled the Treasury urging us to proceed with our idea for a Green Investment Bank. It is the first time anyone has protested in favour of a bank. We will go ahead. I have set aside in this spending review £1 billion of funding for the bank, but I hope much more will be raised from the private sector and the proceeds of future government asset sales. The aim of all these investments is for Britain to be a leader of the new green economy—creating jobs, saving energy costs, reducing carbon emissions.
We will also introduce incentives to help families reduce their bills. We will introduce a funded renewable heat incentive. Our green deal will encourage home energy efficiency at no upfront cost to home owners and allow us to phase out the warm front programme. Overall, the total resource settlement for the Department of Energy and Climate Change will fall by an average 5 per cent a year but there will be a large increase in capital spending, partly to meet unavoidable commitments on nuclear decommissioning.
Defra will deliver resource savings of an average 8 per cent a year, but we will fund a major improvement in our flood defences and coastal erosion management, and that will provide better protection for 145,000 homes.
Britain’s arts, heritage and sport all have enormous value in their own right, but our rich and varied cultural life is also one of our country’s greatest economic assets. The resource budget for the Department for Culture, Media and Sport will come down to £1.1 billion by 2014-15. Administrative costs are also being reduced by 41 per cent; 19 quangos will be abolished or reformed. All of this is being done so we can limit four-year reductions to 15 per cent in core programmes like our national museums, the frontline funding provided to our arts and Sport England’s whole sport plans. We will complete the new world-class building extensions for the Tate Gallery and British Museum in London. The Secretary of State will provide details of further projects shortly. I can also announce today that in order that our nation’s culture and heritage remains available to all, we will continue to fund free entry to museums and galleries. There is ongoing provision of the £9.3 billion of public funding for a safe and successful Olympic and Paralympic Games in London in 2012.
We have also approached the BBC to ensure that it, too, makes its contributions, as a publicly funded organisation, to savings during this spending review. I am pleased to confirm that we have struck a deal this week. The BBC will take from the Government the responsibility for funding the BBC World Service and BBC Monitoring, as well as part-funding S4C. This amounts to some £340 million of savings a year for the Exchequer by 2014-15. To ensure that the cost of these new obligations is not passed on to the licence-fee payer, the BBC has agreed a funding deal for the full duration of its charter review. The licence fee will be frozen for the next six years. This deal helps almost every family and is equivalent to a 16 per cent saving in the BBC budget over the period, similar to the savings in other major cultural institutions.
The BBC has also agreed to reduce its online spend and make no further encroachments into local media markets to protect local newspapers and independent local radio and TV. It will also contribute to the £530 million we will spend over the next four years to bring superfast broadband to rural parts of our country that the private sector will take longer to reach. Pilots will go ahead in the Highlands and Islands, North Yorkshire, Cumbria and Herefordshire. All of this will help encourage the growth of our creative industries as a key part of the new economy we are seeking to build.
After our defence requirements are met, the Department for Transport will receive the largest capital settlement. Over the next four years, we will invest over £30 billion in transport projects—more than was invested during the past four years. £14 billion of that will fund maintenance and investment in our railways. Direct bus subsidies will be reduced, but statutory concessionary fares will remain. The cap on regulated rail fares will rise to RPI plus 3 per cent for the three years from 2012, but that will help this country afford new rolling stock as well as improve passenger conditions.
The Secretary of State will set out how more of the transport money will be allocated next week, but I want to tell the House today about some projects that will go ahead, for let us remember that, even after these tough spending settlements, the country is still going to be spending over £700 billion a year. In Yorkshire and the Humber, capacity on the M62 will be expanded, £90 million will be spent to improve rail platforms across various towns and cities and we will also improve line speeds across the Pennines. In the north-east, £500 million will be spent refurbishing the Tyne and Wear metro and Tees Valley bus network. In the north-west, we will invest in rail electrification between Manchester, Liverpool, Preston and Blackpool, and we will provide funding for a new suspension bridge over the Mersey at Runcorn.
Rail and roads are devolved to the Scottish Executive, as are roads in Wales, but I can tell the House that major rail investments around Cardiff, Barry and Newport will go ahead. In the East Midlands, the M1 and A46 will be improved. In the West Midlands, we will extend the Midland Metro and completely redevelop Birmingham New Street station. In the south-west, we will fund improvements on the M5 and M4, and the new transport scheme for Weymouth. In the east of England, colleagues will be delighted to know that the A11 to Norwich will be upgraded.
Around London, we will widen the M25 between 10 different junctions and complete the improvement to the A3 at Hindhead, while in London, on top of the Olympics, a major investment in our capital city’s transport infrastructure will take place. Crossrail will go ahead and key tube lines will be upgraded for the 21st century. That is nothing like the complete list.
So, yes, we are saving money and putting the state on a more sustainable footing, but even then we will still be spending tens of billions of pounds on Britain’s future infrastructure. Next week we will also set out our national infrastructure plan so that private money is also put to work in building for this country the economic infrastructure that our businesses need. Our regional growth fund will also help us do that. As promised, £1 billion has been found for the fund over the next two years—money designed to lever in private investment in areas of our country where it has been too absent over the past decade. I can announce today that I am providing close to half a billion pounds extra in the third year for the regional growth fund.
Long-term investment in the capacity of our transport, our science and our green energy will all help move Britain from its decade-long dependence on one sector of the economy in one part of the country, and the ruin that that led to.
The most important ingredient that a 21st-century economy needs is well educated children who believe in themselves and aspire to a better life, whatever their background or disadvantages. In June, after the Budget, when the Chief Secretary to the Treasury and I turned our attention to how to allocate spending between government departments, we set ourselves a goal. We wanted to see if it was possible, even when spending was being cut, to find more resources for our schools and for the early-years education of our children. I can tell the House that we have succeeded. It has meant other departments taking bigger cuts, but I believe strongly that this is the right choice for our country’s future.
There will be a real increase in the money for schools, not just next year or the year after, as the previous Government once promised, but for each of the next four years. The schools budget will rise from £35 billion to £39 billion. Even as pupil numbers greatly increase, we will ensure that the cash funding per pupil does not fall. We will also sweep away all the different ways in which money is ring-fenced so that schools can decide how to spend their money as they see best.
We will also introduce a new £2.5 billion pupil premium that supports the education of disadvantaged children and will provide a real incentive for good schools to take pupils from poorer backgrounds. This pupil premium is at the heart of the coalition agreement and at the heart of our commitment to reform, fairness and economic growth.
Parents, teachers and community groups will be supported if they wish to establish free schools. We will fund an increase in places for 16 to 19 year-olds, and raise the participation age to 18 by the end of the Parliament. That enables us to replace education maintenance allowances with more targeted support.
We will also provide support for the early years of our children. The increased entitlement to 15 hours a week of free education for all three and four year-olds, introduced under this Government, will continue. Sure Start services will be protected in cash terms, and the programme will be refocused on its original purpose. We will help them further by introducing for the first time 15 free hours of early education and care for all disadvantaged two year-olds so that these children have a chance in life and are ready, like the rest of their class mates, for school.
Overall, the Department for Education will be required to find resource savings of only 1 per cent a year. Central administration will be cut by one-third and five quangos will go. The capital budget will have to bear its share of the reductions. As the House will know, we have had to phase out the hopelessly inefficient and overcommitted Building Schools for the Future programme, but £15.8 billion will be spent to maintain the school estate and rebuild and refurbish 600 schools.
I repeat: the resource money for schools, the money that goes to the classroom, on the broadest definition, including all the main grants, will go up in real terms every year. It is a real investment in the future of our children and in the future growth in our economy.
Mr Speaker, let me conclude. The decisions we have taken today bring sanity to our public finances and stability to our economy. They deal decisively with the largest budget deficit that this House of Commons has ever had to face outside of wartime. We have had to make choices about the things we support. Today I have announced real increases in the NHS budget and the resources for schools, as well as new investments in the economic infrastructure of our economy. I have also announced real reductions in waste, and reforms to welfare, and through this we will reshape public services to meet the challenges of our times. During the process of this spending review I have received many submissions, including one from the party opposite that the average cut for unprotected departments should be set at 20 per cent over the coming four years rather than the 25 per cent that I anticipated in my June Budget. I have examined this proposal carefully and I have consulted the published documents of my predecessor, the right honourable Member for Edinburgh south-west. Because of our tough but fair decisions to reform welfare and the savings we have made on debt interest, I am pleased to tell the House that it has been possible, and the average saving in departmental budgets will be lower than the previous Government implied in their March Budget. Instead of cuts of 20 per cent, there will be cuts of 19 per cent over four years, so I thank them for their input and look forward to their support.
This coalition Government faced the worst economic inheritance in modern history. The debts that we were left threatened every job and public service in the country, but we have put the national interest first, made the tough choices, protected health, schools and investment in growth, reformed welfare and cut waste, made sure that we are all in this together and taken our country back from the brink of bankruptcy. A stronger Britain starts here. I commend this Statement to the House”.
My Lords, that concludes the Statement.
Lord Eatwell
My Lords, we must all be grateful to the noble Lord for expending the energy to repeat the long Statement that we have just heard. It may have appeared rather dull—a number of noble Lords on the Benches opposite fell asleep—but it is a massive gamble. The Government are gambling the jobs, homes and well-being of hundreds of thousands, perhaps millions, of the British people on the hope—fingers crossed—that this will be a price well worth paying; for, make no mistake about it, that is the bet that the Government are placing. They are staking the misery of thousands, and the serious weakening of major British industries and institutions, on the belief that this gamble will not only restore growth to the British economy but restore it at a greater rate than would have been the case if the economic measures embodied in the March Budget of my right honourable friend Alistair Darling were left in place. Can the Minister tell us how many jobs will be lost in this gamble, including not just the loss of public jobs—we know that that number is 500,000—but of private sector jobs, too? Or will he simply confirm that he does not know the answer to that question?
The key component of this gamble is the hope that private sector growth will step in to fill the jobs and income gap left by the Government’s withdrawal from economic responsibility. That was made clear at the time of the June Budget. As we have heard, the Chancellor made clear in the Statement that the Budget and this Statement have to be taken together to assess effectively the impact on the economy, so I refer to table C3 in the Budget 2010 document. There it is made clear that the contribution of government expenditure to growth over the next four years will be relentlessly negative in every year—it will reduce the growth rate of the economy. It is also made clear that the gap cannot be made up by consumer spending as unemployment rises and standards of living fall, so what are the Government betting on? In the Budget report they forecast that growing business investment will make a contribution to the growth of GDP three times greater than it did in the prosperous years 1999 to 2008. On top of that, the Government say that the contribution of investment in housing will be double that in the good times, and that the contribution of net trade will be positive, whereas it was negative in every year of the earlier period. That is pretty difficult to believe. The National Institute of Economic and Social Research does not believe that. Its July report, Prospects for the UK economy, found that government spending cuts will reduce potential growth below that expected from Alistair Darling’s policies in every year from 2011 to 2015. In updated projections published yesterday, the institute finds that the Government’s policies will result in yet lower growth and consequentially higher deficits than they forecast.
There in a nutshell is the gulf in economic policy between the Conservative Government and this side of the House. Our policy is to support growth and investment in order to cut the deficit; their policy is to cut the deficit, and hope. The House will recall that the Government displayed their gambling instincts in the Budget report by presenting various outcomes for the economy with probabilities attached—those fan diagrams that we heard so much of—but that device seems to have disappeared from Spending Review 2010. If we look at the probabilities that the Government put forward, the Chancellor argues in the Budget Statement that there is a 30 per cent probability, a one-in-three chance, that growth in 2015 will be zero. Given that the Government admit that such outcomes are not just possible but likely—a one-in-three chance—will the Minister confirm, as Mr Osborne stated at the weekend, that,
“we have to see this through, and the course which I set in the Budget is the one that we have to stick to”.
In other words, even though his own published statements recognise that his policy might be a disastrous failure, he will not change it. If the bet does not pay off and even more people are ruined than he currently contemplates, there will be no change of policy. There is no plan B.
This is being done, we are told, because the country is bankrupt and expenditure cuts are necessary to survive the “sovereign debt storm”. Will the Minister confirm that interest rates payable on UK debt fell throughout the “sovereign debt storm”, both before and after in-year spending cuts? Not only was the UK’s financial standing never at risk, sterling has become a safe-haven currency during eurozone difficulties. The truth is that the scale of today’s cuts has nothing to do with the overall fiscal position. The truth was revealed by the noble Lord, Lord Sassoon, in the Finance Bill debate in this House on 26 July this year. He said:
“we cannot afford a public sector of the size to which it had grown”.—[Official Report, 26/7/10; col. 1220.]
He also stated that there must be,
“a complete re-evaluation of the Government's role in providing public services”.—[Official Report, 26/7/10; col. 1217.]
That is what this spending review is all about. It is about an ideological commitment to cut the size of the public sector, and I give the noble Lord credit for being so honest to admit it.
Before turning to the scale of the cuts, I would be grateful if the noble Lord would help me with a rhetorical device that the Chancellor uses in his Statement. Whenever a spending increase is announced, it is announced in terms of a sum of money and, as is the way with these things when millions or billions of pounds are involved, it all sounds very impressive. However, when cuts are announced, they are announced as percentages—4 per cent here, 6 per cent there—so that they do not sound quite so bad. Will the noble Lord tell the House what a 7.1 per cent annual reduction in funding for local councils means in money terms? What do the 24 per cent cuts in the budgets of the Home Office and the Ministry of Justice actually mean in money terms? What do they mean in terms of access to justice and prompt justice for all? How much money is being taken from the Department for Business, Innovation and Skills in annual cuts? We are told not the actual figure but that there will be a reduction of 7.1 per cent a year—say, 30 per cent over the period of the review—in the budget of the department that is supposed to support growth and innovation in this country.
Turning to higher education, I declare an interest as a university teaching officer. I am sure that all sides will welcome the commitment to protect the science research budget in money terms, although the real value will inevitably be eroded by inflation. Will the noble Lord tell the House what is happening to the teaching budget in science and engineering? What will happen to the research and teaching budgets in the arts and humanities? As for the future of the planet, what is the money value of the 20 per cent-plus cut in the Department of Energy and Climate Change budget and of the 35 per cent cut in Defra funding? The Minister should not be shy and hide behind percentages but tell us the numbers.
The most important number is the figure for cuts in the welfare budget, because the Government have committed an intriguing sleight of hand. Some departmental budgets have been cut by less than was expected. The noble Lord was delighted to make fun of the Opposition when he referred to only 19 per cent cuts in departmental budgets. Some sweeteners have been added, too. How have those been paid for? They have been achieved by cutting the welfare budget. A complex series of changes was announced in the Statement. Have the Government made an impact assessment of the changes, many of which will impact on Britain's poorest and most vulnerable families? Will the Minister tell the House the overall money value of the cuts in welfare spending, and will he confirm that more is being cut from welfare spending than from all the departmental budgets added together?
All independent assessments have found that the Government's measures will reduce growth over the next five years. That reduced growth will reduce the real income of future generations. That is the real burden that this Government are imposing on our children. The burden will fall immediately on the next generation, including the 15 to 25 year-olds who are desperately looking for a job or a university place or just a chance.
Of course, the gamble may come off, and we all pray that it will. But should it not, this irresponsible approach to dealing with the aftermath of the international financial crisis will impose a loss of real income on generations to come. Today and in the future, Britain will be paying the price of this Government’s gamble.
Lord Sassoon
My Lords, for the Opposition to describe as a gamble all that we have done in a radical spending review seems incredible. Whey they were in government, they put more and more money on the table, doubled their bets and got credit until the music stopped. We were then left with the largest budget deficit in peacetime history. Now they have the gall to come here and say that what we are doing to put order back into the public finances is a gamble. It was absolutely unavoidable that we had to clear up the mess that we were left with. The overwhelming probability, in the commentaries that have continued to be published since the Budget, is that the plan will deliver what my right honourable friend the Chancellor said it would deliver.
The noble Lord talked about unemployment. As I have made clear, the independent estimates of the Office for Budget Responsibility forecast a reduction over four years of 490,000 employees in the public sector. However, the same OBR forecast done at the time of the Budget said that, in every year of the forecast period, total employment in the country would rise and unemployment would go down. To put that into perspective, it is worth remembering that in the last consolidation of national finances in the wake of the recession of the early 1990s, between 1992 and 1997, 690,000 jobs were cut from the government workforce, but they were more than absorbed by the increase of 1.7 million in private sector jobs. That has been done before under a Conservative Government and will be done again.
I begin to feel my age in this House when my old speeches are read back to me. It is very good and useful that the noble Lord reminds us of exactly what we said we would do and have done, which is to combine the necessary retrenchment with radical reform of how the public sector goes about its business. The combination of saving hard-working taxpayers their money with introducing radical reform is nowhere better demonstrated than in the welfare arena. The move over two Parliaments to a universal credit system is the most radical change in welfare for many decades. The noble Lord asked me who would pay for that change and all the other changes. The tables are all there at the back of the document explaining that the top quintile of the population will bear the largest share of the burden. There the noble Lord will find tables and analysis, which the previous Government did not care to show the nation in any spending review. However, I repeat that those who can afford to bear the greatest burden will pay for the change.
I am grateful to the noble Lord for his slightly back-handed compliments on science, although I will take them as well meant. He clearly appreciates that the effort we have made on investment in science and wider infrastructure is absolutely critical to the medium-term growth of the economy. That is why we have maintained the science base in cash terms. I do not know whether, out of the science expenditure, we can provide calculators to noble Lords so that they can make calculations from percentages to money terms and so on, but perhaps that is something that those looking at procedures can look at.
The question on social housing gives me an opportunity to draw attention to how we can deliver so much more if we apply decent disciplines to public expenditure. We will deliver 150,000 new units of social housing in the next four years at a cost of £4.4 billion. In the previous four years, the previous Government built 170,000 new homes at a cost of £11 billion—another indication of the sort of waste that is of the past.
Coming back to the big questions of growth, which are absolutely critical, I know that the OBR, international forecasters and forecasters from the City are all forecasting continued growth this year, sustained and rising for the next few years. In the second quarter of this year, we had growth of 1.2 per cent and we had new jobs created in the first quarter—
Lord Sassoon
Thanks to the stabilisation of the economy and the confidence that came with the new Government, we had second-quarter growth of 1.2 per cent and more than 300,000 new jobs.
Lastly, whose policies are these and where is the endorsement coming from? The noble Lord talked about the interest bill, so perhaps I may put it to him this way. The day before the election, the Government of the United Kingdom were paying 96 basis points more than the German Government for 10-year money. That was the increment that we had to pay over what Germany was paying. As of the moment that the Chancellor sat down this afternoon, those 96 basis points had reduced to 56. That represents a saving on a daily basis of millions of pounds that eats into the £120 million daily bill of interest that the previous Government left us with.
Lord Howe of Aberavon
My Lords, I have to confess an interest in this subject, although it is rather a reminiscent one. As I listened to the noble Lord, Lord Eatwell, my mind went back about 30 years to when I introduced my third Budget to deal with the economic legacy of the Labour Government whom we had displaced. Today, the noble Lord, Lord Eatwell, has not begun to offer anything by way of alternative policy that can be considered by the Chancellor of the Exchequer. I wonder whether he was one of the 364 economists who wrote to the Times after my Budget to say that everything that we were proposing was wholly wrong, without offering any alternative. I know that the noble Lord, Lord Peston, who is not in his place, was one of the leading signature seekers in that exercise. This is not just a frivolous point. They were no doubt sincere in their enunciation but, almost on the day following that and for the next eight years, we had steady, sustained economic growth, inflation came down from the huge figure that we had inherited from the preceding Labour Government and, in the end, unemployment also began to come down.
It is worth reflecting on those points. The central defect with which the Government are grappling is comparable. The Government are borrowing £1 pound for every £4 that they spend and the rate of interest that they are paying is costing £120 million a day more than would otherwise be the case. There is no doubt whatever about the necessity of a comprehensive spending review. No one has challenged that. The review has been undertaken with a wide range of sophisticated skills. It has addressed not simply that central problem but a wide range of other policy questions—almost the complete government programme.
Lord Howe of Aberavon
My Lords, my question is: will it not remain essential for months and indeed years ahead to have a similar economic discipline to that being imposed so far in this comprehensive spending review? Also, given the many features with which the Chancellor has dealt today, is not this review absolutely inescapable? It is not merely a comprehensive spending review but a continuous spending review, to which the party opposite has offered no alternative policy but in which the policy of the Government has been clearly set out comprehensively and with courage.
Lord Sassoon
My Lords, I am grateful to my noble and learned friend Lord Howe of Aberavon for reminding us of the confidence that we can have in the tough decisions that this Government have taken. He was the architect of a similarly bold, tough and successful consolidation of the public finances in the early 1980s. This is indeed an important lesson for us. I agree with him that this must be driven through in the way in which he describes. He points out that the Opposition have provided no alternative policies, but it is worse than that: I understand that, when listening to my right honourable friend’s Statement in the Chamber, the shadow Chancellor sent out an e-mail in his name—I do not know how he did it—asking the public or whomever he was e-mailing for any ideas so that the Opposition could formulate an alternative policy. We look forward to hearing the outcome.
Lord Sewel
My Lords, I have a specific question for the Minister. Will he answer the question that my noble friend Lord Eatwell asked and turn the percentages into numbers, particularly the contribution to be made by the welfare budget? When my noble friend asked that question, I noticed that there was some scribbling going on in the Box and a note appeared shortly afterwards. Perhaps the Minister could share that note with us.
Lord Sassoon
My Lords, I could sit here for a long time, get out my calculator and work these things out. All the numbers are set out in the book; there still seemed to be copies in the Printed Paper Office when I came into the Chamber. There are probably more important things to be talking about now.
The Lord Bishop of Blackburn
My Lords, very many of us are eager to see the big society, with its vision of neighbourliness, prevail. Neighbourliness requires a particular care for children, who are a gift and not a commodity, and for poorer families. Given that many children and poorer families will be badly affected by the reduction in benefits, can the Minister tell us where this lost support may be found in the future for children and poorer families?
Lord Sassoon
My Lords, I am grateful to the right reverend Prelate for drawing our attention to the question of children, which I shall come back to. In respect of his question about poorer families, I draw the House’s attention to the new section at the back of the document, which for the first time lays out the effect on the deciles and quintiles of the population of all the measures that we have taken in the spending review and the Budget. It confirms the fairness of the overall construct—namely, that those who can afford to pay more will do so and that the poorest in society are protected.
The spending review will provide additional support to the most disadvantaged children at every stage, particularly in education, and will support social mobility. As I said when repeating the Statement, free early years education will be extended to 15 hours and care will be given to the most disadvantaged two year-olds. Critically, we will introduce a £2.5 billion pupil premium. There will be more generous maintenance provision and a scholarship fund of £150 million to underpin higher education funding for disadvantaged children. The entire spending review has taken fully into account the needs of children, particularly in education. The coalition Government have taken action to protect families. Overall, there is no measurable impact on child poverty from all the model changes for the next two years.
Lord Bilimoria
My Lords, the Minister has confirmed that public expenditure will go up in actual terms. Historically, 40 per cent was deemed to be the sensible level of public spending expressed as a percentage of GDP and a sensible balance between the private sector and the public sector. Is the Government’s aim to get back to that 40 per cent figure on a regular basis? In this environment, one would need to do that anyway regardless of the budget deficit. In that sense, I welcome the reductions in the welfare budget, which were badly overdue. Although spending on the National Health Service has been ring-fenced, the efficiency savings there are also very welcome and I think that the whole public would agree with them. However, in the coalition Government’s spirit of the transparency, the Chief Secretary revealed to us yesterday that 500,000 jobs would be lost in the public sector, a figure that the Minister has confirmed today. How confident are the Government of those jobs being replaced in the private sector? How confident are they that they have done enough to stimulate growth in the private sector, particularly against a backdrop of increased capital gains tax and higher rates of tax in every area? How difficult will it be?
Lord Sassoon
My Lords, I am grateful to the noble Lord, Lord Bilimoria, for drawing our attention to the important question of the balance between the public and the private sectors, which had got completely out of kilter under the previous Government. I repeat that this is not just an exercise in cutting back expenditure, necessary and unavoidable though that is; it also entails a critical rebalancing of the public and the private parts of the economy. What we have announced today will take the public sector part of the economy back towards that 40 per cent figure. In answer to the question about the absorption of the inevitable job losses in the public sector, I draw the noble Lord’s attention to the fact that, in the past quarter alone, the private sector generated 178,000 new jobs. That was in one quarter, so we should be confident, when the Office for Budget Responsibility believes that overall employment in the economy will rise year by year, that that indeed will be the case and that the inevitable reduction in public sector jobs will be more than absorbed.
Lord Newby
My Lords, a lot of attention has rightly been paid to the effect that the Statement will have on public sector employment. Will the Treasury urge all departments to examine a range of measures, such as part-time working and a complete freeze on bonuses and increments, all of which have already been widely adopted in the private sector and would have the effect of reducing to a minimum the number of public sector job losses?
Lord Sassoon
I thank my noble friend Lord Newby for drawing attention to the fact that departments will be encouraged to take the maximum opportunity of flexibility in pay and other conditions in the way that he described to mitigate the effects of the inevitable job reductions in the public sector. We will also be introducing a number of other measures to mitigate those job losses, which of course we very much regret. For example, we are introducing the regional growth fund and there is the protection that comes with the wider pension reforms. With assistance from Jobcentre Plus, there will be a further range of measures to mitigate the effects of the job losses in the public sector.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
My Lords, we have agreed to extra time for this Statement, but perhaps we should, as a matter of courtesy, give priority to those noble Lords who sat through the reading of the Statement, rather than those wandering in five minutes before the end.
Lord Davies of Stamford
I take it that the Government themselves acknowledge that the recovery is fragile and that, by reducing planned public expenditure and increasing taxes so drastically—the Statement rather skated over the taxes aspect—thereby taking demand out of the economy, they are taking some risk, at the very least, with that fragile recovery. In that context, was it sensible to announce the reduction of public sector jobs by 490,000 before publishing the detailed departmental plans from which, presumably, that figure was derived? As a result, not merely the holders of the 490,000 jobs but the whole public sector—millions of people and their families—will be deeply anxious about their future and will be reducing, perhaps drastically, household expenditure. That will take more demand out of the economy quite unnecessarily in a context where we require the reverse of that.
Lord Sassoon
My Lords, I think that what the country has really been worried about is how the Government would deal with this horrendous deficit problem. What underpins the prospects for renewed, sustained growth is that we have reduced the deficit as a necessary precondition and that we have done so in such a way that the markets are convinced that we are serious about it. The latest official data show that GDP grew strongly, by 1.2 per cent, in the second quarter. It is the substantial accumulation and growth of government debt that risks that ongoing recovery and that is what we have dealt with.
Lord Higgins
My Lords, one thing is absolutely clear, which is that Mr Gordon Brown inherited the most favourable economic situation of any Chancellor since the war and left behind an enormous problem for the coalition to deal with. However, as anyone who has had experience of this sort of exercise will know, it is remarkable that the Treasury, officials and Ministers have managed to produce such a comprehensive review in such a short time, dealing with everything from Equitable Life to coastal erosion to measures overseas to deal with malaria and so on. What is being overlooked is that the Statement mentions not only cuts but a number of increases in public expenditure. It is really, apart from dealing with the deficit, a reappraisal of the priorities that we ought to have. From that point of view, it does exactly the right thing. Indeed, there is no cut. Public expenditure, as I understand it, is to go up from £651 billion to £693 billion. That is scarcely a cut by any standard. That is the kind of number that the noble Lord on the Front Bench was asking for.
May I put this question to my noble friend? It is difficult to ascertain from the Statement what the effect will be on aggregate demand. Will it reduce aggregate demand in the economy or will it increase it? If it is going to increase it, clearly the Bank of England will need to take that into account. If it is going to reduce it, it is important that action should be taken to offset the cuts that are being made by quantitative easing or whatever may seem appropriate. Could the noble Lord tell us: is this something that increases or decreases aggregate demand?
Lord Sassoon
My Lords, I am grateful to my noble friend Lord Higgins. I will relay to my right honourable friend the Chancellor and to all the very hard-working officials in the Treasury his generous words, which confirm that this is indeed a radical, fair and comprehensive spending review. In answer to his question about demand, clearly, with the independent projections from the Office for Budget Responsibility and all the other commentators of consistent growth going forward, demand will indeed increase. The question of what role the aggregate increase in the money supply plays is one on which, as we know, the Governor of the Bank of England continues to be very much focused as he leads on the conduct of monetary policy.
Baroness Hollis of Heigham
My Lords, the devil is in the detail, as has been said before. The Statement says that pension savings credit will be frozen for four years, saving in total—on page 11 of the Red Book—£1 billion from pensioners. The state pension will rise with earnings, so that pensioners not in need of pension credit will be better off, which is good, but poorer pensioners dependent on pension savings credit will find that the income and the increase in state pension will be offset by the freeze in the savings guarantee and they will be worse off. Better-off pensioners will be better off, while poorer pensioners will be worse off. Is that fair?
Lord Sassoon
I understand that the amount affected by the freezing of the credit approximates to £1.50. I think that it is important to consider this in the context of everything else that we have done for pensioners and elderly people in this spending review—
Lord Sassoon
We need to look at it in the overall context of what the Government have done for elderly people, because this is important. The critical decision is that the Government, as announced before, will meet their commitment to uprate the basic state pension by whichever is the highest—earnings, prices or 2.5 per cent—from April 2011, as well as preserving other key pensioner benefits, which people have questioned, including the winter fuel payments, the free TV licences, the bus travel, the eye tests and the prescriptions. I am grateful for the question on the detail but I think that it gives me the opportunity to emphasise the overall deal for pensioners, which we think is important in this spending review.
Lord Forsyth of Drumlean
I congratulate my noble friend and the Chancellor on the excellent Statement, which shows great courage as well as great care in taking forward the mess that we inherited from the previous Government. The previous occupier of his office—the noble Lord, Lord Myners—was almost certainly correct when he assured this House that we would end up making a profit and getting our money back from the bank bailouts. Given that, should we not make it absolutely clear to the country that we have had to take these measures, which Members opposite are complaining about, because for years Mr Gordon Brown as Chancellor and Prime Minister made this country live beyond its means and was borrowing at the height of the boom; and that, despite these measures, our debt as a nation will increase? Could my noble friend tell me how much our national debt will have increased by, despite these measures, by the end of this Parliament? Given that number, how on earth can we take seriously Members opposite who are criticising what is a responsible programme from my noble friends and from our coalition partners?
Lord Sassoon
My Lords, I think I would probably faint at this moment if I even mentioned the debt number. The critical thing is that the debt will peak and we will bring it down, as we said we would, within this spending review. I am grateful to my noble friend for stressing that it has indeed been a courageous and careful exercise that is enabling us to make sure that the debt tops out and starts to come down within the spending review period. He reminds us that a twin failure of the previous Government caused the mess that we are in: first, as my noble friend points out, the great increase in public expenditure that we could not afford; and, secondly, the complete failure to regulate our banking system properly, which caused the whole house of cards to come down. I can give my noble friend the numbers on the public sector net debt, which will go up from 53.5 per cent of GDP in 2009-10 to a staggering 70.3 per cent in 2013-14 before we bring it down to 69.4 and 67.4 per cent by 2015-16 thanks to the measures that this Government have announced today.
Lord Stoddart of Swindon
Yes, he is; he is an independent Labour Cross-Bencher. The Government have ring-fenced health and overseas aid. Is there not another item that has been ring-fenced? It is our net contribution to the European Union, which is £6.7 billion this year. Would the Minister agree that if that were reduced by 20 per cent, it would enable 55,000 more nurses, policemen or teachers to be employed? Should our country not come first rather than subsidising other countries?
Lord Sassoon
I thank the noble Lord, Lord Stoddart, for a question that reminds us that we are working extremely hard as a nation to live within our means. It is equally important that within Europe the European Union also lives within its means. The Government will be doing everything they can to make sure that proper financial discipline is applied to the European budget this year and for the next spending period. I do not know, but I have a sense—I might like to ask on the subject—that the Labour Members of the European Parliament were today voting to allow the European Union to have its own tax-raising powers to fund a separate pot of money. The present Government want to see proper discipline applied to European Union expenditure.
Lord Touhig
My Lords, the noble Lord said that fairness is important to his Budget. He went on to say that a civilised society protected the most vulnerable. Yet in 21st-century Britain 30 per cent of disabled people live below the poverty line. What specific measures are proposed in this spending review to reverse that and to give some fairness and justice to the most vulnerable in our society?
Lord Sassoon
My Lords, as I have reiterated, at the absolute centre of this spending review is the universal credit, which, over the next two Parliaments as we bring it in, will go to the heart of the challenge the noble Lord poses. As to the provision for disabled people, people with long-term conditions account for around 70 per cent of the NHS budget, which is the area of spending being protected above all others.
People with disabilities and social care needs will also benefit from the additional resources given to social care within the health and local government budgets. People with care needs are also being protected from the extension of the single-room rate in the housing benefits. Finally, of the measures to which I should draw the attention of the House, families where someone claims a disability living allowance will be exempt from the new cap on total household welfare payments. Care for disabled people is absolutely at the heart of this review.
Baroness Noakes
My Lords, my noble friend was accused by the noble Lord, Lord Eatwell, of ideology in pursuing the excellent programme that he set out in the Statement. Will he confirm that it is necessity and not ideology that has driven today? Will he further confirm that we inherited the largest deficit in the G20 and an economy where public sector productivity had gone backwards for most of the previous 13 years? We found budgets, such as defence, which were overcommitted to an extent more than the annual budget. Will my noble friend confirm that we are committed to restoring efficiency and effectiveness to public spending, which are principles that eluded the Benches opposite for the previous 13 years?
Lord Sassoon
I am happy to confirm the very succinct summary put forward by my noble friend Lady Noakes of what is at the heart of this spending review. Effectiveness and fairness are what we are aiming at.
Lord Kilclooney
My Lords, it is only right to say thank you. Northern Ireland, historically and geographically, has been very closely associated with Scotland. As a result, the Presbyterian Church in Northern Ireland is the largest Protestant communion in that province. The problems of the Presbyterian Mutual Society have been a running sore for several years. Will the Minister take note that there will be widespread appreciation across Northern Ireland that this problem has finally been addressed in the Statement?
Lord Sassoon
I am very grateful to the noble Lord for drawing attention to the fact that the Presbyterian Mutual Society has been a long-running issue which was not gripped by the previous Government. Whether it is that or properly compensating the policyholders of Equitable Life, we have got on and made what we believe to be fair decisions which were dodged by the previous Government.
Lord Winston
My Lords, would the Minister be kind enough to answer my noble friend Lord Eatwell’s question about universities? Does he agree that the Browne review can in no way cover the costs of teaching, which we need, in the universities which contribute so much to our economy beyond the STEM subjects and so much to our civilised society?
Lord Sassoon
I am very happy to endorse absolutely that sentiment of how critical it is to support the finest universities in the world, which stand up with the universities of the US at the top of all the league tables. While we preserve critical elements of science spending, there needs to be a fundamental rebalancing—that is exactly what the noble Lord, Lord Browne, proposed in his report—between what the state can afford to pay and the contributions paid by those who benefited from a university education. That is what we are proposing.
Political Parties, Elections and Referendums (Civil Sanctions) Order 2010
(13 years, 6 months ago)
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Lord McNally
That the draft order laid before the House on 8 April be approved.
Relevant Document: First Report from the Joint Committee on Statutory Instruments.
The Minister of State, Ministry of Justice (Lord McNally)
My Lords, this order, which is to be made under Schedule 19C to the Political Parties, Elections and Referendums Act 2000, as amended by the Political Parties and Elections Act 2009, permits the Electoral Commission to impose civil sanctions for breaches of the party funding regime established by the 2000 Act. The Committee on Standards in Public Life conducted a review of the Electoral Commission in 2007. It found that currently:
“The only sanction that the Electoral Commission has if the parties do not comply with legislation is to name or shame or, if the offence is sufficiently serious, it can refer it to the Crown Prosecution Service for criminal prosecution”.
The committee recommended a new system of penalties to enforce the regulatory framework set out in the 2000 Act. The 2009 Act was intended to tighten the controls on spending by political parties and candidates, and part of that process was to strengthen the regulatory role of the Electoral Commission. As such, that Act gave the Electoral Commission new powers to investigate potential breaches of party funding law itself rather than have to refer most things of any potential seriousness to the police and to apply a range of civil sanctions as an alternative to criminal prosecutions. We are keen to fulfil this commitment, one that was made by the previous Government.
Following Royal Assent to the 2009 Act, the Electoral Commission initiated a consultation on its proposed enforcement policy. The responses to the consultation and the commission’s resulting recommendations were considered by the Government during the development of the order, alongside the valuable technical advice which was received from the Electoral Commission itself. The 2009 Act inserted into the 2000 Act the key principles behind the powers to impose civil sanctions, including the type of civil sanctions that will be available to the commission, broadly how they will operate and the right of notice prior to the imposition of sanctions, and appeal to the county court or sheriff thereafter. The powers closely mirror those set out in the Regulatory Enforcement and Sanctions Act 2008, which established a sanctions framework for analogous regulators.
It is important to make it clear that these new powers are intended to supplement, and not to replace, the existing ability of the police to investigate an offence, and the Crown Prosecution Service to bring a criminal prosecution. Part 1 of Schedule 2 to the order specifies those offences that will be capable of attracting either criminal or civil sanctions depending on what the commission, the police and the CPS think is the right approach in each case. An individual cannot be proceeded against for the same wrong by the civil and criminal routes. Part 2 specifies these restrictions and requirements that will be capable of attracting only civil sanctions.
Part 3 ensures the continuation of provisions which are currently set out in Section 147 of the 2000 Act and which will be removed from the Act when the new powers are commenced. These provisions enable the commission to impose a sanction on an organisation for the act of one of its officers for a limited range of transgressions. The list set out in Part 3 reflects the list currently set out in Section 147 of the 2000 Act with the addition of Section 41(1), failure to keep accounts, and Sections 41(4) and (5), failure to maintain accounts for six years.
By contrast, those offences in the 2000 Act which are not included in Schedule 2 to the order will remain subject only to criminal sanctions. Examples of such offences are in Section 61(2), knowingly giving false information to a party treasurer, or withholding information with intent to deceive, as set in Section 148(1), or altering, suppressing, concealing or destroying, or permitting the same, of documents relating to the financial affairs of a supervised organisation or individuals.
Lord Martin of Springburn
My Lords, I rise not to oppose but to ask questions on this matter. My experience of the Electoral Commission—although this may have changed—was that people were not allowed to become commissioners if they had been agents or senior officials of parties in the previous 10 years. This meant that we were denied the expertise of retired party agents from the main political parties, and even minority parties. When the commissioners were meeting, it therefore meant that when any ideas came up and those around the table were, perhaps, executives or previous executives of local authorities, they never had the background to know what happened at grass-roots level when political parties were seeking the support of the electorate. They did not have experience of putting leaflets through doors, going into housing estates or, sometimes, even of speaking to electors. I would hope that this matter has been resolved. It would be excellent if the Electoral Commission was able to get commissioners who were previously national or assistant national agents of political parties.
Sometimes in political parties, volunteers are required to take office. Sometimes, on a cold winter night, it is not so much a volunteer but a conscript who becomes the party treasurer or some other officeholder. If a political organisation got into difficulty, it would be very sad if an officeholder, having taken office in good faith while expecting the support of others, made a mistake through inexperience and was charged in any way as being a wrongdoer. Can the Minister help me on that?
It should be borne in mind that the Electoral Commission is in many ways an inexperienced organisation because, as noble Lords might remember, there was a shambles in the Scottish parliamentary elections because of electronic voting. Since the Electoral Commission participated in that new voting system, there was a requirement to bring in an adviser from Canada to investigate the matter, because there would have been a conflict of interest in the commission being involved in it.
Lord Tyler
My Lords, I can take my text now from the noble Lord, Lord Martin of Springburn, because I have been an active member at every sort of division of party activity for over 50 years. I want to take this opportunity to ask the House to think a bit about the volunteers who make our democracy happen. These are the people who, through all the circumstances that the noble Lord referred to, make it possible for democracy to be effective in this country. These people seldom end up on green or red Benches. They are rarely quoted in the newspapers or on television, but they are the essential manpower and womanpower for running our democracy.
During the passage of the Political Parties and Elections Act 2009, to which my noble friend has referred, all three major parties made this point. As the Minister responsible, Mr Michael Wills—as he then was—said,
“we must also address legitimate concerns about the burden of reporting relatively small donations in the context of the public's interest in bigger political donations ... we must never forget that political activity in this country is largely carried out by volunteers—selfless people who give their time and effort to political parties across the House. Without them, none of us could function effectively in representing our constituents”.—[Official Report, Commons, 2/3/09; col. 590.]
Mr Jonathan Djanogly, the then Conservative spokesman, agreed. He said:
“I stress that we should be encouraging engagement at the grass-roots level of politics ... I am sure that all hon. Members will be aware that the voluntary levels of party structures and local fundraising are normally entirely divorced from the more complex upper echelons of party funding”.—[Official Report, Commons, 2/3/09; col. 605.]
My honourable friends in that House and my noble friends and I in this House made similar points throughout the discussions on that Bill, as the noble Lord who was then in charge of the Bill will confirm.
Schedule 2 to this order, as my noble friend has pointed out, sets out 69 offences that already exist under the Political Parties, Elections and Referendums Act. These are 69 ways in which local parties or associations and their officers—volunteers, in the main—can fall foul of the law. In principle, creating the possibility that these offences can, at least in the first instance, be removed from the sphere of criminality by bringing in civil sanctions instead is welcome, and I acknowledge precisely that point, which was made by my noble friend.
The Explanatory Notes make clear, however, that the criminal offences will remain. It is not a question of all those criminal offences being removed; it is simply that they will not necessarily be there at first instance. People will continue to be prosecuted in the criminal courts where there is evidence that they have acted knowingly or recklessly. Almost by definition, therefore, the new civil sanctions will apply to people who have made any of the 69 mistakes. Five more transgressions are also added to the list. These are the sort of non-offences that will not be susceptible to criminal prosecution but will be open to the civil sanctions that my noble friend has described.
I am sure that no one in your Lordships’ House doubts the importance of probity, accuracy and good record-keeping if we are to have a transparent system of political donations and campaign expenditure. However, we have to make sure, as the noble Lord has just said, that we do not set up an impossible task for those volunteers at local level—for example, the party chair who approaches an activist and says, “I’d really like you to stand to be the honorary treasurer of the St Albans Liberal Democrats. It’s not much work, you don’t have to worry; you won’t have any legal responsibilities and you’d really be very good at it”. I suspect that many of us in our time have asked people to do precisely that sort of job. Those putative officeholders whom we might try to cajole in future might look at the order that we are discussing today and think twice.
I hope that my noble friend can provide reassurances on two points. First, what de minimis provision is planned so that volunteers and their local parties are not penalised for small, innocent mistakes? My noble friend may say that of course the Electoral Commission will acknowledge when there is a genuine mistake and it will give advice, guidance and so on—I have worked with the Electoral Commission and I have great respect for its activities—but it is one thing to say that; it is not so easy to do it.
Secondly, is this order simply a small, interim step on the way to the full-scale reform of all the corruptive influence of the present situation that we face regarding party funding? Our worry on these Benches should not be about whether a treasurer in the Much-Puddle-Under-Ditchwater constituency Labour Party, the Nether Wallop Conservative association, or even the St Albans Liberal Democrats has notified or failed to notify the Electoral Commission of his or her change of address. That is the sort of issue that is addressed by this order, but it is not the big issue that we should be addressing. Instead, surely, the target should be the offshore bankrolling of political parties and the inexorable arms race in campaign spending. So I ask my noble friend when the Government will return to the much more urgent issue of the potentially corruptive influence of so-called big money in our political system. I am sure that my noble friend will recall that the coalition agreement stated:
“We will … pursue a detailed agreement on limiting donations and reforming party funding in order to remove big money from politics”.
A useful report has come out this week, Funding Political Parties in Great Britain: A Pathway to Reform by Democratic Audit, which explains the issues that we should be addressing with regard to the problems in our democratic system. Noble Lords will recall that the cross-party discussions under Sir Hayden Phillips came close to agreement on capping donations, a lower cap on national expenditure in elections, a cap on all party expenditure during each Parliament and—an important suggestion—the opportunity for political donations to be given the same tax concessions as charitable donations. That last could be introduced without any explicit increase in the already substantial state funding of our political parties and democratic system, of which the Labour Party is now the main beneficiary.
Lord Bach
My Lords, I shall be fairly brief but I cannot resist commenting that it is slightly ironic that we should be debating this matter on the afternoon when staff in the Ministry of Justice—whether front-line staff or those who work in the main office—are being decimated by a Statement made in another place. The staff who produced this order and the Bill, which became the Act, are the ones who will have to suffer. It seems to me ironic that we should discuss such a good order on the very day when they are to be decimated as a result of government policy.
I thank the Minister for outlining so clearly and in such detail the statutory instrument that we are being asked to approve. We support the order, which is hardly surprising as it flows from two Acts of Parliament introduced by the previous Government. As we have heard, the civil sanctions were introduced by the Regulatory Enforcement and Sanctions Act 2008, and these regulations flow from the Political Parties and Elections Act 2009. As it happens, I played a small part in taking both those Bills through this House, so I am interested in the order which flows from those Acts.
The use of civil sanctions was not approved without controversy in this House when it considered the Bill. Their use, as opposed to criminal proceedings, is a flexible, sensible and proportionate step for many of the offences—for that is what they are—committed under the 2000 and 2009 Acts. As has already been said, criminal proceedings are appropriate and necessary in cases where a person has acted in a knowing or reckless way, but I hope that those cases are rare.
I say this with perhaps more feeling than some. I share the view of the noble Lord, Lord Tyler, on this and, no doubt, that of the noble Lord, Lord Martin. I was a constituency Labour Party treasurer for many years and now, for my sins, I am a chairman of a constituency Labour Party.
Lord Bach
I am very grateful to the House for that acknowledgement. Both as treasurer and chairman I could be affected by the legislation that is now on the statute book.
I congratulate the Electoral Commission on the note it sent to noble Lords on this order, but I invite it to use its considerable powers—and they are considerable, as has been pointed out in the debate—with care, tolerance and humanity, bearing in mind the voluntary nature of so much political activity in this country. We support the order.
Lord McNally
My Lords, I shall reply briefly to this debate. I am sure that we are all impressed by the climb of the noble Lord, Lord Bach, from treasurer to party chairman. Disraeli called that climbing the greasy pole.
I shall also respond briefly to the noble Lord’s point about the Ministry of Justice. Twelve years ago, I served on an inquiry, initiated by this House and chaired by the late Lord Slynn, into whether the ethos of public service was still alive and well in our Civil Service after the changes that had taken place in the 1980s and 1990s. Our report stated that yes, it really was alive and well—people in our public service were motivated by a sense of public duty and public service. Since returning into government five months ago, my experience has been such that I would not change a word of that report. I have been much moved and impressed by the dedication of the public servants with whom I have worked at all levels. I am well aware that percentages are meaningless for the individuals concerned. For them, the unemployment is 100 per cent. Therefore, we will try to manage the changes that we judge to be inevitable with a duty of care to those people and with as much humanity as we possibly can.
I am very familiar with this topic because more than a decade ago I was on the Benches opposite arguing about the Bill and many of the things that the noble Lord, Lord Martin, raised. I remember the noble Baroness, Lady Gould, and myself, as two former party officials, pointing out that the Bill was couched in terms that made the treasurership of a political party sound like one of those golden prizes in politics, whereas the hard truth is that it is usually given to someone who has inadvertently left the room at the wrong time. It was argued at the time that the commission would have all kinds of talents except perhaps the most valuable talent of all—the ability to run elections at the sticky end for the political parties. The most recent appointments to the commission have been an attempt to remedy that, because the nominees have come from the political parties. I hope that that answer meets the point that was raised.
The noble Lord, Lord Martin, and my noble friend Lord Tyler asked whether the heavy hand of sanctions would come down on inexperience or on genuine mistakes. The Electoral Commission, in putting forward how it wants to approach these matters, said:
“We recognise that many of those responsible for complying with the law on party and election finance are volunteers … The new civil sanctions will allow us to use more constructive approaches to secure compliance in cases where the law has been broken. For example, we could issue a statutory notice designed to improve future compliance, rather than just imposing a less flexible penalty such as a fine.”
As the noble Lord, Lord Bach, said, a lot of work was done on this before the general election, and this order reflects that. The thinking behind it is that the Electoral Commission was faced with using either a tap on the wrist or a criminal prosecution. The order gives it a range of measures. What is in the order, and what is in the remarks that I made when I introduced it, is the point that the Electoral Commission is in no doubt that proportionality will be expected of it. With political experience in the commission, I hope that it will be able to use these powers with due proportionality and that there will be no sledgehammer, as the noble Lord, Lord Martin, and my noble friend Lord Tyler feared.
My only other point is in response to my noble friend Lord Tyler, who asked about the funding of political parties. This is a firm commitment in the coalition agreement. It was mentioned in the Queen’s Speech. I am tempted to say that the Government will move directly to the measure as soon as reform of the House of Lords has passed, but that might be seen as not the kind of commitment that the House is looking for. As my noble friend Lord Tyler said, noble Lords on all sides of the House know that in the previous Parliament we came very close to getting agreement on party funding. The coalition Government are committed to try again and we hope, as the Opposition are nodding vigorously, that if we initiate a new attempt to get agreement on party funding, we will succeed this time.
Lord Bach
I absolutely agree with everything that the noble Lord has said, but if he wants to know the reason why the talks on political funding failed—as Christopher Wren said when asked for what his monument would be—he should look around him. It is the people with whom he is in coalition who have prevented it happening.
Lord McNally
I would prefer to leave those matters to the historians. We are looking forward. The Committee on Standards in Public Life is making a report. The report to which my noble friend Lord Tyler referred is on my desk at the moment. I think that we have a really good chance of taking matters forward. As I have said before, all the major parties have at some time or other faced problems, embarrassments and difficulties because of our way of funding political parties. If we really apply ourselves early in this Parliament to the problem, we could and should find a solution.
I commend the order to the House. It will help the party activists. I finish by endorsing the comments made by my noble friend Lord Tyler and the noble Lords, Lord Martin and Lord Bach, who all have campaign medals as party activists. Nothing annoys me more during a general election than knocking on a door only to be told by some proud person that they never vote and that we are all in it for what we can get. We know that our democracy works because of the tens of thousands in every political party who are willing to do those hard, dull jobs such as sticking things through doors and knocking on the doors of perfect strangers to engage them in discussion. They are the people who make our democracy work. I pay tribute to them and hope that this order will make that voluntary work a little easier.
Subsidiarity Assessment: Seasonal Workers (EUC Report)
(13 years, 6 months ago)
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Lord Roper
That this House takes note of the Report of the European Union Committee on the Proposal for a Directive of the European Parliament and of the Council on the conditions of entry and residence of third-country nationals for the purposes of seasonal employment (COM(2010)379, Council Document 12208/10) (First Report, Session 2010–11, HL Paper 35).
Lord Roper
My Lords, I beg to move the Motion in my name on the Order Paper. With your Lordships’ leave, I shall also speak at the same time to the second Motion in my name.
The report before the House is the first of its kind. This is the first occasion on which this House is being asked to exercise new powers under the Treaty of Lisbon that allow it to communicate to the European institutions a formal opinion that, on a particular topic, legislation by the European Union is unnecessary. I stress that word “unnecessary”. Legislation may be desirable, but if so, the member states could enact it at national level. It is not necessary for the European Union to legislate. That principle of subsidiarity has been part of Community law for a long time and was first enunciated in the Treaty of Maastricht nearly 20 years ago. The Treaty of Amsterdam added a lengthy protocol on the application of the principle that included the words:
“The Community shall legislate only to the extent necessary”.
However, it was only on 1 December last year, with the entry into force of the Treaty of Lisbon, that national parliaments were granted the right to give, in a reasoned opinion, their view that a particular proposal for European Union legislation did not comply with the principle of subsidiarity and that the Commission—the originator of the proposal—should have an obligation to review it if enough parliaments did so.
The procedure for the House to deliver a reasoned opinion was suggested by the Procedure Committee in its second report of last Session. Its recommendation, which the House agreed on 16 March, was that, when the European Union Committee comes across an EU legislative proposal that in its view does not comply with the principle of subsidiarity, it should produce a report with a reasoned opinion to that effect for debate by the House. That report is debated as usual on a Motion to Take Note, as we are doing tonight, but alongside that, as noble Lords will see, is a free-standing Motion inviting the House to support the reasoned opinion and to instruct that it should be forwarded to the presidents of the three European institutions. That second Motion, which we are debating along with the first, is of course amendable and divisible.
I turn now to the substance of the matter before us. Most countries rely to a greater or lesser extent on immigrants as seasonal workers, in particular for agriculture and tourism. Nationals of member states are of course allowed to enter other member states as seasonal workers, but that has nothing to do with it. The committee’s report concerns a proposal from the Commission on the entry and residence as seasonal workers of persons who are not citizens of a European Union country. Such people are referred to as third-country nationals. At present, the number of third-country nationals entering each member state and the conditions under which they enter and reside are matters for the national laws of the individual member states. The numbers remain a matter for national law because the treaties so provide, but the Commission’s proposal is for a directive that would unify the laws governing the conditions of entry and residence.
Because immigration is one of those matters on which the European Union and the member states share a competence, the Union can act only if, and to the extent that, the member states cannot use their national laws to govern the conditions of entry and residence of third-country nationals as seasonal workers. The view of the European Union Committee is that such matters can be regulated at member-state level and therefore should be regulated at member-state level; the Union should not be legislating in this field.
The committee’s reasons for believing that are set out in the report that we are examining tonight. I do not propose to go into the details of them now, but suffice it to say that the European Commission gave four reasons for thinking that action at EU level was necessary. However, none of the four convinced our sub-committee or the full European Union Committee. I am not totally convinced that they persuaded the Government either. In their Explanatory Memorandum, the Government set out the four Commission reasons and stated that,
“the UK would agree that on the basis of (i) at least, the principle of subsidiarity is met”.
Therefore, it seems that they were not very impressed by the other three reasons either. I look forward to hearing from the Minister whether that is the case.
Our committee is not alone in having concerns about subsidiarity. One House of the Austrian Parliament and both Houses of the Czech and Dutch Parliaments have already issued reasoned opinions, and other Parliaments have expressed doubts without going as far as issuing a reasoned opinion. The European Scrutiny Committee of the other place also has concerns. It has not issued a formal reasoned opinion but its chairman has written to the European Union institutions to voice that committee’s concerns.
I think that I should point out one other thing about the directive. Immigration measures, of course, do not apply to the United Kingdom unless we choose to opt in. When we considered the directive on 12 October, the three-month period for opting in still had three days to run. Therefore, when your Lordships’ committee agreed the report, we were not certain whether the Government would opt in. We now know that the United Kingdom has not done so. The fact, however, that an EU measure on these lines would not apply to the United Kingdom does not, in my committee’s view, in any way affect our power, and perhaps our duty, to make the House’s views on the subsidiarity issue known to the European institutions.
Unfortunately, the long Summer Recess has caused problems with the timing of our debate today. The treaties allow national parliaments eight weeks within which to issue a reasoned opinion. For this proposal, the eight weeks expired on 15 October, a large number of the weeks having occurred during our Recess. I make no complaint at all about the timing of this debate. The committee is very grateful to the usual channels for arranging it at such short notice. However, the committee was faced with the choice of sending a report to Brussels which would be in time but which would not be a reasoned opinion of the House, or of waiting until today’s debate so that, if the House were so minded, what went to Brussels was the view of the House and not just of the committee.
The Commission has also said that it will not rely on technicalities in giving weight to views of national parliaments, so we chose the second course. That means that, if the House agrees to issue a reasoned opinion today, it will not count towards the threshold for triggering the formal Lisbon treaty procedures. That threshold could not have been met even if we could have had our debate last week. Therefore, I am confident that the political weight of the opinion of this House will not be in the least diminished.
Lord Inglewood
My Lords, I do not propose to comment on the substance of the Motion. However, I would like to make a few remarks about the process. Like the noble Lord, Lord Roper, I must mention that this is an historic occasion. After all, it is the first time that the House has considered whether it wishes to pass a reasoned opinion. As the effect of a number of reasoned opinions from different member states, when added together, can change the direction of the European legislative process, albeit somewhat tentatively, it is a new form of involvement in the European system of law-making which directly involves parliaments of the member states. It is, of course, in line with the provisions that were brought in under the Lisbon treaty because this House is one of two Chambers of a bicameral parliament of a member state of the Union. Indeed, if I think back to the debate on the Lisbon treaty, there was not agreement about very much but, as I recall, this was one of the few proposals which seemed to command general support.
We are talking about the direct involvement of this House in European law-making. We are not talking about political process; we are not talking about scrutiny; we are not talking about participation in COSAC; and we are not even talking about domestic legislation. We are talking about something very new. It follows that this House is entirely at liberty in these circumstances to take a different view from either the Government of the day or of the other place. They too, in their own way, have their own role in European legislation. As has been explained, it seems that in this instance the Government and this House are more or less at one, both on process and on substance, but that is not necessarily always going to be the case.
As a result, there are two questions I would like to ask the Minister—I hope she has been warned about them. First, what is the Government’s policy towards a draft piece of legislation which they consider to be in breach of the principle of subsidiarity, but of whose substance they approve? Secondly, I would be grateful if the Minister could confirm that, in their view, the primary principle for this House and for another place in considering these matters is to ensure that the constitutional integrity of this country’s relationship with the European Union is maintained.
Lord Stoddart of Swindon
My Lords, I thank the noble Lord, Lord Roper, for introducing this debate and for his Motion, which I shall support if there is a vote tonight. It is not my usual practice to congratulate the committee of which he is the chairman; I usually have a lot of criticism. I think that the last time I was able to praise it was for its masterly report on the Maastricht treaty—or it may have been on the Single European Act. However, I congratulate it on its watchfulness and on being prepared to use the one clause of the Lisbon treaty that was any good to put the point of view of this House on the directive.
The directive is long and detailed, so the noble Lord’s explanation of it was very useful. It is entirely correct that he and the committee should challenge it on the grounds that it does not comply with the principles of subsidiarity. His Motion should receive support from all quarters of the House.
The admission of third-country nationals is surely a matter for nation states and not the European Union. The trouble with the Union is that it seems increasingly to want to intervene and interfere in every nook and cranny of national life. It must be confronted on this and I am glad that we are doing something about it tonight. Who comes to this country or any other country, where they come from, why they are here and what they can do is none of the EU’s business; it is absolutely for national Governments and national law. I am glad to hear that the Government are not acceding to the directive, because it would place restrictions on employers and transfer to the European Union powers that it does not already have.
I hope that the Select Committee will continue to get tough. It has a wonderful opportunity to do so. In the face of the welter of initiatives and power grabs that have been coming from the European Commission and the European Parliament since the implementation of the Lisbon treaty, it will be more than ever necessary for it to be watchful. As it now recommends, it should be tough and use the provisions of the Lisbon treaty that allow national parliaments, in particular this Parliament, to make comments and to try to alter or have withdrawn matters that are coming from the Union.
Unfortunately, this debate does not allow me to make a protest about scrutiny override—or perhaps it does. I was concerned that the Government used the scrutiny override to accede to the European investigation order.
Lord Roper
The Government have decided to opt in to the matter, but that was not an override of the scrutiny. We have not completed scrutiny. Scrutiny of the directive is continuing. It has not been agreed yet.
Lord Stoddart of Swindon
I see. Perhaps it is to be agreed. That means that Parliament will have a say beforehand. I am very pleased to hear that.
There is plenty more that I would like to say in this debate, but it is a specific debate and I hope that we will be able to discuss the European Union and our future in it when the sovereignty Bill comes forward. We will have a lot to say but, in the mean time, I hope that the European Union Select Committee will keep up its observations, control and what have you of all the matters coming from the European Union that are not in this country’s interests.
Lord Williamson of Horton
My Lords, I am truly being spoilt today, as I find myself on the speakers list sandwiched—if that is the word—between the noble Lords, Lord Stoddart of Swindon and Lord Pearson of Rannoch. I am sure that the moderation and content of my remarks will satisfy both of them, which is not always the case.
I intervene briefly to support the European Union Committee’s first report of this Session, which assesses whether the proposal for an EU directive on conditions of entry and residence of nationals from third countries for seasonal employment reasons does or does not—and the committee says that it does not—comply with the principle of subsidiarity.
First, because this Parliament, under Article 5(3) of the Treaty on European Union and Article 6 of the protocol on the application of the principles of subsidiarity and proportionality, can submit a reasoned opinion on Commission proposals to the European Parliament, the Council and the Commission itself, it is important that we should use this provision and that it should not go by default. I am glad that the EU Committee has examined this specific proposal and made this recommendation.
Unfortunately, the word “subsidiarity”, which sounds very technical, does not ring many bells in the United Kingdom. None the less, it is important, because it is a serious attempt to define the boundary between potential action at EU level and action by member states under their national arrangements, as in matters of shared competence the EU can act only if and in so far as the objectives of the proposal cannot be sufficiently achieved by the member states. Just as in this House we have a duty to scrutinise the activities of our Government and to ensure that they do not go beyond what is necessary, so we need also to present our views on the respect of the principle of subsidiarity and proposals being put to the EU institutions.
Although the UK opted out of the immigration regime in the original so-called Schengen provisions and we decided to operate our national border controls, it is remarkable that, in recent years, perhaps the number one concern of citizens has been the question of immigration and our operation of our border controls. None the less, I believe that the entry to and residence in the UK of third-country nationals as seasonal workers can be controlled by market forces and our national arrangements. That is what the EU Committee has said. Otherwise, we would have to follow the EU directive, if the Government had decided to opt in, and I do not think that we should do that.
Finally—this is a last word—those of us who work in this House know that we have been bombarded in recent years by a large volume of national, not EU, legislation, both as Bills and, more particularly, as secondary legislation. In the period from 1 August 2008 to October 2009, for example, 2,366 statutory instruments were made, of which only 94 directly implemented EU law. None the less, if we can avoid a proposal that, in the view of our EU Committee, does not respect subsidiarity, that is good.
Lord Pearson of Rannoch
My Lords, like my noble friend Lord Stoddart, I never thought that I would have the pleasure of supporting a report from your Lordships’ European Union Select Committee; but I do so now, and will be happy to support the Motion in the name of the noble Lord, Lord Roper. I hope they will not be too embarrassed if I go further and congratulate the noble Lord, Lord Hannay—who I am sorry to see is not in his place to hear this—and his Home Affairs Sub-Committee on the brevity and clarity with which they have put their case.
This report is perhaps a cause for even greater celebration. As far as I am aware, if your Lordships agree with the Motion of the noble Lord, Lord Roper, this evening, it will be the first time that your Lordships' House has voted to prevent a power being passed from this Parliament to Brussels since 30 January 1997, when the House supported a Bill in my name to withdraw from the European Union altogether. So, on the face of it, this report and the vote tonight should be good news for Eurosceptics and the country. I hope it will not detract from what I have said if I ask the noble Lord, Lord Roper, and indeed the Government—I am not quite sure who will be replying—the question: a quoi bon? What chance have we got of actually keeping control of the admission of third country nationals as seasonal workers? What happens next?
As I understand it, and as the noble Lord, Lord Roper, mentioned, I think we are supported in our opposition to this directive by only five other houses of parliament in the EU: the Austrian lower house and both houses in Holland and the Czech Republic. I gather that unhappy noises have also been made in other houses of parliament, including the House of Commons, which has not had the time, or perhaps the inclination, to debate the matter. I hope I am being pessimistic; and so I would ask the noble Lord, Lord Roper, and/or the noble Baroness, Lady Neville-Jones, who is to reply for the Government, to tell us how they see the directive proceeding from now on. For instance, can the Minister remind us how many member states’ houses of parliament are required to object to this directive before the Commission has to take action? Not much action though—as I understand it, it merely may have to reconsider it and then decide to proceed on its merry way anyway.
Noble Lords will appreciate that I ask this question against the background of Brussels and the Luxembourg Court’s long history of dishonestly interpreting the treaties to allow the EU to take ever more power at the expense of the member states. Perhaps the best example of this has been their use of Article 308 in the original treaty of Rome, which became Article 352. This allowed Brussels to exercise powers that the treaties did not grant, but only,
“in the course of the operation of the common market”.
So, it was designed to facilitate minor tariff adjustments and so on in the original Common Market. Yet over the years this clause has been used: to grant food aid to developing countries; to promote urban renewable in Northern Ireland; to provide assistance to economic reform in Mongolia; to co-ordinate our social security systems; to establish the EU's Agency for Fundamental Rights; to fund a £235 million propaganda campaign; to allow Brussels to get involved in the prevention and aftercare of terrorism and in the control of civil emergencies; and, for good measure, to regulate glucose and lactose. I will say no more now, but students of the EU’s ability to abuse the treaties for its power-seeking purpose will find a fuller account of it in your Lordships' Hansard for 18 June 2008, cols. 1073-76.
The situation after Lisbon becomes worse, because Article 308,—now Article 352 in the Lisbon treaty—now replaces,
“in the course of the operation of the common market”,
with,
“within the framework of the policies defined by the Treaties”,
which gives new space for the judicial activism of the Luxembourg Court, and no doubt it will continue to use it.
Before I sit down, in the same vein, could I ask what has happened to the finding in the committee’s 14th report in the 2008-09 Session, The future of EU financial regulation and supervision? That finding was that EU supervision of our financial affairs was not legal under the treaties. It required a treaty change, yet such supervision is proceeding apace and, as far as I am aware, the treaty has not been changed. I ask the Government whether the committee was wrong or whether its views are simply being ignored by Brussels as usual.
In conclusion, I fear the question becomes this: even if the committee is right that subsidiarity should legally apply in this case—and the committee clearly is right—what chance is there that Brussels will go along with its own law? I look forward to the Government’s reply.
Lord Richard
My Lords, this is the first time in 20 years that I have spoken in the gap. First, I apologise to the House for that because on the whole I think that debates should proceed in the normal and acceptable way. In my defence, I took the view that this would not be a debate that required a list, but I was wrong.
This is a very strange debate in many ways. I have views on the EU, as most Members of this House will know, and I find myself agreeing with the noble Lord, Lord Stoddart, and part-agreeing with the noble Lord, Lord Pearson of Rannoch. I have to say to him that I find it very strange that he sits behind me. There is a little prickling in the middle of my back every time I know he is there.
Lord Pearson of Rannoch
My Lords, I am afraid the Conservatives had me for 12 years, and I understand that the Bishops are not keen to have me either.
Lord Richard
The place the noble Lord should be is obviously on the other side of the House.
What is to happen in this instance is very simple. When the issue came before the sub-committee, various members of the sub-committee looked at it and thought that subsidiarity applied and that it was incumbent upon the committee to say so. We could have said nothing about it, fairly reliant upon the fact that the Government were going to opt out, in which case, as far as Britain was concerned, it would be pretty academic. On the other hand, we took the view that since this was the first time that this procedure would ever be used, it was important, on an issue of principle, that we should make our views known and that therefore this novel procedure should be explored.
On the whole, the procedure—and it is process not substance that I really want to talk about—has worked. The sub-committee produced its report, it went to the main Select Committee, which approved the report, and it has now come to the House. If the House takes the view that it is invited to take, there will be a reasoned opinion of this House that will go back to the Community institutions. It is an admirable procedure. The only trouble was that we were out of time. It was no one’s fault, but it meant that when the committees were looking at this, there were about three days before the time limit ran out. The noble Lord, Lord Roper, explained at the outset that there was a choice. Either he could write a letter to the institutions in Brussels or we could get a reasoned opinion of the House and send that to Brussels. That is the view that he took, and I support it.
I again apologise for having taken up the time of the House in speaking in the gap.
Lord Hunt of Kings Heath
My Lords, this is a most important debate and I am indebted to the European Union Committee and to its Home Affairs Sub-Committee for the work that they have undertaken. I say to my noble friend Lord Richard that I am delighted that the views of the committee have been made known to us in this way. As the noble Lord, Lord Roper, has indicated, this is the first occasion on which the House is being asked to exercise new powers under the treaty of Lisbon. But I would also suggest that it is one of the first occasions on which the new Government’s policy towards the EU has been put to the test.
I disagree fundamentally with the noble Lords, Lord Stoddart and Lord Pearson, when it comes to matters European, but they are right to put the approach of Her Majesty’s Government under the spotlight. The matter arises from Europe’s need for third-country seasonal workers. The Commission believes that there is a need for low-skilled and low-qualified workers, which will continue expanding; that there is a more permanent need for unskilled labour within the EU; and that these gaps are unlikely to be filled with EU-national workers because, as we well know, such seasonal work is often unattractive.
We are also informed in all the useful documentation that we have been able to see that the Commission sees the proposals before us as part of the EU’s effort to develop a comprehensive immigration policy. It cites in its defence a number of political mandates to justify such action and sees its proposals as contributing to implementation of the EU 2020 strategy and to what it describes as effective management of migration flows for seasonal temporary migration.
As the noble Lord, Lord Roper, has already suggested, because immigration is a matter where the Union and the member states share competence, the Union can act only if and to the extent that the member states cannot use their national laws to govern the conditions of entry and residence of third-country nationals as seasonal workers. As the noble Lord said, the committee’s reasons for believing this are set out in the report. They do not need repeating. In my view, they are substantive and persuasive.
It is significant that a number of other national parliamentary legislatures have also expressed concerns. Substance to the Select Committee’s reasoning is also given by the House of Commons European Scrutiny Committee, first, at its meeting on 15 September where it concluded that, while there is an appropriate legal basis for the draft directive, the committee was less certain that the measure respects the principle of subsidiarity. At its subsequent meeting on 12 October, the House of Commons committee undertook what can only be described as a very careful analysis of the draft directive and the Commission’s rationale for its actions. It concluded that there were continuing reasons to doubt whether the draft directive complied with the principle of subsidiarity.
It is rather surprising that the Minister for Immigration, Mr Damian Green, did not appear to share that concern. He told the committee that he believed that the draft directive is consistent with the principle. In his argument to the committee, he said that he believed that it complies with subsidiarity on the basis that decisions taken by one member state on the rights of third-country nationals could affect other member states and distort migratory flows. He also suggested to the committee that labour mobility within the EU, especially from new to old member states, may cause or aggravate a shortfall in seasonal labour in the source countries, which needs to be met from outside the EU, and that this inter-relationship argues for EU-level measures to manage the admission of seasonal workers from outside the EU.
I found that a rather surprising analysis by the Minister. As the Conservative Party manifesto seemed to suggest that it would be rigorous in its efforts to prevent,
“further extension of the EU’s powers over the UK”,
one would have thought that one might have had a rather more convincing argument from Mr Green as to the approach that the Government took. It would be helpful to the House if the noble Baroness could define what the Government consider subsidiarity to be. I thought that the questions asked by the noble Lord, Lord Inglewood, were extremely important in that context. I agree also with the noble Lord, Lord Roper, that simply because Her Majesty’s Government have decided not to opt into the directive, it does not detract from raising the serious question about their judgment and response to the subsidiarity question.
I end by coming back to the point made by my noble friend Lord Richard, who raised the issue of timing. As the noble Lord, Lord Roper, has explained, the long Summer Recess has caused problems. The timing also exercised the Commons European Scrutiny Committee. In its letter of 13 October to the president of the European Parliament, the chairman of the committee, Mr Cash, pointed out that the parliamentary timetable did not permit the Commons to issue a reasoned opinion by 15 October, when the eight-week deadline expired. I know that the committee was aware that the former Commissioner for Institutional Relations and Communication Strategy had already said that the Commission would listen to the views of national parliaments even if there were an insufficient number of reasoned opinions to require the Commission formally to review its draft legislation. However, ideally one should not have to rely on the good will of the Commission in that respect.
I should like to put this point to the noble Lord, Lord Roper. In view of the timetabling difficulty and given that this might arise again in the future, particularly in the circumstances of the Summer Recess, will he consider, in conjunction with the Commons European Scrutiny Committee and the Leaders’ Group in this House which is looking at procedures, whether there is a way of avoiding this problem in the future? Overall, however, from the Opposition Benches, I have no hesitation in supporting the Motions tabled by the noble Lord, Lord Roper.
The Minister of State, Home Office (Baroness Neville-Jones)
My Lords, along with the Benches opposite, I am grateful to the committee for its report and for the unusual degree of unanimity and agreement that has arisen in consideration of a matter concerning the European Union. As the noble Lord, Lord Roper, said, this is a first and our debate is about an important issue—the test of compliance of the draft directive with the principle of subsidiarity. Indeed, as he pointed out, the fact that something is desirable is not enough to meet the principle of subsidiarity; it has to be necessary.
I start by responding to the important points raised by my noble friend Lord Inglewood. The Government are a strong supporter of the Lisbon treaty arrangements for national parliaments to be given a direct say in the application of what we regard as the crucial principle of subsidiarity in EU lawmaking. That is defined in the treaty and the Government respect the right, irrespective of their own view, of the Houses to take their view on the European institutions to ensure that the Commission’s application of the principle remains within the bounds of the treaty. We believe that this constitutes an important step towards the democratic legitimacy of the European Union.
I was asked about the relationship between subsidiarity and the policy objective. When considering any directive, the Government’s policy is to assess as a matter of course the proposal on the grounds of subsidiarity irrespective of its substance. The Government carry out the subsidiarity test by checking whether, where the treaty allows for action by both the Union and member states, the objectives of the proposed action cannot be sufficiently achieved by member states by reason of the scale or the effects of the proposed action and so could be better achieved by the Union. That is the high test. Should the Government conclude that the action cannot be better achieved at the Union level, they would submit their views to the Commission. I hope that that makes it implicitly if not absolutely explicitly clear that the Government’s view is that subsidiarity takes precedence.
Before moving on to the specific issues raised by the committee, I should like to set out the Commission’s position on this directive. As a number of speakers have noticed, the Government have decided that the UK will not opt in to the measure. The UK’s immigration system does not currently provide for the admission of seasonal workers and our view is that our seasonal labour needs can be met from an expanded EU labour force. The seasonal agricultural workers scheme was closed to third-country nationals on 1 January 2007 by the previous Government and within the EU it is now open only to nationals of Bulgaria and Romania. We have no reason to suppose that that supply of labour will be inadequate. The Government have proposed setting a limit on the future volume of non-EU migrants allowed to enter the UK and are carrying out consultations on the options for implementing this policy.
Against that background, it would not have made sense for the UK to participate in an instrument that provides for common rules for the admission of third-country nationals for seasonal work, nor would it be sensible to lock ourselves into a directive that limits our freedom to decide what kind of controls we might want to apply to seasonal workers in the future.
The subsidiarity test is not always as straightforward as it seems, as it depends on an assessment of whether the proposal would have the results that it sets out to achieve. It is clear that in given instances it is possible for lawyers to disagree on these matters and for legal advice to be different, as implicitly noted in the contribution of the noble Lord, Lord Richard. The Commission’s view is that the need for seasonal workers is a “common occurrence” in most member states and that the terms on which one member state admitted such workers could distort migratory flows; it suggests that decisions by one member state could affect other member states. The committee argues that the need for seasonal workers may nevertheless differ between member states and that the treaty on the functioning of the EU recognises that volumes of admissions are for determination by each member state.
The Commission argues that the action is needed to reduce overstaying and illegal entry in an area without internal borders. The committee rejects this view on the basis that it does not see why having common rules would reduce this risk. The Commission’s proposals include provisions that would facilitate repeated re-entry as a seasonal worker on the basis that those admitted as seasonal workers would be less likely to overstay if they had some certainty that they would be able to re-enter after they left.
The Commission’s third argument is that exploitative working conditions need to be addressed by a,
“binding and thus enforceable EU-level agreement”.
The committee has objected that national measures may be equally binding and at least as effective. The test in this case, therefore, depends on whether we think that the intended result is better achieved through collective action.
Finally, the Commission suggests that the measure is crucial for effective co-operation with third countries. The Government share the committee’s assessment that this is unpersuasive given that nothing in the measures provides leverage for negotiation of wider agreements with specific third countries.
The Government take the view that the case for compliance with the subsidiarity principle is arguable, as noble Lords on the Benches opposite have noted, in respect of migratory flows and the risk of overstaying. However, the fact that there is a divergence between the applicability of compliance with this directive and the principle of subsidiarity does not detract from our belief that the view of the House on the European institutions and their duties should take precedence and should not be trumped by the Government’s view on compliance with given articles. The earnest of our view is that we give precedence to the committee’s view despite our differing opinion on the application of subsidiarity in relation to a couple of the clauses.
Lord Hunt of Kings Heath
I am sure that the House will be gratified to learn that the Government are not going to disagree with the Motion being put forward tonight, which is the implication of what the noble Baroness has said. Yet the fact is that the Minister clearly said, at least to the Commons scrutiny committee, that he believes the draft directive complies with subsidiarity. If that is the case on that particular aspect, to what extent does that create a precedent in relation to the Government’s approach to the EU’s clear wish to develop a comprehensive immigration policy? For instance, if the Government are unwilling to argue with the Commission on subsidiarity in relation to this order, does it go wider than that?
Baroness Neville-Jones
The noble Lord grossly overstates what I have just said, which was that in these two instances there was an arguable case. Every single proposition put forward by the Commission will be treated on its merits by the Government and, as I have indicated, it will certainly be subjected first and foremost to the test of subsidiarity. The general position of the Government is well known; we regard immigration as something which is in the purview of the United Kingdom.
Lord Hunt of Kings Heath
I am sorry to interrupt the noble Baroness again, but when she says it is arguable that that is the Government’s case, that is not what the Minister in the other place told the scrutiny committee. I have already read out what he said. He does not say it is arguable, but that he is satisfied that the draft directive complies with subsidiarity. I would have thought that that sets a precedent for other areas of immigration in which the Commission may wish to involve itself in future.
Baroness Neville-Jones
I am saying that we will treat each of these proposals as put forward by the Commission on its merits. I hope that it will be discouraged from putting forward further proposals by the reaction from member states. It does not follow that, because we have taken a view on a couple of these articles, we will take a wider view of the rights of the European Commission or the competence of the European Union in immigration policy.
I turn for a moment to the questions raised by the noble Lord, Lord Pearson of Rannoch. He asked what was likely to happen next. As a student of these matters, he will know quite as well as I do that if one-third of national parliaments object on subsidiarity grounds, the proposal is sent back to the Commission. That is the yellow card; if a majority of parliaments oppose a Commission proposal, it gets the orange card. I do not know how many cards there are on the table, but we certainly regard this process of showing the European Commission what position the national parliaments take as being an important part of the process—and well said that this is a direct intervention in the legislation process of the European Union.
The noble Lord’s other point was about financial supervision and the progress of what the Commission is doing. I am afraid I will have to write to him on that, as it is not something on which I have been briefed. I think it is something in the purview of the Treasury, but I undertake to write to him.
Lord Pearson of Rannoch
I think the noble Baroness rightly said that one-third of national parliaments would be necessary before the Commission had to think again. As I understand it, we have only five houses of parliament, so there is the difficulty of our being a long way from what is required to make the Commission think again, is there not? Riding over and above that, there is surely the question of the law. Assuming that the committee is right—I think that your Lordships are taking that view this evening—my question was: what hope is there that the law will prevail, or will the juggernaut carry on regardless, as usual?
Baroness Neville-Jones
I would hope, given that this is the first test for the European Commission, that it would take note of the reservations being expressed in a number of parliaments of the European Union, irrespective of whether there are enough for it to be obliged to take notice. There needs to be further discussion in the European Union. If we have one of those situations in which the formal requirement has not been fulfilled but nevertheless it is clear that there are reservations, this is a moment when the Commission should be given pause to think again about the direction in which it is trying to go. I cannot anticipate what the result of that debate might be, but I hope that there would be one.
I can say that, irrespective of what that discussion would lead to, the United Kingdom will not be bound by this directive. We have not opted in and we have no plans to consider so doing after adoption. In the rather unlikely event that there was some consideration of that possibility at a future date, there is no doubt that the Government would take full account of the committee’s view on subsidiarity at that time.
Lord Stoddart of Swindon
Will the Minister clear up one point? As I understand it, the Government are not going to oppose the Motion of the noble Lord, Lord Roper, today. Undoubtedly, the Motion will therefore be passed. But suppose that the Government did not agree with the amendment of the noble Lord, Lord Roper—then what? The Lisbon treaty refers to national parliaments, not national governments. Can we have an assurance that if the Government disagreed with a Motion coming from the European Select Committee, Parliament would be allowed to make the decision unwhipped?
Baroness Neville-Jones
My Lords, clearly I did not make myself clear enough; I hoped that I had dealt with this point in response to the noble Lord, Lord Inglewood. It follows from the Government’s position on the sovereignty of Parliament that Parliament’s view on subsidiarity would trump—would come ahead of—the view that we would take on substance. I hope that that is clear.
Lord Roper
My Lords, I should perhaps begin in response to something that was said by the noble Lord, Lord Pearson of Rannoch. The noble Lord, Lord Hannay, the chairman of the sub-committee who was responsible for this report, was unavoidably detained and unable to be here today, but he asked me to let the House know how sorry he was that he could not be here. I am glad that the noble Lord, Lord Pearson, reminded me.
This has been an historic occasion in more ways than one. Not only have we had people who have gained medal honours on one side of the European debate being in favour of this matter and a former Member of the European Parliament, a former Secretary-General of the Commission and a former commissioner all supporting the position, but people who have gained medal honours for taking different positions on Europe over the years have also shown their support for the work of this committee. The committee must therefore be very pleased. I will report that back, and those of my colleagues who are here will have noted it. We appreciate that the work that we have done has been taken so seriously.
I shall comment on one or two of the things that have been said. On the question of the 14th report on the future of European Union financial supervision, I should let the noble Lord, Lord Pearson of Rannoch, know that our Sub-Committee A is doing further work on this subject and will be producing a report to the House before long. The matter is under active attention.
On the question that was raised by the noble Lord, Lord Stoddart of Swindon, congratulating us on our watchfulness, perhaps I can let him into a secret: another of our sub-committees adopted a reasoned opinion this morning that it will be sending to the full committee. This is not a one-off matter; it something that your Lordships will hear about again, although not necessarily too often. My estimate is that there will probably be six or eight occasions in a year, but we will see. It is interesting that we have already had so many.
One of the reasons I am tackling the matter in this way is to ensure that a formal reasoned opinion will be sent by the Clerk of the Parliaments to the various authorities. It is important to get this on the record, let other Parliaments know what we have done in this regard and offer them encouragement, even though it is now too late to act in terms of the threshold.
The noble Lord, Lord Hunt of Kings Heath, referred to timing. This is a particularly difficult case. The original Council proposal is dated 15 July. The Government’s Explanatory Memorandum is dated 28 July—the very beginning of our Summer Recess. We could not have had a more difficult case as regards timing. However, we considered this matter in this House when we considered the original procedure. The Procedure Committee report, to which I referred in my opening remarks, said that new procedure was,
“subject to review if the timetable proves unworkable”.
In my view it is too early to say whether this is the case but that undertaking is obviously very important.
I have not seen the letter that Mr Green sent to the Commons subsidiarity committee; I have seen only the views on subsidiarity in the Explanatory Memorandum which was sent to both Houses, where the Government seem to hang mostly on the first of the four. We appreciate that different legal interpretations are possible. As the Minister knows, we disagree with the legal interpretation of the Commission’s case and consider that the matter should be queried. However, we are extremely grateful to the Government for giving their opinion but then allowing the House to come to its own conclusion. This is a case of Parliament having an opportunity to act. As I said at the beginning, this is an historic occasion. I am very pleased that we have had this debate and that consensus has been reached on all sides of the House.
Subsidiarity Assessment: Seasonal Workers (Reasoned Opinion)
(13 years, 6 months ago)
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Lord Roper
That this House considers that the Proposal for a Directive of the European Parliament and of the Council on the conditions of entry and residence of third-country nationals for the purposes of seasonal employment (COM(2010)379, Council Document 12208/10) does not comply with the principle of subsidiarity, for the reasons set out in the First Report of the European Union Committee, Session 2010–11 (HL Paper 35); and instructs the Clerk of the Parliaments to forward this reasoned opinion to the Presidents of the European institutions.