House of Commons
(13 years, 5 months ago)
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Prayers
(13 years, 5 months ago)
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This information is provided by Parallel Parliament and does not comprise part of the offical record
Speaker’s Statement
(13 years, 5 months ago)
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Mr Speaker
I have a short statement to make further to my statement of 8 November on the application of the sub judice rule to the matter of the judgment of the election court in the petition relating to the Oldham East and Saddleworth constituency.
The House will know that the administrative court has upheld the certificate and report of the election court. I understand that Mr Woolas is not intending to appeal, although the period for applying for leave to appeal has not yet expired. However, I can inform the House that the sub judice resolution no longer applies to this matter.
So far as the seat is concerned, it has been vacated since 5 November, the date on which I received the election court’s certificate and report, as I informed the House in my previous statement.
Oral Answers to Questions
(13 years, 5 months ago)
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John Howell (Henley) (Con)
2. What methodology her Department follows to determine the nature of security threats to the UK.
Jonathan Lord (Woking) (Con)
12. What methodology her Department follows to determine the nature of security threats to the UK.
Stephen Mosley (City of Chester) (Con)
13. What methodology her Department follows to determine the nature of security threats to the UK.
The Secretary of State for the Home Department (Mrs Theresa May)
As part of the Government’s national security strategy, we conducted a national security risk assessment—the first time that a Government have undertaken a comprehensive assessment of all national security risks to the UK. The most important risks were then placed into three tiers to inform the strategic defence and security review.
John Howell
I thank my right hon. Friend for that answer. Does she agree that the issue is even more important today, because the recent activities of WikiLeaks have shown the need to strengthen cybersecurity measures in the UK?
Mrs May
My hon. Friend makes a very pertinent point. On WikiLeaks, the Prime Minister’s national security adviser has written to all Departments to ask them to look again at their information security and to provide him with assurance about the level of that information security.
My hon. Friend makes a wider point about cybersecurity. This Government recognise the importance of dealing with cybersecurity and cybercrime, which is why we focused on both in the strategic defence and security review and in the national security strategy, and over the next four years £650 million is being made available to develop a national cybersecurity programme.
Jonathan Lord
What are the Government doing to prevent threats from within and to tackle radicalisation?
Mrs May
My hon. Friend also makes an extremely important point about security. We must remember the importance of prevention as well as dealing with security threats as they arise. We are reviewing the Prevent programme, which was initiated by the previous Government, with a view to separating more clearly its counter-terrorism work from the integration or participation-in-society work of the Department for Communities and Local Government. In that work, we are also looking at radicalisation issues so that we can ensure that our programmes are effective.
Stephen Mosley
What action is my right hon. Friend taking to ensure the security of the Olympic and Paralympic games in 2012?
Mrs May
The Home Office’s Olympic and Paralympic safety and security strategy, run by the police, the London Organising Committee of the Olympic Games and Paralympic Games, the Olympic Delivery Authority and other partners, provides a framework for projects to safeguard and secure London 2012. The Minister for Security and Counter-Terrorism has conducted an audit and review of Olympic security planning, which concluded that that work is well placed. There is of course more work to be done, but an effective foundation has already been established, and we are absolutely sure that there is sufficient funding to deliver a safe and secure Olympic games in 2012. We have protected the Olympic security budget, and counter-terrorism policing budgets will stay flat in cash terms.
Mr David Hanson (Delyn) (Lab)
May I first concur with the Home Secretary about the threat posed by those involved in WikiLeaks, which is to be condemned by all in this House? In looking at the methodology for assessing a security threat, however, will she listen in particular to those voices internally who advise her on control orders, so that she does not move away from control orders in a way that potentially damages the United Kingdom but recognises that orders signed by former Ministers such as myself were placed for absolutely correct and proper reasons?
Mrs May
I accept that any Minister who has taken such a decision has done so for proper reasons. In relation to the right hon. Gentleman’s question on control orders, I can assure him that the Government and I have national security at the forefront of our minds. In considering the counter-terrorism legislation review, we need to rebalance national security and civil liberties, but we are absolutely clear that we can enjoy our civil liberties only if we have national security.
Ms Margaret Ritchie (South Down) (SDLP)
Does the right hon. Lady accept that the current system for intelligence gathering in Northern Ireland used to counteract the threat from dissident republican and other paramilitary groups has failed? The system is flawed and needs to be reviewed. The Police Service of Northern Ireland needs to take the lead in intelligence gathering to counteract the security threat.
Mrs May
I do not accept what the hon. Lady says about the flawed system that has existed so far. Sadly, the PSNI has had to deal with an increasing number of incidents over recent months in relation to bombs and other attempts on the lives of people in Northern Ireland. As I say, that threat has been increasing. It is important that we ensure that the tools are available to enable the PSNI to do the job that it has been doing. The whole House should congratulate the PSNI on its work.
Mr Ben Bradshaw (Exeter) (Lab)
On control orders, will the Home Secretary give the House a categorical assurance that she will always put the safety of the British people first and that she will resist pressure to appease either her maverick Back Benchers or her Liberal Democrat coalition partners?
Mrs May
I think that I answered that when I responded to the right hon. Member for Delyn (Mr Hanson). As I said, the Government are absolutely clear that there is a need to rebalance national security and civil liberties. We can enjoy our civil liberties only if we have our national security, and we are absolutely clear about the Government’s responsibility for ensuring our national security.
Claire Perry (Devizes) (Con)
3. How much she plans to allocate to development of the e-borders system in the next three years.
The Minister for Immigration (Damian Green)
The priority for the coalition remains to secure the border and to control migration. The coalition Government remain committed to the delivery of e-borders, which will help to reduce terrorism, crime and immigration abuse and to improve the productivity of border processes. At this stage, final budgets have not been agreed for e-borders.
Claire Perry
I am grateful to the Minister for that reply. I am particularly pleased to hear that we have an ongoing commitment to the e-borders project, which is a necessary step in tackling the problem of illegal immigration that many people in my constituency feel was all but ignored by the previous Government. Will the Minister update us on another vital part of our strategy to combat illegal terrorism, namely the formation of the dedicated UK police and border force?
Damian Green
My hon. Friend is right to point out the importance of e-borders as part of an integrated strategy to improve our border control. We have made significant progress on creating a single harmonised work force in the UK Border Agency. Some 3,000 staff have already been trained across the old disciplines of customs and immigration, and we have gone a long way towards creating a single primary line—the first line that people meet when they come into the country. On top of that, of course, we have published our consultation document, “Policing in the 21st century”, in which we announced a border police command as part of the new national crime agency. That will co-ordinate the tasking of the border enforcement operational staff who will form the new border police capability. We will make our borders much more secure with all those measures.
Mr Gerry Sutcliffe (Bradford South) (Lab)
Is the Minister not being complacent when he talks about the border and immigration service, which will face 5,260 job losses over the next five years? How can he talk tough on immigration when the reality is that he will not be able to deliver because there will be a reduced number of staff?
Damian Green
The hon. Gentleman illustrates the problem of writing his question before hearing the previous answer, in which I made the point that we are deploying UK Border Agency staff more efficiently by integrating them, as his Government started off doing. On top of that, the border police command will be within the national crime agency. That will mean not only that we better use the resources that we have, but that we will have more resources with the new border police command. Our borders will be much safer than they were under what I am afraid was the lamentable performance by the previous Government.
Helen Goodman (Bishop Auckland) (Lab)
4. What progress she has made on implementing the recommendations of the review of sexualisation of young people undertaken by Linda Papadopoulos.
The Minister for Equalities (Lynne Featherstone)
The coalition Government have already made a clear commitment to tackle the sexualisation of young people. That is why the Minister of State, Department for Education, my hon. Friend the Member for Brent Central (Sarah Teather), has announced today an independent review of the excessive commercialisation and premature sexualisation of childhood.
Helen Goodman
As a long-standing member of the Mother’s Union, I am pleased that the Government have listened to its “Bye Buy Childhood” report, but what has the Minister done about two particular recommendations in the Papadopoulos report, one of which recommends the closing down of pro-anorexic websites, while the other recommends labelling of airbrushing in teenage magazines?
Lynne Featherstone
On closing down anorexic websites, I will have to confer with my hon. Friend the Minister of State, Department for Education, who has taken on this work from Dr Papadopoulos and other recommendations that will be considered by the new review. On the labelling of airbrushing, I have met people from the industry and we are looking at what may be done to ensure that we no longer have a single image which so affects young people who are oppressed by having to conform with being over-skinny.
Jo Swinson (East Dunbartonshire) (LD)
Will my hon. Friend join me in praising Mumsnet’s Let Girls be Girls campaign, which has already seen dozens of companies sign up to support moves against the premature sexualisation of young people? Does she agree that companies should be encouraged to commit to responsible marketing and product selection for children, but that the Government need to recognise that, in some cases, regulation might be necessary on top of good practice by industry?
Lynne Featherstone
I thank my hon. Friend. I congratulate Mumsnet on its very admirable campaign on the sexualisation of children. Perhaps one of the best ways forward is to get corporations to sign up and develop their own responsibility. However, I understand from my colleague at the Department for Education that it will look at whatever is necessary, be it regulation or simple persuasion.
John Woodcock (Barrow and Furness) (Lab/Co-op)
5. What assessment her Department has made of potential links between police officer numbers and levels of crime.
The Minister for Policing and Criminal Justice (Nick Herbert)
There is no simple link between police numbers and crime—[Interruption.] What matters is how officers are deployed. Our aim is to reduce costs and bureaucracy to ensure that resources can be directed to the front line.
John Woodcock
Does the Minister understand how quickly he has seemed so completely out of touch with the reality on the ground? Every community up and down the nation will understand that more police on the street make people feel safer and that it has contributed to a lowering of crime over the past decade. Will he take this opportunity to retract his statement?
Nick Herbert
Surely the test of an effective police force is what we are doing with those officers. The report by Her Majesty’s inspectorate of constabulary, which I am sure the hon. Gentleman has read, pointed out that only 11% of a police force’s strength is visible and available at any one time. That number is too low. There is a problem with the bureaucracy that the previous Government created and that we have to deal with.
Mr David Ruffley (Bury St Edmunds) (Con)
The Met Police Commissioner says that a simple way of increasing police visibility in lower-risk areas is to end double crewing, where officers patrol in pairs, and to put individual officers on patrol. Can my right hon. Friend tell the House how many forces have adopted that very sensible policy?
Nick Herbert
I should say to my hon. Friend that these are operational matters for police forces, but we strongly support those who have taken what we regard as a sensible decision. The Met Police Commissioner and the Mayor have been clear that the move towards single patrolling has been hugely helpful in increasing police visibility, and that can be extended to other police forces.
Vernon Coaker (Gedling) (Lab)
The Sunday before last, on “The World This Weekend”, the Minister for Policing and Criminal Justice told the nation that there was no link between police numbers and the level of crime—a quite astonishing claim. He also argued in recent weeks that it is not officer numbers that are key to cutting crime but individual directly elected police commissioners who will make the difference. As The Daily Telegraph reported, the Minister told a private meeting of police authority chairs on 9 November that, to make that happen,
“the first thing a directly elected individual will do is to appoint a political adviser.”
Will he confirm that he made those remarks, and does he stand by what he told The Guardian last week—that the Police Reform and Social Responsibility Bill will enshrine in legislation that these advisers
“may not…be a member of a political party”?
Nick Herbert
First, I did not say that there was no link; I said that there was no simple link. Let me tell the hon. Gentleman something:
“I don’t think it’s possible to make a direct correlation between police numbers and crime reduction.”
Those are not my words; they were the words of the right hon. Member for Exeter (Mr Bradshaw) when he appeared on “Any Questions” in September.
In response to the hon. Gentleman’s specific question, he and his right hon. Friend should have taken care to read the Bill and the consultation document before making the allegation that police and crime commissioners will be able to appoint political advisers. We are determined that they should not be able to do so and have legislated for that. It is in the Bill that they may not appoint political advisers.
Mr Robert Buckland (South Swindon) (Con)
6. What steps she plans to take to reduce annual immigration from states outside the EU to the tens of thousands.
Sheryll Murray (South East Cornwall) (Con)
11. What steps she plans to take to reduce annual immigration from states outside the EU to the tens of thousands.
Karen Bradley (Staffordshire Moorlands) (Con)
15. What steps she plans to take to reduce annual immigration from states outside the EU to the tens of thousands.
The Minister for Immigration (Damian Green)
As my right hon. Friend the Home Secretary announced to the House a fortnight ago, we are introducing a new permanent limit on non-EU economic migrants, with a reduction in the number of visas next year from 28,000 to 21,700. We are also taking action to tighten our immigration system across all the key routes—work, students and family—and will make settlement in this country a privilege to be earned.
Mr Buckland
I thank the Minister for that reply. What evidence has he found of abuse in the points-based immigration system that was introduced by the previous Government?
Damian Green
Regrettably, there is large-scale abuse. For instance, we looked at a sample of the migrants who came here last year in tier 1, which is meant to cover the brightest and the best of highly skilled migrants, and nearly a third of them were doing completely unskilled jobs. We have also found widespread abuse in the student system. That tells us that we must refine and smarten the points-based system that was left to us by the previous Government so that it does the job of ensuring that we get immigration numbers down to sustainable levels.
Sheryll Murray
How many migrant workers are from within the EU and how many are from elsewhere?
Damian Green
I am grateful to my hon. Friend for asking that question, because it enables me to puncture one of the great urban myths in the immigration debate, which is that most immigration comes from within the European Union. The net migration figures—which we will get down to the tens of thousands by the end of this Parliament—show that the vast bulk of immigrants come from outside the European Union. She asked about the numbers. In 2009, 292,000 non-European economic area migrants entered the UK and only 109,000 left. The House will see that the vast majority of net immigration comes from outside the European Union. Such immigration is precisely what we will take action on.
Karen Bradley
Will the Minister assure the House that the new proposals to control immigration will protect the interests of legitimate businesses?
Damian Green
I give that assurance to the House and, beyond that, to business. We held something that has been unusual in recent years: a consultation that genuinely consulted. We listened to business and changed the rules on inter-company transfers. That is also why we got rid of most of tier 1 and left a small remainder for the very exceptional. We now have a system that will not only enable us to get immigration to sustainable levels, but protect businesses and educational institutions that are vital to our future prosperity.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
In light of the concerns about immigration that the Minister has articulated, will he share his justification for this week’s news that front-line UK Border Agency staff at Liverpool port and John Lennon airport will be slashed by almost half?
Damian Green
The hon. Lady has heard me say in response to a previous question that there will be a reduction of more than 5,000 in the UKBA work force. We are ensuring that we use new technology and new working practices to make our border more secure than it was under the Government whom she used to support. I commend to her the very good Institute for Public Policy Research publication, “Immigration under Labour”, in which an adviser to one of Labour’s more successful Home Secretaries—
Mr Speaker
Order. The Minister of State will resume his seat. His purpose here is to answer questions about the policy of the Government, not that of the Opposition. I hope that that is now clear to him.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I know that some members of the coalition have trouble understanding what a pledge means, but after a bit of probing, the Home Secretary gave the House a commitment the other week to reduce immigration to tens of thousands by the end of this Parliament. Does that commitment still hold this week?
Damian Green
I think that the hon. Gentleman was in the House when my right hon. Friend the Home Secretary made that commitment. [Interruption.] No, she said by the end of this Parliament; I was here. All I can say to the hon. Gentleman is that I do not propose to go into the French accent that my right hon. Friend used, but I am more than happy to repeat the commitment that she gave the House on that occasion.
Shabana Mahmood (Birmingham, Ladywood) (Lab)
On that exact point, the Prime Minister has repeatedly promised that he will bring net migration down to the tens of thousands by the end of this Parliament. The promise was even included in the Conservative party’s pre-election contract with voters. However, in recent weeks it has been downgraded to an aspiration or an aim, most notably by the Home Secretary. Has the Minister been told whether his policy is a firm pledge or just an aim or aspiration? Which is it?
Damian Green
Our policy has been the same since before the election and is the same as it was when the Home Secretary stated it to the House in her announcement about the immigration limit.
Dr Julian Huppert (Cambridge) (LD)
Both the Home Secretary and the Minister have stated a commitment to ensuring that excellent scientists, engineers and academics will be able to come into this country. Will they revise the number of points available for PhDs compared with MBAs, and can the Minister explain how the tier 1 scheme will work for both established people and up-and-coming young people?
Damian Green
The tier 1 system is designed precisely so that we can ensure that we get the next generation of excellent scientists. As the Member of Parliament for Cambridge, my hon. Friend clearly has both interest and knowledge in the matter, and he will know that existing Nobel prize winners will get enough points to come in under the points-based system. Our new tier 1 is designed to ensure that the Nobel prize winners of tomorrow will be able to come to this country. We plan to ensure that objective, outside bodies decide who those people are, so that we get the best expertise in specialist fields not just among those coming into this country but among those who decide who comes to this country.
Paul Blomfield (Sheffield Central) (Lab)
7. What estimate she has made of the likely number of police community support officers at the end of the spending review period.
The Minister for Policing and Criminal Justice (Nick Herbert)
The number of police officers is not set by central Government, but we believe that forces can make savings to ensure that visible and available policing is secured for the public.
Mr Speaker
Order. I realise that the right hon. Gentleman was slightly out of breath or a bit uncertain in coming to the Dispatch Box, but I believe that he is seeking to group the question with Question 8.
Nick Herbert
With permission, Mr Speaker, I will take Questions 7 and 8 together.
Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)
8. What recent discussions she has had with police forces on the likely number of (a) police officers and (b) police community support officers at the end of the 2014-15 financial year.
Mr Speaker
I assume that the Minister had finished his reply, so I call Paul Blomfield.
Paul Blomfield
Will the Minister note that there are 337 police community support officers in South Yorkshire whose jobs are at risk because of cuts in both police and local government budgets? Those officers have made an enormous contribution to the reduction in crime and the fear of crime. Does he accept that people across the country would believe that money was better spent on those posts than on the £100 million that the Government propose to waste on police commissioners?
Nick Herbert
First, I should say to the hon. Gentleman that our intention is that directly elected police and crime commissioners should cost no more than existing police authorities. Of course there will be a cost for elections once every four years—an average of £12 million a year, which is less than 0.1% of the national policing budget. We are determined to do everything we can to protect front-line policing and the number of police community support officers. We think they do a very valuable job in our communities.
Mrs Hodgson
As the Minister is no doubt aware, Northumbria police force, which covers my constituency, has recently confirmed that it is to make 450 civilian staff redundant immediately and it is imposing a recruitment freeze on all front-line posts, all because of the cuts made by the Home Secretary. Does the Minister think that those cuts to front-line policing will make my constituents safer?
Mr Speaker
Order. Opposition Members’ hearing is playing tricks with them. They did not hear what they thought they heard.
Nick Herbert
Mr Speaker, I am in very good company today.
The hon. Member for Washington and Sunderland West (Mrs Hodgson) said that these were cuts to police staff. In all, there are more than 6,000 members of staff in Northumbria police force, including police officers, and I repeat that our determination is to do everything we can to support forces in making savings to the back office, in order to protect the front line and the visible and available policing that the public value.
Mr Matthew Offord (Hendon) (Con)
Will the Minister advise the House on what is to happen to the neighbourhood policing fund?
Nick Herbert
I am afraid I cannot give an answer to my hon. Friend right now. We will shortly be announcing the provisional police grant. At that point, we will tell the House what we plan to do with the neighbourhood policing fund.
Patrick Mercer (Newark) (Con)
I am sure that my right hon. Friend would like to congratulate the large number of regular police officers and police community support officers who have responded, often unpaid, to the crises of the past few weeks, including the bomb at east midlands airport, the violence here in Westminster and so on. In view of the spending review, how will we cope in future with the need for surging officers when those occasions occur?
Nick Herbert
As my hon. Friend knows, we prioritise counter-terrorism funding to policing, and it has received a measure of protection in the funding settlement. We will, of course, continue to prioritise it.
Ed Balls (Morley and Outwood) (Lab/Co-op)
The Minister for Policing and Criminal Justice is having a busy and rather stressful afternoon. I was hoping to ask the Home Secretary about police funding and numbers—and it looked like he thought that she would answer this question too. In any case, may I ask him about the Home Secretary’s Cabinet-level spending negotiations? I hope that she has filled him in on what went on. This week, the cross-party association of police officers wrote to the Home Office to ask for the spending review settlement for the police—20% front-end loaded cuts, followed by 6% next year and 8% the year after—to be reopened in order to
“avoid long term damage to policing capability”
and to protect the front line. Back in May, the Prime Minister told the BBC:
“Any Cabinet minister…who comes to me and says ‘here are my plans and they involve front line reductions’ will be sent back to their department to go away and think again.”
If the Prime Minister has not told the Home Secretary to go away and think again, will she listen to police chiefs up and down the country urging her to do just that?
Nick Herbert
I think that the right hon. Gentleman was referring to the Association of Police Authorities. The House might not have heard that he told the Home Affairs Committee seminar in Cannock on 22 November that this is a tighter environment for police spending and would be under any Government. He admitted that there would be cuts in police spending. We inherited £44 billion of unspecified spending cuts from his Government, and we are having to deal with the deficit, taking the decisions that he has forced upon us.
Ed Balls
The deputy to the Home Secretary will have to do a lot better than that. These cuts are front-end loaded and go well beyond the 12% over four years that Her Majesty’s inspectorate of constabulary said was do-able. I am pleased that he has not repeated the 11% smear against our police, which he knows is a completely corrupt and erroneous statistic. Hon. Members should look at the numbers. In north Wales, 230 officers are to go; in the west midlands, 1,100; and in Greater Manchester, 1,387. The chief constable of Greater Manchester police said that
“there will be a reduction in frontline police officer numbers”.
The Home Secretary was not willing to stand up for the police in the spending review, and she is not willing either to stand up in the House and answer my questions on the police. She can refuse to answer my questions, but she cannot refuse to answer the questions from police officers and the public all around the country. Today—
Nick Herbert
First, may I say that I am absolutely astonished by the right hon. Gentleman’s attack on the figure of only 11% of total police strength being visible and available to the public at any one time? That was the finding of a report by Her Majesty’s inspectorate of constabulary, and if he takes issue with it, perhaps he will speak to the inspectorate. I think it is disgraceful that he should attack the figure in that way. The report stated:
“The fact is that general availability, in which we include neighbourhood policing and response, is relatively low.”
The right hon. Gentleman also quoted the chief constable of Greater Manchester police. In announcing the changes that he was making to the force, the chief constable said that
“the end result will be more resources put into frontline policing and a more efficient and effective service for the people of Greater Manchester.”
Instead of scaremongering in this way, and instead of attacking the correction that we are having to make, perhaps the right hon. Gentleman will accept responsibility for bequeathing the deficit to this country that has meant that we have had to deal with public expenditure.
Julie Hilling (Bolton West) (Lab)
9. What funding her Department plans to allocate to the provision of youth services provided by her Department in the spending review period.
The Secretary of State for the Home Department (Mrs Theresa May)
I know that the hon. Lady, in the various posts that she has held over the years, has a wealth of experience in dealing with this area of youth services. Youth services are crucial in ensuring that our young people have the best possible chance in life and fulfil their potential. As I am sure she will be aware, the Home Office itself does not provide youth services directly, but we do contribute towards local youth crime prevention work, including youth offending teams, and we will set out our plans for future funding in due course.
Julie Hilling
The Secretary of State will be aware of the numerous studies that show that, where there is a well-funded youth service, there is a decrease in criminality. Now that youth services are being destroyed due to cuts to local government, education, health and Home Office budgets, leaving young people with nowhere to go and nothing to do, has she done a cost analysis of the effects of closures of youth centres on her departmental budget and on levels of antisocial behaviour?
Mrs May
I simply do not recognise the picture that the hon. Lady has set out in relation to youth services across the country. I would also remind her of the extremely effective point that my right hon. Friend the Minister for Policing and Criminal Justice made just now in response to the shadow Home Secretary—namely, that the Government have had to take the recent decisions on funding because of the mess that the last Labour Government left the finances in. We will be looking very closely at the support that we can provide in relation to specific issues about youth crime, to ensure that we are able to help young people not to go down the route of crime and to ensure that they are able to fulfil their full potential and develop the life that they deserve.
Andrew Bridgen (North West Leicestershire) (Con)
In my constituency, there are many voluntary organisations providing key services such as children’s centres and youth services. Does my right hon. Friend agree that it is essential to maintain the funding for those voluntary organisations that are doing such key work?
Mrs May
I pay tribute to the voluntary organisations that are doing key work in my hon. Friend’s constituency, and indeed in other constituencies up and down the country. This is a very good example of the big society in action. As he will be aware, the Government are putting support into voluntary organisations; £100 million is being made available to help voluntary organisations in the difficult times ahead.
Mr Marcus Jones (Nuneaton) (Con)
10. What her most recent assessment is of the performance of the Criminal Records Bureau in undertaking checks.
The Parliamentary Under-Secretary of State for the Home Department (Lynne Featherstone)
The Criminal Records Bureau has been consistently exceeding its performance targets for standard checks, completing over 95% in 10 days, but it has not been meeting its target for enhanced checks, which is to complete 90% of applications within 28 days. There has been an improvement over recent months, and the Criminal Records Bureau expects to meet its operational targets by April.
Mr Jones
I am grateful to my hon. Friend the Minister for that response. I would like to make her aware of a constituent of mine who, as a young girl aged just 12, received a police caution for a minor public disorder incident. Three years later, as a mere 15-year-old, the same young girl applied for a college course and was advised that, because she had been listed on a CRB check, she would struggle to access either a work placement or a university place. Does my hon. Friend agree that it cannot be in the public interest that a CRB check can so damage a young person’s life chances at such an early age?
Lynne Featherstone
I agree with my hon. Friend. Under part V of the Police Act 1997, all convictions, cautions, reprimands or warnings, both spent and unspent, held on the police national computer must be disclosed. Obviously, I cannot comment on this particular case, but young people’s life chances can be ruined by one incident when they were young. That is why these issues are being looked at as part of a review of the criminal records regime and the vetting and barring scheme.
Kevin Brennan (Cardiff West) (Lab)
Can the Minister confirm that anyone receiving an official caution is accepting their guilt and that, in reviewing Criminal Records Bureau checks, she should bear in mind the balance of risk and make sure that that is at the forefront of her thoughts on this issue at all times?
Lynne Featherstone
I have complete faith in the fact that the review will adopt a balanced viewpoint and understand all that it needs to look at.
Annette Brooke (Mid Dorset and North Poole) (LD)
14. What plans she has to allow local authorities to levy charges on pubs and clubs wishing to stay open late.
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
The Police Reform and Social Responsibility Bill, which was introduced last week, includes measures that will allow local authorities to charge a late-night levy. This levy will help to pay for police services and licensing authority services aimed at mitigating the impact the late-night economy has on the local community.
Annette Brooke
I thank the Minister for his answer. How will he ensure that the extra funding will be made available to police the night-time economy, particularly in places such as Bournemouth, which is within Dorset’s large rural police authority and where resources have to be concentrated in a relatively few hot spots—often, my constituents feel, to the detriment of the policing of other areas within Dorset?
James Brokenshire
I certainly recognise the pressures put on the police, often in the small hours of the morning, when it comes to dealing with issues surrounding the late-night economy. That is precisely why we have introduced the late-night levy in the Bill. When it comes to ensuring that moneys are protected for policing, we have said that 70% of the revenue, after administration costs have been covered, must go to the police for that purpose.
Greg Mulholland (Leeds North West) (LD)
16. What assessment she has made of the likely effects of the planned reduction in Government funding for police authorities in (a) England and (b) West Yorkshire.
The Minister for Policing and Criminal Justice (Nick Herbert)
The Government will propose individual force allocations to Parliament later this month. By cutting costs and scrapping bureaucracy, we will save both money and man hours, so I am confident that the spending review should not lead to any reduction in police officers visible and available on the streets.
Greg Mulholland
I thank my hon. Friend for that answer and accept the logic of what he says. May I bring it to his attention, however, that the proposed cuts in grant reductions will lead to 7.07% cut to West Yorkshire police, whereas it will lead to a 0.17% increase for Surrey police? By looking at damping the formula grant, could we not find a fairer way and ensure that all forces have approximately the same reductions in their funding?
Nick Herbert
My hon. Friend raises an important point about both the issue of damping and the contribution to police funding made by the precept. I am afraid that I cannot tell him any more about our plans right now, but we will make an announcement to the House very shortly.
Diana Johnson (Kingston upon Hull North) (Lab)
Perhaps I can help the House by quoting what the Minister said on “The World This Weekend” on Sunday 21 November. He said:
“There is no such link”
between police numbers and levels of crime. Let me ask the Minister, however, about a recent quote by the Home Secretary on special constables, as I do not have the opportunity to ask the right hon. Lady. We know that special constables are a valued extra resource for our police service. It has been reported that the Home Secretary said that she is looking to recruit an additional 50,000 specials, but does the Minister seriously believe that part-time volunteers can properly substitute for the core policing work of trained, full-time police officers and police community support officers whose numbers are being so savagely cut?
Nick Herbert
I repeat to the hon. Lady that I said that there was no simple link. She may have noticed that the former police chief of Los Angeles and New York was in this country last week. He wrote a number of pieces, which I think the hon. Lady should read. One thing he said was:
“It’s not so much the number of police you have… but what you do with them… You cannot spend your way to a safer community… Successful policing is not only about making the right investments: it’s about leadership and focus.”
I would suggest that Bill Bratton knows rather more about policing than the hon. Lady does. As to special constables, of course they are valuable and of course we would like to recruit more of them. They are not a substitute for what police officers do, but an important supplement.
Mark Lancaster (Milton Keynes North) (Con)
17. What plans she has for the future of the student visa system.
The Minister for Immigration (Damian Green)
As my right hon. Friend the Home Secretary announced in her statement to Parliament on 23 November, the Government will shortly launch a public consultation on proposed changes to the student visa arrangements. The proposals will result in a more selective system, and will reduce the numbers to support our aim of reducing net migration to sustainable levels.
Mark Lancaster
I commend my hon. Friend on the public consultation and subsequent review, but may I press him to ensure that the terms of reference will be broad enough to enable us to address the underlying causes of abuse, particularly bogus colleges?
Damian Green
I am more than happy to give my hon. Friend that assurance, because it is an extremely important point. I hope he will be encouraged to learn that since the Government came to office in May, we have revoked 24 tier 4 sponsor licences for bogus colleges, 40% more than the number revoked by the last Government. We have also discovered by researching the figures that in some sectors of the education world—especially private sector further education colleges—26% of students are not complying with the visas with which they entered the country. That means that tens of thousands of students are breaking the rules in some way each year. That is simply unacceptable, and we will deal with it.
Annette Brooke (Mid Dorset and North Poole) (LD)
T1. If she will make a statement on her departmental responsibilities.
The Secretary of State for the Home Department (Mrs Theresa May)
Last Tuesday, we introduced the Police Reform and Social Responsibility Bill. It makes provision for the new police and crime commissioners, who will ensure that for the first time the public have a greater say over how their community is policed. That will make forces truly accountable to the communities whom they serve, and will ensure that resources are targeted properly where they are needed.
Annette Brooke
Will the Home Secretary update the House on progress towards the ending of child detention in relation to immigration? What improvements can she make to ensure that family applications are processed at an earlier stage?
Mrs May
I am grateful to my hon. Friend for giving me the opportunity to confirm, first, that the coalition Government retain their commitment to ending the detention of children for immigration purposes and, secondly, that we will make an announcement before the House rises for its Christmas recess. One of the issues that we will be considering is how we can work with families at a much earlier stage of the application process to help them to negotiate the system.
Toby Perkins (Chesterfield) (Lab)
T6. In 1997, a 17-year-old girl in Chesterfield was raped. The offence remained undetected by the police for 12 years. Finally, a gentleman who was arrested and not charged was matched to it by the DNA database, and he is now serving time. Why is the Home Secretary more in favour of supporting someone like that than supporting use of the DNA database by our police to ensure that dangerous rapists are locked up?
Mrs May
I do not accept what the hon. Gentleman has said about what the Government are doing. The Government take a very simple view. The last Government wanted to hold the DNA records of innocent people, but did not even possess the DNA records of all those who were in prison. We will change that. We will establish the protections of the Scottish model in relation to the DNA database. DNA will continue to be a tool available to the police to secure convictions, but it is crucial for us to stop holding the DNA records of innocent victims without holding those of all the people who are in prison.
Mr Philip Hollobone (Kettering) (Con)
T3. What steps are being taken with the help of the French authorities to stop the steady flow of illegal immigration from the northern French coast into our channel ports?
The Minister for Immigration (Damian Green)
Very effective steps. I am grateful to the French Government for the changes that they have made, not just the closure of Sangatte some years ago but, more recently, the clearing of “the jungle”, the unofficial camp that was set up. We also have our own juxtaposed controls. British customs and immigration officers are standing on the French side of the border, not just in Calais but at the Gare du Nord and other rail points at which people can gain direct entry to Britain. That has had measurable results. The number of illegal immigrants caught in Kent in the area of the channel ports is now running at about a fifth of the previous level, so the extra controls are visibly working.
Fiona O’Donnell (East Lothian) (Lab)
T7. On Wednesday, responding to a question about correspondence sent by the UK Border Agency to asylum seekers in Glasgow who were tenants of the city council, the Under-Secretary of State for Scotland reassured the House that lessons had been learned. On the same day, a 34-year-old single mother received a telephone call from the agency telling her that she would have to move not within the promised 14 days, but within 24 hours. What further steps is the Secretary of State taking to ensure that what is said in this place reflects what is happening in Glasgow?
Damian Green
I am afraid the hon. Lady is completely misinformed about the facts of this case. She need not take that from me; she can take it from her own colleague, the Chairman of the Select Committee on Scottish Affairs, the hon. Member for Glasgow South West (Mr Davidson). He has been approached on this subject, as I have by many people. In response to an e-mail about it that he received, he wrote:
“It would…appear that the circular which prompted”
the e-mail he received
“was, at the least, not entirely accurate and thus mischievous.
Mrs Namir Rad’s move has nothing whatsoever to do with the”
Glasgow city council and
“UKBA contract termination, she was not given only 24 hours’ notice and her move is within her existing community area.”
He goes on to say:
“Scaremongering is not only unhelpful and misleading. It also undermines the credibility of any genuine appeals for help that are made.”
I completely agree with the hon. Gentleman on this matter.
Margot James (Stourbridge) (Con)
T5. It costs an extra £100,000 a year on top of normal policing costs to police Stourbridge high street late on a Friday and Saturday night. What plans does the Home Office have to protect the taxpayer from the costs of alcohol-related crime?
The Parliamentary Under-Secretary of State for the Home Department (James Brokenshire)
I am grateful to my hon. Friend for her question, which underlines the pressures that dealing with the problems of the night-time economy put on the police. Indeed, a recent study found that about 46% of officers highlighted the night-time economy as one of the main causes of their overtime payments. It is for precisely that reason that we are seeking to introduce the late-night levy in the recent Police Reform and Social Responsibility Bill. It will be for local authorities and local communities to decide how best to use that power, as well as other powers that are very much about giving control back to communities and promoting a responsible approach to alcohol, which, sadly, the previous Administration did not pursue.
Alun Michael (Cardiff South and Penarth) (Lab/Co-op)
In an earlier reply, the Home Secretary was a bit vague about the ending of the detention of children in removal cases. Does the commitment to end the holding of children in prison in those cases by Christmas still stand?
Mrs May
I was not at all vague. The commitment does still stand. I said in my earlier answer that the coalition Government’s commitment to ending the detention of children for immigration purposes still stands, and we will be making an announcement to this House before the Christmas recess.
Andrew Griffiths (Burton) (Con)
T8. The Minister will know that 50% of all violent crimes are alcohol related, and that 70% of alcohol is now sold through supermarkets and the off-trade. Given his commitment to tackling alcohol-related crime and binge drinking, does he not agree that the measures he set out earlier are weighted against pubs and that if he wants to take real action, they must be followed up with a ban on below-cost selling to tackle binge drinking?
James Brokenshire
My hon. Friend makes a very important and powerful point on the approach that needs to be taken to alcohol and why the Government remain committed to banning below-cost sales as set out in our statements in the coalition agreement. We will be bringing forward proposals in due course. It is also worth mentioning that the late-night levy will apply to the off-trade as well as the on-trade, and that it will give local communities the flexibility to provide discounts for businesses who are members of Best Bar None and similar schemes.
Mr Geoffrey Robinson (Coventry North West) (Lab)
Is the Minister aware that the chief constable of West Midlands police has already announced that there will be a reduction of upwards of 2,000 police officers in the west midlands? How much greater a reduction does he think the west midlands, and Coventry in particular, could take, in order to put to the test his absurd proposition that there is no link between police numbers and crime levels?
Mrs May
My right hon. Friend the Minister for Policing and Criminal Justice was absolutely clear that there is no simple link between police numbers and levels of crime. Indeed, that view was reiterated last September by the right hon. Member for Exeter (Mr Bradshaw)—and perhaps the hon. Gentleman could have a conversation with him about this very point as they are sitting next to each other on the Opposition Benches.
Dr Julian Lewis (New Forest East) (Con)
T9. In the WikiLeaks affair referred to earlier, was not the real problem that a low-level crime yielded such a high volume of confidential data? So is not the real lesson for the future that gigantic databases of this sort ought not to be created? Will the Home Secretary be spreading that lesson around relevant Departments?
Mrs May
As I said in response to an earlier question from my hon. Friend the Member for Henley (John Howell), the national security adviser has been in touch with Departments about the use of confidential information by the UK Government, asking them to review matters and provide him with assurances about their information security arrangements. I am sure that my hon. Friend the Member for New Forest East (Dr Lewis) will be aware that there is a balance to be achieved between the very real need for people to have access to information in order to be able to do their jobs properly and the need to restrict access to some of that information. That balance has to be achieved, and decisions are made on that basis.
Natascha Engel (North East Derbyshire) (Lab)
Police community support officers are arguably even more important in communities such as North East Derbyshire that are rural and isolated, so what impact does the Home Secretary think cuts to the budget of Derbyshire police force will have on community policing in constituencies such as mine?
Mrs May
We have been absolutely clear about the need for forces to ensure that the cuts are made to the back office, procurement, IT provision and so forth. Forces must focus, in line with what chief constables up and down the country are saying, on front-line policing—on visible community policing—which is of benefit not only to forces in terms of catching criminals, but of course to local communities.
Tom Brake (Carshalton and Wallington) (LD)
What discussions has the Home Secretary had with police forces about the potential to increase police visibility by, for example, reducing the 100 or so processes that the police and police staff have to go through between the reporting of a crime and the final appearance in court?
Mrs May
I am pleased to say that a number of discussions are taking place with police forces about how we can ensure that we bring greater efficiencies into the whole criminal justice system in order to get the benefits and make the gains to which my hon. Friend referred. I am not just discussing that with the police forces; together with the Police Minister, I am discussing it with the Attorney-General and the Lord Chancellor.
Paul Flynn (Newport West) (Lab)
Do the Government really intend to end the obligation for scientists to be members of the Advisory Council on the Misuse of Drugs? Will this not result in the failing Government drugs policy ending up being evidence-free and prejudice-rich?
James Brokenshire
I am grateful to the hon. Gentleman for his question, because it allows me to underline the importance that the Government place on scientific advice and the important role that the Advisory Council on the Misuse of Drugs plays in the formulation of our drugs policies. I can make it absolutely clear that our proposals are intended to add greater flexibility to the provision of advice given to government, in order to ensure that we are able to get more effective policies, given the changing nature of the drugs threat. The proposals were drawn up in conjunction with the Advisory Council on the Misuse of Drugs, and I should add that they have the support of the Government’s chief scientific officer, Professor John Beddington.
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Can the Home Secretary update us on how many more countries she has been able to make arrangements with so that foreign prisoners who have served their sentences can return to their home countries?
Damian Green
We are constantly in negotiation with all foreign countries where a significant number of prisoners are involved, and we now have charters going back regularly to Iraq, Afghanistan, Nigeria and Jamaica. We are continuing with and trying to expand this campaign, because it is extremely important that when foreign prisoners have finished their sentence, they return to their own countries and do not hang around in this country, as sadly they have been doing.
Fiona Mactaggart (Slough) (Lab)
In the discussion about reducing police numbers, the Home Secretary puts a lot of emphasis on visible policing, but some of the most effective policing is invisible. This morning, I attended a briefing by the Operation Golf team, which has dealt very effectively with child trafficking. Can she assure the House that resources will be available for the police to tackle human trafficking and that they will have sufficient numbers of officers to mount similar operations with other police forces in future?
Damian Green
I completely agree with the hon. Lady about the importance of the effectiveness of combating human trafficking. Indeed, she was on the Front Bench when I revealed that early next year, as part of the new national crime strategy, we will produce a new anti-trafficking strategy precisely so that all the forces of law and order can be more effective in combating that disgraceful and evil crime.
Gordon Henderson (Sittingbourne and Sheppey) (Con)
It has today been brought to my attention that all e-mails sent using the parliamentary system are redirected through computer networks in a foreign country. Will my right hon. Friend undertake a review of that arrangement to see whether there are implications for national security?
Mrs May
I have to say to my hon. Friend—I am looking at you, Mr Speaker—that I am not sure that responsibility for the processing of parliamentary e-mails is a matter for the Home Office. I think that it is a matter for the House of Commons Commission and the parliamentary authorities.
Phil Wilson (Sedgefield) (Lab)
On 31 October, on the “Politics Show”, the chief constable of Durham Constabulary, Jon Stoddart, said in answer to a question about the reduction in police budgets:
“Well what we are having to do is take more risks…That does not come without costs.”
What kind of irresponsible Government would make front-line police officers take more risks in their jobs?
The Minister for Policing and Criminal Justice (Nick Herbert)
The Government’s determination is to support police forces in England and Wales in making savings in the back and middle offices, by becoming more efficient, sharing services, improving IT, procuring together and so on so that they can protect the visible and available front-line policing that the public value.
Duncan Hames (Chippenham) (LD)
In relation to the use of control orders, the Government’s independent reviewer of terrorist legislation last week suggested that they should instead devise a new system. Will the Home Secretary heed his advice and replace them?
Mrs May
The review of counter-terrorism legislation is of course taking advice and representations from a wide variety of those who have interests in control orders and other aspects of counter-terrorism legislation. Indeed, the reviewer of counter-terrorism legislation has made his views clear to the review.
Andrew Gwynne (Denton and Reddish) (Lab)
Some 1,400 police officers and 1,500 police staff are to be axed from Greater Manchester police. Given that the Conservatives—and the Liberal Democrats, for that matter —locally pledged more not fewer police in the elections last May, will the Secretary of State take the opportunity to apologise on their behalf?
Nick Herbert
The test of the effectiveness of a force is not the overall number of people who are working in it but what those officers are doing. We share the determination of the chief constable of Greater Manchester police to protect the front line and to ensure that officers remain on the streets and available when the public want them.
Tony Baldry (Banbury) (Con)
Is not my right hon. Friend concerned that some 2,000 police officers—almost equivalent to a whole police force—are off on long-term sick and unable to work? In any other occupation, such employees would probably be retired as unavailable for work. I do not understand why those provisions do not apply, because otherwise we have a number of police officers on the books who simply are not able to work.
Nick Herbert
I share my hon. Friend’s concern. It is an issue and we have set up a review of police officer employment and conditions, headed by Tom Winsor, that will make its first report shortly.
Points of Order
(13 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr John Denham (Southampton, Itchen) (Lab)
On a point of order, Mr Speaker. On Tuesday, the House debated the need for more information on higher education policy, including the national studentship scheme. No information was forthcoming. Yesterday, a scheme was briefed to newspapers that means that students whose parents do not work will get reduced fees and students whose parents work but are on a low income will not get any help. What steps can you take, Mr Speaker, to ensure that we do not vote on Thursday without the House having all the necessary information about the Government’s higher education policies?
Mr Speaker
I am grateful to the right hon. Gentleman for giving me notice of his point of order. I have not been informed of any imminent Government statement on that subject, but there will be other opportunities to canvass these issues in the course of the week. I should be very surprised if further particulars of policy were not forthcoming before the vote on Thursday, especially as a Minister will be speaking in the debate—I rather fancy that the right hon. Gentleman will be speaking, too.
Vernon Coaker (Gedling) (Lab)
On a point of order, Mr Speaker. Is it in order for me to put on the record what the Minister for Policing and Criminal Justice said on “The World This Weekend” on 21 November when talking about the link between the increase in the number of police officers—
Mr Speaker
Order. In keeping with his usual courtesy, the hon. Gentleman asked whether it would be in order to put this matter on the record, so I feel I should put him out of his misery and explain that, no, it would not be.
The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)
On a point of order, Mr Speaker. You will recall that the hon. Member for Walthamstow (Stella Creasy) made a point of order last week, which was followed up by her and by the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) in last Thursday’s business questions, regarding the transfer of oral parliamentary questions. My office took this matter up with the relevant Department and the questions have now been answered. However, in last Monday’s point of order, the issue of transferring oral parliamentary questions was also raised. Having checked with the Department, I am assured that the questions were transferred within 24 hours of being tabled and that the relevant Members and the Table Office were notified. That is in line with the guidance given to Departments that oral questions should be transferred as soon as possible after tabling and never on the day for answer. My office has issued a reminder to parliamentary teams across Whitehall to ensure that best practice is always followed in this regard.
Mr Speaker
I am grateful to the Deputy Leader of the House for that. We cannot have an extended exchange on this particular matter, but because he referred—perfectly properly—to the hon. Member for Walthamstow (Stella Creasy), who was jumping up and down, if she wants to raise a point of order, I am very happy to hear and respond to it.
Stella Creasy (Walthamstow) (Lab/Co-op)
Further to that point of order, Mr Speaker. I would be happy to go through the details of those questions with the Deputy Leader of the House, but it simply is not true that they were transferred within 24 hours. Indeed, we were given days on which we would get answers but we were getting none and when we spoke to the Departments, they had no idea about the questions. I think that further investigations are merited and I hope you will support that, Mr Speaker.
Mr Speaker
There is now a dispute as to the facts but that cannot be the subject of extended points of order. I strongly suggest that the complaining Member and the responsible Minister or the Deputy Leader of the House should get together and try to sort this matter outside the Chamber.
Chris Bryant (Rhondda) (Lab)
On a point of order, Mr Speaker. [Interruption.] I hope that the Home Secretary will stay a moment longer before she leaves the Chamber. I realise that this is not for you, Mr Speaker, but I am sure that you will have read, over the weekend, the substantial coverage of the action that the Home Secretary has taken in relation to a researcher working for a Member of the House. I am sure that you would not want to comment on that because it is still sub judice—I understand that that person is appealing the decision—but it would clearly be a very important matter if an agent working for a foreign power were to be employed in the House. I hope that you can assure the House that the Home Secretary will seek to make an oral statement to the House when that process is finished and that you, as always, are keeping all the security measures in the House, including the vetting of potential researchers, under review.
Mr Speaker
Well, I think that someone once said of the hon. Gentleman that his mind climbs mountains without any molehills. He is always thinking ahead of himself and I am not surprised, as he has a great elasticity of mind, but he is seeking to draw me into matters beyond where we have reached and he is absolutely right in his initial supposition that we do not discuss security matters on the Floor of the House. He has registered his concern that the Home Secretary should be ready to make a statement if the eventuality he fears could happen, but should not, actually happens. I have a strong feeling that her office reads Hansard. I think that will probably do for today.
Mr Ben Bradshaw (Exeter) (Lab)
On a point of order, Mr Speaker. Will you investigate whether there is some extraordinary pact or audacious dare between Ministers and broadcasters to insert a particularly unsavoury word into their performances—before this virus is allowed to spread any further?
Mr Speaker
I am grateful to the right hon. Gentleman. That is not a point of order, but he has made the point with his characteristic subtlety.
Alun Michael (Cardiff South and Penarth) (Lab/Co-op)
On a point of order, Mr Speaker. I am sure that the Home Secretary wants to be accurate in her replies to the House and in view of a woolly reply that she gave to an earlier question, when I asked whether she stood by the pledge by Ministers to end by Christmas the holding in prison of children involved in removal cases—
Mr Speaker
Order. Let me anticipate what the right hon. Gentleman is likely to go on to say. I note the difference between the commitment that he is seeking and what the Home Secretary said, but as a very experienced Member of the House and former Minister, he knows that I am not responsible for the content of answers. What the right hon. Gentleman is about, of course, is trying to remind the House and his constituents of his dissatisfaction that his point was not answered as he would have wished. I think he has accomplished his objective, and we will leave it there.
Kevin Brennan (Cardiff West) (Lab)
On a point of order, Mr Speaker. Can you confirm that it is in order during a Division for hon. Members to walk through both the Aye and the No Lobby if they seek to register an active abstention? For those who are not sure how to vote on Thursday in the tuition fees vote, would that not have the advantage of allowing them to say that they voted both for and against it, depending on their audience?
Huw Irranca-Davies (Ogmore) (Lab)
On a point of order, Mr Speaker. I seek clarification for my constituent, Mrs Amanda Matthews, and myself. As the House knows, the whole House is on a three-month holiday through the summer, so it came as a great surprise that the Treasury received a letter from me on 4 August. I must have been working. The Treasury, however, must have been on holiday because there was no reply to that letter, or to the letters of 21 September, 13 October or 3 November. May I seek your guidance as to whether there has been some change in the Whitehall directive about answering MPs’ correspondence on behalf of their constituents? I am pleased to say that in the past two days I have received the answer, only four months after I sent the original letter.
Mr Speaker
That is not a matter for the Chair. I am grateful to the hon. Gentleman for giving me notice of his intended and what I will describe as attempted point of order. I appreciate his frustration at not receiving a satisfactory reply, although he says that he has now received one. He has made his point and it will have been heard on the Treasury Bench. For wider application, he might want to consult the Table Office about other ways of pursuing these matters in the event of receiving no reply or replies that he regards as excessively tardy.
Opposition Day
(13 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Local Government Funding
(13 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
21:59 - The House divided: - Ayes: 197 / Noes: 316 - Question accordingly negatived.
Caroline Flint (Don Valley) (Lab)
I beg to move,
That this House notes with concern that local councils will lose, on average, 27 per cent. of their funding over the next four years, compared to 11 per cent., on average, for Whitehall departments; regrets the frontloading of reductions in funding which means that the heaviest cuts will fall in the first year; believes that the unexpected severity of the cuts will result in substantial job losses in the public and private sector, undermine the voluntary sector and hit frontline services; regrets the inadequate level of capitalisation available to local councils to deal with redundancy costs of up to £2 billion; further notes the commitment in the coalition agreement to ensure that fairness is at the heart of decisions and that those most in need are protected; is disappointed that the most deprived areas will be hit hardest by the reductions in funding; and calls on the Government to revise its proposals before making the provisional finance settlement to ensure that any reductions in funding are more evenly spread over four years and do not fall disproportionately on the most deprived communities.
There is common cause across the House in recognising the need to reduce the deficit. Labour had a plan to halve Britain’s borrowing over a four-year period. That would have meant cuts in spending and would have resulted in reductions to local government funding, but not like the Government’s cuts. I will not let the coalition pass the blame for cuts of their choosing, their design and their timing on to us. Let me, once and for all, nail the myth that there is no alternative. The Government had a choice.
Sir Alan Beith (Berwick-upon-Tweed) (LD)
That would be a reasonable position for the right hon. Lady to adopt if she set out in some detail how Labour’s programme of cuts would impact on local government.
Caroline Flint
We are dealing with a package, which is what local councils will face. Even on the coalition Government’s most extravagant predictions of what we might have cut, with which I do not concur, the cuts proposed by the coalition Government, of whom the right hon. Gentleman is an ally, would have meant another £2.2 billion worth of cuts over a four-year period, and they are front-loaded in a way that is dangerous for local communities and the services that they need.
Mr Dave Watts (St Helens North) (Lab)
Is my right hon. Friend amazed to hear that question, bearing in mind that the Government have not announced what cuts are to take place? It is likely that local authorities will not know that until December, giving them just a few months to adjust the budget.
Caroline Flint
My hon. Friend is right: we do not know what the settlement announcement will be at this stage, but what we do know is that local authorities have been told that they will face cuts of 27% in their funding over a four-year period. As I will set out in more detail, much of that is being front-loaded in an incredibly short period of time, which makes no sense at all.
Mr Jim Cunningham (Coventry South) (Lab)
Does my right hon. Friend realise that Coventry city council, for example, will lose not only front-line staff, but £45 million over the next two or three years in different types of grants? Is that not an horrendous thing to inflict on the people of Coventry?
Caroline Flint
It is absolutely dreadful. As we will see in this debate, not only are the cuts unfair for the whole of local government; they will attack the poorest communities up and down the country. That is neither fair nor right, and it is not something that we would have done. This Government had a choice. They have chosen to cut deeper and faster, taking a huge gamble with jobs and growth. They could have shared the reductions in spending between Whitehall and town halls, but instead, they have chosen to dump cuts on local councils up and down the country. The Government could have spread the cuts evenly over four years, giving councils time to plan where savings could be made, but instead they chose to front-load them, so that councils are crippled by the heaviest cuts falling in the first year.
Rehman Chishti (Gillingham and Rainham) (Con)
Does the shadow Secretary of State agree that a freeze in council tax will help hard-pressed families, who were hit by the previous Government’s year-on-year increases in council tax bills?
Caroline Flint
The irony of the hon. Gentleman’s point of view is that the most affluent areas will benefit from the freeze in council tax and the transition payments that the Government are providing. Those in the poorest areas, with the lowest amount of take from council tax, will have a double whammy, because to pay for the council tax freeze, the 2.5% is being top-sliced from the formula grant. The Government could have ensured that the cuts were spread fairly, but their choice was not to do so. Those are the risks that they are prepared to take. The danger is that communities up and down the country will pay the price, and we will not let the Government forget it.
Hazel Blears (Salford and Eccles) (Lab)
Is my right hon. Friend aware that the chairman of the Tory party, Baroness Warsi, said to the Manchester Evening News in September:
“Regions like Greater Manchester will not suffer disadvantage under the coalition government…If anything the regions will be protected and supported to ensure they grow”?
With Salford council facing £40 million to £45 million of devastating cuts and West Oxfordshire district council—which contains Witney, the Prime Minister’s constituency —getting a 37% increase, how can this possibly mean that regions such as Greater Manchester are to be protected?
Caroline Flint
As usual, my right hon. Friend makes an excellent point, based on facts, and the facts are that the cuts to local government will have a devastating impact on our poorest communities. Not only that, but local authorities up and down the country, of whatever political persuasion, are facing a huge task in having to tackle the front-loading of cuts in a matter of weeks, which is not good for either services, jobs or communities.
The Government like to talk about localism—about devolving power to local councils and empowering local communities. In fact, the coalition agreement boldly states that the Government will
“promote the radical devolution of power and greater financial autonomy to local government and community groups.”
Well, the cuts have come, but we are still waiting for the localism. For all their talk of localism, this Government have imposed the largest cuts to local government funding for a generation—cuts that are much deeper than those to other Departments or those originally forecast in the Budget in June; cuts that fall heaviest in the first year and hit the most deprived communities. So much for fairness, localism, and devolving powers to local councils and community groups. The only thing that this Government want to devolve is the blame for difficult decisions.
Joan Ruddock (Lewisham, Deptford) (Lab)
I wonder whether my right hon. Friend recalls the Chancellor saying:
“I am not going to balance the budget on the backs of the poor.”
Does she agree that what we are seeing is breathtaking hypocrisy?
Caroline Flint
I do, and whether in local government, education or health, it is the poorest and vulnerable who are being hit the hardest, as well as those hard-working families who pay their way, but who also depend on local services to provide for themselves and their families. They do not ask for much from the Government, but they ask for them to be on their side—to make sure that work pays and that they can look after their families—and this Government are not providing that security. The whole House knows why that has happened—why local councils will lose almost one third of their funding over the next four years.
Simon Hughes (Bermondsey and Old Southwark) (LD)
A debate about local government is welcome, because local government and its financing are important, but as the right hon. Lady launches her attack on the Government, as she is entitled to do, will she make her position clear,? Did not her Government, when in office, say that there would be a £52 billion cut in public services? How much of that would have fallen on local government? Was the decision to end the working neighbourhoods fund and to cut regeneration funding not taken in March by her Government’s Chancellor of the Exchequer, when he was in office?
Caroline Flint
On the working neighbourhoods fund, I am afraid that the hon. Gentleman has fallen into his Tory coalition partners’ trap. The Tories say, and he repeats the claim, that we planned to scrap the working neighbourhoods fund and had already cut money from it. In the March Budget we did announce savings, including £300 million through rationalising the regional development agencies, but we clearly distinguished between those programmes that were not a priority and would therefore be scrapped and those, including the working neighbourhoods fund, to which we were committed but would look to find savings in. It was a three-year programme in which, in November 2009—[Hon. Members: “Three years.”]. Three years’ funding is more than the one year that we used to have under Tory Governments, and more than the non-existent funding that poorer communities had under the Tory Government from 1979 to 1997.
Indeed, in November 2009 we announced a £40 million boost to the fund, worth £1.5 billion from 2008-09 to 2009-10. Of course, we had to look at programmes, but there is no evidence whatever to suggest that we would have scrapped the working neighbourhoods fund. That is not the case.
Robert Halfon (Harlow) (Con)
The right hon. Lady talks about devolution, but her Government took £13 million out of the housing budget in Harlow, where 45% of housing is social housing. The current Government are ending that and guaranteeing Harlow housing money for Harlow people.
Caroline Flint
I am afraid that is rubbish. The Labour Government, in so many different ways, contributed not only to boosting the refurbishment of homes that had been left to languish for too many years under the Tory Government, but to ensuring that there were ways and means for local councils, with other housing providers, to provide more homes.
The National Housing Federation, I think I am correct in repeating, says that, once the homes that Labour funded in its last period in office have been built, under the coalition Government’s plans, no more homes will be built. In relation—[Interruption.] The Minister for Housing and Local Government says “nonsense”, but let us just wait and see, because even in a time of recession, it was Labour money that worked in partnership with others—[Hon. Members: “Taxpayers’ money”.] It was taxpayers’ money with which a Labour Government decided that we should promote the building of more social homes. Even in the teeth of recession, I think we built at least 55,000 homes to provide for people who could not afford a house on the private market.
We all know why that front-loaded package is happening: because the Secretary of State gives the impression of being more interested in trashing local councils, chasing cheap headlines, calling councillors stupid or lazy and telling local authorities to grow up. The hundreds of thousands of decent, honest, hard-working people who work in local government, and the millions of people who depend on the services and support that they provide, hardly seem to warrant a second thought, but they will be the ones who pay the price for this Government’s decisions.
To make matters worse, local councils are being forced to make deeper cuts than they expected and to do so much quicker, because the reductions in local government funding are front-loaded. As much as 50% of the cuts could fall in the first year. Councillors are looking at cuts of 14%, 16% or 18% to their budgets within weeks, but the Secretary of State still denies it. He says that it is a fiction, but he is about the only person left who still thinks so.
Sir Paul Beresford (Mole Valley) (Con)
I hope that the right hon. Lady will not forget that from 1997 onwards the then Deputy Prime Minister, the Secretary of State responsible for local government funding, changed the formulas three times, each occasion moving money north to Labour authorities and away from London and the south-east. In one year, the year-on-year effect in Surrey, for example, was a £39 million loss.
Caroline Flint
I think I am right in saying that, for every year we were in power, there was an above inflation increase in local government spending. I am not going to apologise for trying to show leadership in addressing need, inequality and poverty in this country. Perhaps that is something that the Secretary of State and his hon. Friends on the Government Front Bench do not want to champion anymore.
Lyn Brown (West Ham) (Lab)
My right hon. Friend talked about the cuts being front-loaded. Figures from Newham council suggest that a large proportion of the nearly £40 million cuts for Newham—13% of the 25% total cuts that are being proposed by the Government—will take place in year one.
Caroline Flint
That is another example of the devastating impact of the cuts in the first year. I say to the Secretary of State: is that a fiction?
Caroline Flint
I am very much looking forward to the missives I can hear being typed out in town halls in London and across the country to put the Secretary of State right on that one.
Mr Watts
Is my right hon. Friend aware that the changes to the grant system are only putting right what the previous Tory Government had done? When I was the leader of St Helens council, the then Tory Government, in one year, took more than £13 million of grants from St Helens—a deprived community—to give to their friends.
Caroline Flint
As he did during a Westminster Hall debate last week, my hon. Friend lays out the real choices that are being made here about fairness and unfairness. What is happening is unfair and is not right.
Stephen Lloyd (Eastbourne) (LD)
Talking of hypocrisy, does the right hon. Lady agree with her party’s leader, the right hon. Member for Doncaster Central, who said on the “Today” programme in April, “as we look forward” regeneration spending is
“not the biggest priority we face”
as there are “other competing priorities.”? Is that not hypocrisy writ large?
Caroline Flint
The constituency of the leader of the Labour party is actually Doncaster North not Doncaster Central.
As I opened the debate, I did not hesitate for a moment to say that reductions and cuts would have had to be made. The question is how much, how deep and how fast. It is not just Labour politicians who are saying that; the chair of the Local Government Association, Baroness Eaton, a Conservative peer said:
“The unexpected severity of the cuts that will have to be made next year will put many councils in an unprecedented and difficult position.”
I could not have put it better myself.
Caroline Flint
I will give way shortly.
Grahame Lucas, the President of the Society of District Council Treasurers, said that front-loading was happening —not that it was fiction, Mr Secretary of State—and that its consequences would be disastrous. Even the Secretary of State’s Parliamentary Private Secretary, the hon. Member for Wimbledon (Stephen Hammond) knows that there is a problem. At County Councils Network conference on 22 November, he told council leaders that front-loading
“has exercised ministers for some time”.
He asked them to “wait for the settlement.” Who knows, perhaps today’s debate and the cries from their own people across the country will have an impact. Today, we are trying to tell the Government that they should listen and try to do something to avert the disaster that will happen in a few weeks’ time.
Andrew Percy (Brigg and Goole) (Con)
I thank my constituency neighbour for giving way to me. May I say gently and in the most friendly way possible, that I served on a metropolitan northern authority for 10 years and the picture was not quite as rosy? Although there might well have been some extra resources, all too often, what came with that were huge burdens that were not fully funded—whether that was free swimming, local bus passes or whatever. Local tax payers, who are some of the poorest tax payers, had to pick up the bill.
Caroline Flint
The hon. Gentleman is indeed a neighbour of mine in Yorkshire. Correct me if I am wrong, but I cannot remember that there were many Tory-controlled councils that did not want free swimming when it was being offered or that did not want a number of other benefits for their communities. However, I would have to say to the hon. Gentleman, in the nicest possible way, that if people thought it was not rosy then, they must now be in despair about what is ahead.
We are hearing from councillors of all parties that if councils are not given enough time to plan which cuts to make, they will be forced into making rushed decisions with no time to plan for the consequences, which could end up costing more than they save.
Caroline Flint
I will give way shortly to hon. Friends and to Government Members. I want to be generous because this is such an important issue.
The Secretary of State—I agree with him on this—wants councils to think how they might transfer assets to the community, which we enabled when we were in government, and involve voluntary groups and share back-room functions, which we also encouraged when we were in government. There is absolutely nothing wrong with the principle, but it cannot be done in a few rushed months: it takes time and planning, which the Government refuse to give to local authorities. As a result, the worry is that councils will simply go for the easiest and quickest cuts instead of thinking about how they save money while minimising service cuts and job losses.
Henry Smith
The right hon. Lady said that we are apparently yet to see any localism or devolution to local government, but does she concede that greater flexibilities and the ending of the ring-fencing of many budgets will give exactly the flexibilities that many local communities need? It will certainly be welcomed by my local authority, West Sussex county council, which suffered eight years of the lowest possible Government settlements under the previous Government.
Caroline Flint
I recognise the hon. Gentleman’s experience in local government; I believe he was leader of West Sussex county council.
The Secretary of State says that local councils have a choice:
“They can panic; they can slash and burn services regardless of the impact that will have. Or they can take the opportunity to completely rethink everything they are doing, creating a modern, flexible and innovative council.”
Councils should be modern and should embrace flexibility and innovation, but by imposing such huge, unprecedented front-loaded cuts on them he denies them that very choice. How can councils completely rethink everything in a matter of a few weeks?
Mr Cunningham
Does my right hon. Friend think that we have here a re-run of the ’80s, when the Conservatives cut the rate support grant and the housing allocation, local authorities were forced to sell old people’s homes and there were reductions among teachers and front-line staff. The House should not be filled up with that lot over there—they are using the recession as an excuse to inflict Thatcherite policies. Last week the Prime Minister admitted to being a child of Thatcher. Does not this House recognise what is going on right under its nose?
Caroline Flint
It is actually worse than the ’80s, because these cuts are deeper and faster, and they leave local government with very little choice. There are positive aspects to devolving power; we did a lot of it while we were in power. [Interruption.] It is true. I know that the Secretary of State likes to issue his diktats from the Department like some Joe Stalin, but rewriting history is a stretch too far.
Hazel Blears
My right hon. Friend is making a characteristically powerful case against the front-loading of these cuts. I ask her, as I hope to ask the Secretary of State, to consider whether, as there is apparently likely to be a £3 billion surplus in national non-domestic rates, it would be a good idea to distribute that sum to smooth out the effects of the cuts next year and the following year. Would that not seem to be an eminently sensible course of action that may well commend itself across the House?
Caroline Flint
I understand that the Secretary of State has had a letter from John Merry on this important issue. What we are asking is pretty reasonable. We are saying: “Have another look. See whether you can stagger these cuts in a better way. See if you can dampen the cuts to tackle inequality, but also look at other opportunities that are available to get this right by minimising the impact on front-line services and the unnecessary loss of jobs.” That is what we are talking about: the people who will pay the price in their jobs.
Mr Gordon Marsden (Blackpool South) (Lab)
My right hon. Friend rightly talks of what we did in government. Does she share my amazement and that of many hon. Members at the joviality of Government Members? In their first few months in office, the Government ignored the impetus that had been created by the Labour Government with Total Place? The Government had to be dragged, screaming, by their advisers to reconsider, and even then they renamed it.
Caroline Flint
There is a rewriting of history with regard to these good ideas. When I picked up one of the Sunday newspapers to read about changes to planning, I recognised a few changes that had been initiated when I was Minister for Housing and Planning and had been carried on by my right hon. Friend the Member for Wentworth and Dearne (John Healey). Total Place was a very good idea. It was a system by which different organisations came together in common cause to tackle challenges in the community, and to share their funding and budgets. The scheme has had two names since the coalition Government came to power: place-based budgets and community-based budgets. The fact is, it was our idea. I am sure that my hon. Friend the Member for Blackpool South (Mr Marsden) will agree that such innovation is all very well, but that it is difficult to imagine the Total Place concept hitting the ground running in the context of the cuts faced not only in local government but in policing and through the reorganisation of primary care trusts.
Mr Rob Wilson (Reading East) (Con)
The right hon. Lady is being most generous in giving way. May I clarify her position on cuts? She seems to be saying that her party would cut more slowly than the Government. Does she understand the implications of that? It would mean the Government borrowing more and paying more interest, because they would be borrowing over a longer period. Does she really think that taxpayers would thank a Labour Government for paying back money on their behalf to foreign Governments such as the Chinese Government?
Caroline Flint
The price being paid in this country is that of people being put on the dole and therefore not paying tax. The price will be paid by local economies and private businesses that depend on local government contracts and by the voluntary sector, which depends on local government to fund its services. There are prices to be paid and choices to be made. We would not have chosen to front-load the cuts in such a way as to fundamentally break the fabric of our communities.
Organisations that research this issue have shown that parts of the country, through no fault of their own, depend on public sector jobs to keep their communities afloat. Despite all the warm words in Government statements, the coalition agreement and the comprehensive spending review document about fairness and protecting the most vulnerable communities, there has been little sign in the statements of the Secretary of State, the Chancellor and the Prime Minister of how they will ensure that the cuts do not disproportionately affect our poorest communities. I hope we will hear something in the financial settlement. That is why we are having this debate today. At the moment, I am afraid that Government Front Benchers are not listening.
John Woodcock (Barrow and Furness) (Lab/Co-op)
Does my right hon. Friend appreciate the alarm that the people of Barrow and Furness are experiencing? According to modelling in yesterday’s Local Government Chronicle, their community could be among the top three places in the country to experience the deepest cuts, despite its having many of the most deprived areas.
Caroline Flint
My hon. Friend’s point about his constituency applies to others. It is clear that some of the most deprived communities in our country face the biggest impact and the brunt of the cuts, not those who are better off. I wish that every area was better off, but it is not like that. That is why we must tackle inequality and be fair. We must be a civilised and decent society, but that is not what is going on.
Catherine McKinnell (Newcastle upon Tyne North) (Lab)
Does my right hon. Friend share my concern that it is not only deprived communities that will suffer because of the way in which the cuts are being implemented, but women—and thereby children—because they make up approximately 73% of local authority employees?
Caroline Flint
My hon. Friend hits the nail on the head. About 74% of those who work in local government are women. It is rather ironic that on the day the Fawcett Society is again challenging the coalition Government’s Budget in court because of its disproportionate effect on women and children, women are yet again being asked to pay the price. Women who work in local government, often part-time at the lower end of the pay scale, face the complete disruption of their family and working life.
Caroline Flint
I have been very generous in taking interventions, and I am conscious of the number of Members who wish to speak in the debate. [Interruption.] I do not think that hon. Members can accuse me of not being generous in giving way. I will take more interventions later, but I should like to make a bit of progress.
Caroline Flint
The hon. Gentleman heard what I had to say—I am going to make a bit of progress, but I may take more interventions later.
People will pay the price with their jobs. The Secretary of State likes to give the impression that savings can be made without causing job losses, as though simply by freezing recruitment, natural wastage, redeploying people and scrapping or sharing back-room functions, local councils will find the savings they need to make without hitting front-line services. Local councils cannot deliver such savings so quickly on top of the £1 billion of savings they have already made this year without cutting jobs or reducing services. Paul Carter, the Tory Kent council leader, said:
“There is only one way of bringing budgets into line. One is to employ less people and the other is to do fewer things.”
In fact that is two, but I take his point. Up and down the country, local authorities are already cutting vital front-line services and shedding staff.
Andrew Bridgen (North West Leicestershire) (Con)
Will the right hon. Lady give way?
Caroline Flint
No, I will not give way.
Councils are cutting not just staff in back-room functions but teaching assistants, social workers and street cleaners—hundreds of thousands of people delivering essential front-line services. There will be 140,000 of them this year alone, according to the Local Government Association, which has upped its prediction from 100,000. In Birmingham, 26,000 staff have been warned that they could lose their jobs, and in Bradford the figure is 10,000. They, along with the people who depend on the services they provide, will pay the price for the coalition Government’s choices.
It is no good the Government trying to use last week’s Office for Budget Responsibility forecast to obscure the heavy job losses that will be inflicted on local government. The OBR forecast shows that Whitehall Departments will lose fewer staff than had been feared, because the cuts were slightly less than had been predicted in the Budget. However, the cuts to local government are deeper and faster than had been expected, and, as a result, the LGA says that more workers, not fewer, will lose their jobs this year—40,000 more of them, all because the Government chose to impose such heavy front-loaded cuts on local councils.
Caroline Flint
No, I will not.
It is unclear how local councils will meet the costs of laying off so many staff. The LGA believes that redundancy costs alone could be as high as £2 billion, but the Government’s capitalisation arrangements, which were set up to help councils with the cost of cutting jobs, come to only £200 million. That could be as little as one tenth of what is needed. If councils are not given more support and more flexibility to cover the costs of redundancy payments, it will simply mean more cuts elsewhere and ever deeper cuts to vital front-line services.
Local councils cannot deliver the savings they need simply by trimming a few salaries at the top, scrapping council newspapers or encouraging councils to dip into their reserves. Local councils have a duty to find the best deal for council tax payers, which includes ensuring that councils’ executives are not paid over the odds. Labour introduced more transparency in chief executive pay, and restraint is vital, particularly in the current economic climate. It is absolutely fanciful, however, to suggest that reducing a handful of executive salaries across the country will solve the problem of huge front-loaded cuts, and the Secretary of State knows it.
Harriett Baldwin (West Worcestershire) (Con)
Will the right hon. Lady give way?
Caroline Flint
In a moment.
Nor is encouraging councils to dip into their reserves any sort of solution. As the Secretary of State well knows, most of the money is already earmarked for specific purposes. I had a look at the reserves in Ministers’ areas compared with those of our shadow team and found that their areas have £100 million more reserves in their bank accounts than ours. Burnley, one of the areas likely to be hit hardest by cuts in funding, could lose anything between 25% and 29% of its funding over the next four years, and it has just £1.1 million in unallocated reserves. Unless the Secretary of State wants to nationalise council reserves and redistribute them to the councils hardest hit by the cuts, this is just another red herring.
Caroline Flint
I will give way shortly—and I will give way to the hon. Member for West Worcestershire (Harriett Baldwin) shortly too, because she caught my eye as well.
Let us be in no doubt that cuts of this magnitude and imposed this quickly will hit front-line services. Roads damaged last winter will go unrepaired this year, too; potholes will go unfixed, pavements will go unswept, street lights will be turned off, youth clubs will close, libraries will shut and, at a time when more people than ever need help with social care, fewer will find their local council able to help.
Harriett Baldwin
The right hon. Lady mentioned a handful of council chief executives who make significant salaries. In fact, a total of 129 make more money than the Prime Minister.
Caroline Flint
What I said is on the record. I am not going to defend some of the pay in local government, but the Secretary of State has appointed a new permanent secretary on, I think, £170,000 a year. He had the chance to ensure that he earned less than the Prime Minister, but he refused to do so. To claim that chief executives’ pay equates to the level of cuts that local government is facing is to live in fantasy land—it is ridiculous.
The poorest communities will be the hardest hit. The Government have made much of their commitment to fairness. The coalition agreement reads:
“Difficult decisions will have to be taken in the months and years ahead, but we will ensure that fairness is at the heart of those decisions so that all those most in need are protected.”
Those are fine words, but the Secretary of State’s own figures show that the councils worst hit over the four-year settlement include Hastings, Burnley, Blackburn with Darwen, Hull, Barrow-in-Furness and Hartlepool—all in the 10% most deprived councils in the country—along with Liverpool city council, which is the most deprived local authority in England.
Julie Hilling (Bolton West) (Lab)
Does my right hon. Friend agree that it is unbelievable and wrong that children and young people in particular are facing enormous cuts? Youth services throughout the country are being destroyed, and youth workers throughout the country are getting their redundancy notices. Young people are only young once and need support and services now—it is no good their having them in the future—and they should not be paying a disproportionate cost in the cuts.
Caroline Flint
I am afraid that the coalition Government clearly do not care. On top of what they are doing to local government, they are scrapping the education maintenance allowance, which is the best chance to get young people to stay on in education or training at 16 and possibly go on to university or other further education courses. They have scrapped the future jobs fund and the working neighbourhoods fund, much of which was directed at ensuring that young people did not leave school and enter a period of inactivity, whether out of work or training and education. They simply do not care.
Stephen Mosley
From what the right hon. Lady said, it seems that the more prudent councils have been preparing for this day for a couple of years, but many councils across the country have not been so prudent. Should she not aim her anger at councils that have been wasting money, increasing council tax and providing poor services over the past few years, rather than at Government Front Benchers, who are trying to do something about it?
Caroline Flint
Here we go again—let us bash local government and local councillors up and down the country trying to do their best, and let us tell them it is their fault. I do not think there is a local authority in the country that was preparing for this level of cuts. The suggestion is quite ridiculous.
Gordon Birtwistle (Burnley) (LD)
As the MP for Burnley, which has been mentioned on numerous occasions, I would like to advise Members that the Liberal Democrat-controlled council is doing its best under the circumstances. Does the right hon. Lady remember that in the last three years of the Labour Government Burnley received a 0.5% increase in grant from national Government? The Labour Government nailed councils to the wall in their last three years by not financing them properly. It is strange that she is having a go at the coalition Government given that Labour bankrupted the country in the first place.
Caroline Flint
I would rather defend an increase, no matter how small, than defend the indefensible, as is happening here today.
Let us look at the disparities. As I have said, a number of councils, including Burnley, are facing the most devastating cuts. At the same time, a handful of district councils in the south-east, including South Cambridgeshire and West Oxfordshire—two of the least deprived areas in the country—could see not a reduction but an increase of up to 30% in their funding, as a consequence of funding that was previously ring-fenced for deprived authorities being rolled into the overall grant.
Graham Jones (Hyndburn) (Lab)
I am delighted that my right hon. Friend has managed to give way. She mentioned Burnley, the neighbouring constituency to my own. Housing market renewal worth £9 million to Burnley and £8 million to Hyndburn has just been cut, and the working neighbourhoods fund, which is worth £2 million, has also been slashed. Burnley borough council has been funded in the past two or three years by enormous sums from the Government, as has Hyndburn, and I do not accept the point made by my colleague, the hon. Member for Burnley (Gordon Birtwistle).
Caroline Flint
It is always helpful to have a wider debate, and I thank my hon. Friend for that contribution.
Caroline Flint
I have already given way to the hon. Gentleman, and I will not do so again.
How is it fair that the communities most reliant on public sector employment will lose the greatest number of jobs? How is it fair that the areas most in need will find their services most cut? How is it fair that the communities least able to shoulder the brunt of cuts to local councils will bear the heaviest burden? Yet that is exactly what will happen, as the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill) let slip earlier in the year, when he said:
“Those in greatest need ultimately bear the burden of paying off the debt”.—[Official Report, 10 June 2010; Vol. 511, c. 450.]
The same is true of the Government’s plans for a council tax freeze. It might sound fair, but it is not, because it gives the most to the wealthier councils with the biggest council tax yield—the councils with the broadest base of middle and high band properties—and the least to poorer councils with more modest properties. This involves money that has been top-sliced from local councils’ funding, resulting in a double whammy for our poorest areas.
It is not just people who work in local government who will lose out. Hundreds of thousands of people across the country who work in the private sector—plumbers, builders, electricians, IT companies and office suppliers—depend on local council contracts. Local councils spend nearly £35 billion every year procuring services and supplies from the private sector, with more than £20 billion going to small and medium-sized businesses. Some of those firms rely on public sector contracts for 50% or 60% of their business, and if local council contracts dry up, some of them will have to lose staff and might even go out of business altogether. PricewaterhouseCoopers forecasts that for every job lost in the public sector, another will be lost in the private sector, so cuts in local government funding will hit not just those who work in local government and those who rely on its services, but the wider local economy.
What of the Government’s suggestion that if local councils do less, voluntary groups will miraculously emerge and seamlessly fill the gap left by local authorities? The week before last, the Secretary of State warned the House that local councils would “rue the day” they cut funding to voluntary organisations, but what choice will they have? When nearly a third of voluntary organisations rely on funding from local authorities, and local authorities are losing nearly a third of their funding—much of it this year—voluntary groups will lose out. Local councils and voluntary groups are not adversaries—they work together and rely on each other. Voluntary groups reach parts of the community and fulfil certain roles that local councils sometimes cannot, and local councils have the resources and support at their disposal that voluntary groups do not always have. Without each other, they are both weakened.
Christopher Pincher
I am indebted to the right hon. Lady for giving way. It is nice to hear her support for the big society and voluntary groups, but she seems to have rather a selective memory. May I remind her of the BBC report published on 1 March this year, when her party was still in government? It stated that very significant cuts in local government would have to be made, whichever party was in power, to deal with the depth and scale of the recession that her Government had created. The right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) also said that there would have to be economies. With friends like those, does she need enemies?
Mr Speaker
Order. Before the right hon. Lady responds, I will make two points. First, interventions are becoming rather long and need to get shorter. Secondly, for the good conduct of the debate, I want to touch on an earlier intervention by the hon. Member for Eastbourne (Stephen Lloyd). I did not hear it clearly at the time, but reference was made to the alleged hypocrisy of another Member. Such references must not be made on the Floor of the House. Making a personal accusation of hypocrisy is disorderly. I recognise that the hon. Gentleman is a new Member, but I hope that what I have said will be helpful for the House as a whole.
Caroline Flint
Thank you, Mr Speaker. I will not hold the hon. Gentleman too harshly to account for what he said in the heat of the debate.
We must recognise that the deficit has to be reduced—and we do. [Interruption.] We have been very clear about that. There are choices to be made, however, about how far and how deep the cuts should be. What does the hon. Member for Tamworth (Christopher Pincher) have to say to Baroness Margaret Eaton, Tory leader of the Local Government Association, who only last week issued a press release on the “unprecedented” levels of the cuts and the impact of front-loading? It is not just Labour people talking about this—[Interruption.] I hear an hon. Gentleman shout “What would you do?” from a sedentary position. We would not front-load the cuts in this way for a start, and we would not have gone as deep.
Caroline Flint
I am afraid that there is another motivation, and it has absolutely nothing to do with the deficit. I think I am right in saying that the Office for Budget Responsibility report suggested that a surplus would start to appear in a few years’ time. Given how the coalition Government like to sing from the rafters about OBR reports, it is a shame that they do not think about areas where they could use that information to minimise the damage of the cuts that local authorities face and adopt a much more thoughtful approach to their impact on the ground.
There is no doubt about it—the impact on local communities up and down the country will be harsh and, I think, undeserved. Whatever plans local authorities might like to make—working with the voluntary sector and the private sector and looking at ways to share functions and of delivering services differently are all, I think, subjects worthy of debate—they can do only so much in the time available. That time is simply not enough.
Caroline Flint
I will give way to the hon. Member for North West Leicestershire (Andrew Bridgen), but after that I shall take no more interventions. Hansard will show that I have already taken more than my fair share.
Andrew Bridgen
I thank the right hon. Lady for giving way. My local council in North-West Leicestershire is already right-sizing its top management to protect essential front-line services. Is that not the way forward? She will be well aware that almost a third of Government spending is channelled through local government, so no credible deficit reduction plan can leave local government immune. Without a credible plan, and in the absence of her telling us what a Labour Government would cut instead of local government—perhaps defence, health or education—she has no credibility whatever in the debate.
Caroline Flint
I agree with the hon. Gentleman in so far as there has to be a sharing of the reductions across the different sectors of public spending, but I do not agree that the disproportionate expectations of local government are fair. I just do not think they are fair. In a less partisan arena, the hon. Gentleman might agree that even if we were to pursue the level of cuts proposed by the Government, it would be worth thinking about staggering them over the four-year period rather than expecting the largest amounts to be cut in the first year. Local authorities have been set an incredible challenge in that respect. In a more reasoned environment, most sensible people would recognise that fact and say, “Let’s do something about it before the financial settlement is announced and try to put right some of the wrongs created by the package following the comprehensive spending review.”
In so many ways, the motion says that the Government are not listening. Let me tell the House and the country that Labour is listening and that there is an alternative. The financial settlement is yet to be settled; there is time to put this right. Savings need to be found and, yes, cuts will need to be made in local government—but not like this: not in this way and not in this time scale.
Today, the Government have a choice. They can plough ahead with their plans and impose huge cuts on local councils, forcing them to find savings in the next few weeks—councils will have to decide their budgets by February 2011. They can impose cuts that will unnecessarily cost jobs, undermine the voluntary sector, hit front-line services and create huge uncertainty in the private sector. They can force through cuts that will hit the poorest communities the hardest, or they can choose to listen. They can listen to Members throughout the House—publicly or privately—who I know will take the opportunity here today, and in other forums, to speak about the damage that huge front-loaded cuts will cause. They can listen to the people who work in local government and provide the services on which we all rely, often with very little reward. They can listen to the voluntary sector, and to the small business community.
Will the Secretary of State ensure that any reductions in funding are more evenly spread over four years? Will he introduce more flexible capitalisation arrangements, so that local councils are not forced to make even deeper cuts in services and jobs to meet the cost of redundancy payments? Will he introduce damping measures to stop our poorest communities being hit hardest? Those are the three questions that the Secretary of State must answer today.
I commend the motion to the House.
The Secretary of State for Communities and Local Government (Mr Eric Pickles)
I am most grateful to the right hon. Member for Don Valley (Caroline Flint). I could hear the gentle scribble of history being rewritten. I think that had Winston Smith been part of the process, he would have been down to his second stub of pencil by now. I would happily have walked into Room 101 just to hear the end of it.
We are really very pleased, in a way, that the motion has been tabled. We in the Department are very sensitive people, and we felt that we had done something wrong as far as the right hon. Lady was concerned. She doesn’t phone, she rarely writes, she asks few questions, and she seems to be unaware that we have laid statements. We thought somehow that she was not all that interested. So we are very pleased that she is now back in action, and is taking an interest in the Department. Admittedly it seemed a weird time for her to do so, given that the settlement is just a few days away, but then it occurred to me: she has a plan.
It is all about the business of the blank piece of paper. The right hon. Lady is actually going to write something down. She is going to give us some Labour policy. We are going to be told, in this debate—[Interruption.] I am optimistic. We are going to be told what percentage of cuts the right hon. Lady thinks reasonable. The Local Government Association has already given us a percentage. If the right hon. Lady—who spoke for hardly any time—wants to give us a percentage that she considers reasonable for the coming year, I will happily give way to her.
Mr Pickles
I will happily give way for a trip down memory lane. What does the hon. Gentleman want to tell us about the 1980s?
Mr Watts
It is the 1960s that I want to talk about. The Secretary of State is trying to take us back to them. Can he explain why he is front-loading the cuts? Everyone knows that he is doing it because a general election is coming. [Hon. Members: “What?”] Well, he knows when the election will come. Can he tell us why he is front-loading the cuts? It is a simple question.
Mr Pickles
The hon. Gentleman may be wondering why he is sitting on that side of the House. We have had a general election. His party lost and we won, which is why we are on this side of the House. As for the front-loading—[Interruption.]
Mr Speaker
Order. The Secretary of State is not a notably softly spoken man, but I am having considerable trouble hearing him. He says that he is a gentle and sensitive soul; that is as may be, but I can normally hear him. There is so much noise in the Chamber that I cannot hear him now, and I want him to be heard.
Mr Pickles
I am most grateful for your protection, Mr Speaker. As for the front-loading, the settlement has not been announced. Opposition Members are getting very excited about press reports, which is not a very sensible thing to do.
Mr Rob Wilson
I thank my right hon. Friend for giving way so early in what I am sure will be a brilliant speech. Does he agree that although we are very pleased to be having the debate today, it seems from the number of Labour Back Benchers who have turned up that they are not very pleased at all?
Mr Pickles
There is a point in that, but I have to say to my hon. Friend that we must give all the encouragement we can to the right hon. Lady the shadow Communities Secretary because it is very important that we have an Opposition and if we do so, she might table the occasional parliamentary question, in which case we would have an opportunity to come to the—
Hazel Blears
The right hon. Gentleman appears to be floundering a little at the start of his contribution, and I wonder whether I might, in a constructive spirit, offer him a small lifeline. My right hon. Friend the shadow Communities Secretary has made a powerful case against the front-loading of these cuts. As I understand it, there is a surplus of about £3.4 billion in the national non-domestic rate pool, and the leader of my council in Salford, Councillor John Merry, has written to the Secretary of State suggesting an ingenious way of smoothing out the front-loading of these cuts. If we were to put the £3.4 billion back into the formula grant, that would enable us to reduce some of the devastating impact of that first year of cuts, certainly on Salford council, which is facing cuts of £40 million. If the right hon. Gentleman accepts my lifeline I will be very happy.
Mr Pickles
I am most grateful to the right hon. Lady for that, and, to start on a positive note, may I say that the entire Front-Bench team likes her new hairstyle?
There is not a £3.5 billion surplus in non-domestic rates in the year coming. There is a potential £2 billion surplus in 2013-14. It is hoped that the new system of local government finance, which I will be making some reference to in the statement, will be in the process of being brought in, so it is theoretical at this stage.
Caroline Flint
The right hon. Gentleman teased the House a few seconds ago when he told us to wait and see what the financial settlement provides. Local council leaders have been pressing him to give some hint on, and recognition of, the problem of front-loading and whether that can be looked at. Can he not give some steer that the Government have listened to some of those concerns, because at present they are planning for huge cuts, based on what they expect to have to deliver come April 2011-12?
Mr Pickles
May I reassure the right hon. Lady both that we will be making a statement to the House, unlike last year when the statement was relegated to a written ministerial statement, and that we are going to ensure that the distribution is fair?
Mr Pickles
I want to make some progress first, but I will give way to the right hon. Lady in due course.
It is reasonable for us to have expected to hear in the speech of the right hon. Member for Don Valley how much she would cut from the budget. What percentage reduction does she want from each tier of local government? If she does not like the phasing, which other Department should be cut more next April?
The Opposition have simply lost touch with financial reality. They have got their head in the sand in respect of the urgent need to tackle the nation’s record overdraft and the slide towards a national debt of over £1 trillion. We need to reduce the deficit to keep long-term interest rates down, thereby directly helping families and businesses through the lower cost of loans and mortgages. By reducing spending and restoring the nation’s fiscal credibility, we avoid the massive debt interest bills—over £42 billion a year—which is sucking taxpayers’ money from front-line services.
We had a choice in the most recent spending review: we could face up to the legacy left by Labour—the crippling public debt, the black hole in the nation’s finances—or we could simply let Britain fall into the economic abyss. Looking around Europe, the situation that some of our neighbours continue to face reminds us just how dire the challenges remain.
Mr Pickles
In a moment.
The financial mess that the coalition has inherited is not just because of big banks; it is because of the irresponsible behaviour of big Government.
Simon Hughes
I sincerely hope that all Members, on both sides of the House, realise that local government must do its share of reducing expenditure to deal with the public debt and deficit that we inherited. Will the Secretary of State give me one explanation and one assurance? Will he explain why the comprehensive spending review’s four-year plan set out a greater reduction in the budget in years 1 and 2 than in year 3? Will he reassure me that, as I think Ministers have heard when we have come to see him in the Department, the whole of this year’s funding settlement for local government is being taken into account when the assessment of the reduction is made, not just the direct core funding provided by the grant from central Government?
Mr Pickles
My hon. Friend raises a very important point. The rules are different when sums are being reduced, rather than increased, so it is massively important that we examine all the finance available to local authorities and the gap in spending. I am going to address that most carefully, as I shall do for the precise phasing of the amounts. It is sensible to see these sums taken out at the beginning of the period, because the only way in which local government can approach a 26% reduction is not to salami-slice here and there, but to restructure, share services and the like. If it is going to do that, it had best get on with it.
Mr George Howarth (Knowsley) (Lab)
On phasing, will the Secretary of State accept that it is hugely important for boroughs such as Knowsley that the process of damping stays in place? If it does not, incredible swings will take place within a year—even greater than those he is proposing.
Mr Pickles
The right hon. Gentleman is absolutely right. Hon. Members may not be aware that some authorities, such as Knowsley’s, are heavily dependent on grant; if I recall it correctly, the percentage is in the upper 70s—
Mr Pickles
It appears that that is correct. There are other places, such as Surrey, where we are talking about 20%. If we were dealing with a cut across the board, the effect of an amount coming out of Knowsley’s budget would be considerably greater than if it came out of Surrey’s. That would not be desirable and we will be putting together a system that offers help.
Despite all the bluster and all the complaint, the Opposition would have made some of the same choices had they clung on to office. Perhaps Opposition Members would not like to be reminded that the Labour Government were quietly planning cuts of £52 billion over the next four years. The Treasury’s own figures show that those were front-loaded cuts, with a hit of £14 billion to fall in 2011-12. A small amount of those cuts were made public in the dying days of the previous Administration. The back of a fag packet small print of the March 2010 Budget reveals £480 million of cuts. Those were cuts to regional development agency regeneration, cuts to the working neighbourhoods fund, cuts to the local enterprise growth initiative, cuts to the housing and planning delivery grant, cuts to smaller Department for Communities and Local Government programmes and cuts to time-limited community programmes.
Let us deal directly with the issue of the working neighbourhoods fund. Whether the right hon. Member for Don Valley likes it or not, it was a three-year figure; the programme was coming to the end in March and no money was provided for it to be extended thereafter. We would have been facing precisely the same problem as we are now. Some Members have complained about the end of the working neighbourhoods fund, but we would have been facing this in March.
Mr Pickles
As was rightly said by my hon. Friend, to whom I shall give way in a moment, the current Labour leader made it very clear during the election that regeneration spending
“is not the biggest priority we face as we look at other competing priorities”,
and the then Prime Minister said:
“Housing is essentially a private sector activity…I don’t see a need for us to continue with such”
renovation programmes.
Stephen Lloyd
In the past 12 months, Eastbourne borough council restructured its senior management, producing a more dynamic and customer-focused team, while cutting the cost of its senior team by £300,000 a year. Does the Secretary of State agree that other local authorities can follow the example of Eastbourne borough council, saving money for the taxpayer and bringing local authority executive pay under control, which was something that Labour singularly failed to do?
Mr Pickles
My hon. Friend is right. There is increasingly a trend towards reducing backroom services and I welcome the support from the right hon. Member for Don Valley. Perhaps the clearest message that should go out from the Chamber today is that there is broad consensus on the sharing of services and it would be a very wise chief executive and leader of a council who continued with that process.
Of course, part of the problem is that the so-called operational savings that the Labour party promised were simply not met. When I opened the Department’s books, I noticed that almost £1 billion of planned efficiency savings promised by the Department and announced in the 2007 spending review and the 2009 Budget were never delivered by Labour Ministers.
We know that Labour had secret plans for cuts for local communities, but it did not have a route map to get there through constructive reform. The Labour Government had 13 years to improve the system of local government funding but they fluffed it. They introduced 10 different Acts that affected local government finance. They scrapped capping, then they reintroduced it. They gave pensioners an extra payment for their council tax, then they dropped it. They passed a law to hold a council tax revaluation, and then passed a law to delay it. They published a local government finance Green Paper, then a White Paper, then they held a balance of funding review, and then they held the Lyons inquiry review. They then extended the Lyons inquiry review and when the Lyons inquiry reported, they did not even bother to issue a formal response.
In the 2010 Labour manifesto, we were promised a cross-party commission on local government finance. Perhaps Labour just ran out of ideas and wanted to ask us. The final Labour initiative, with the third leader in three years, is the famous blank piece of paper. No wonder the shadow Housing Minister, the hon. Member for Plymouth, Moor View (Alison Seabeck), has admitted
“we won’t rush into policy making”—
[Interruption.] I am glad she has confirmed that. Perhaps they are waiting for the next Labour leader. I suspect that that will not be long now—like with buses, one waits around for ages and three come along pretty quickly.
Mr Pickles
I am sorry, but if I wanted to visit the 1980s I would watch an episode of “Life on Mars”.
I welcome the opportunity to lay to rest some of the reckless scaremongering that the Labour party has peddled in recent weeks, and particularly in the past few moments. We are a few days away from the settlement and it is important that we do not create a climate in which wacky, fictitious figures end up scaring people unnecessarily without adding anything to the debate.
Andrew Bridgen
Does the Secretary of State remember the words of the previous Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling)? Before the last general election, he said that if the Labour Government were re-elected, this country faced the biggest cuts in its history. My right hon. Friend might have noticed that that statement has not been repeated by those on the Opposition Front Bench.
Mr Pickles
I do indeed. From what I can understand from what the right hon. Member for Don Valley was saying, it seems that she is in favour of cuts but not specific cuts. She is in favour of financial prudence, but not if it involves cuts to local authority spending.
The key argument about the forthcoming grant reductions is that the right hon. Lady seems to think that they will be unfair. How she can assert that when she does not know what the settlement will be is a mystery to us all. Opposition Front Benchers point to briefing figures from the pressure group SIGOMA—special interest group of municipal authorities—without realising that they are being played. SIGOMA understandably wants to paint a dire picture for its members as part of a lobbying exercise ahead of the settlement. It is playing metropolitan areas off against shire counties.
Mr Marsden
The Secretary of State asks why these points are being raised by the Opposition, but he and his colleagues have a record on this issue. The figures and cuts that the Government Front-Bench team produced in June, with the abolition of area-based grants and various other measures, disproportionately hit the parts of the country that we have been talking about.
Mr Pickles
The hon. Gentleman is well aware that in the emergency Budget we had to prevent money that had not been paid out from being paid—it is difficult to take money from areas that have not received any at all. He seems to think that we live in a vacuum. Has he seen what has gone on in other parts of the continent and the problems that other Governments face? Had we not taken these decisions we could have found ourselves in precisely the same position.
Robert Halfon
Would not councils have had a lot more money in recent years if they had not had to spend millions on ridiculous inspection regimes?
Mr Pickles
My hon. Friend is absolutely right. As part of the deal in which local government will have less money and more power, we will reduce the number of unnecessary regimes.
Hazel Blears
I am glad that the right hon. Gentleman has got back to reality regarding what, if anything, can be done to mitigate the impact of the cuts on some of the poorest communities. I put to him again the issue of national non-domestic rates. He said that there would not be a surplus until 2012-13.
Hazel Blears
Well, the Office for Budget Responsibility’s forecast in the Treasury’s June Budget report indicated that there is likely to be a surplus of £3.4 billion. If that is the case, will the right hon. Gentleman agree now to redistribute the whole of any surplus there might be, as the legislation covering this area provides that any such surplus will be redistributed? That is something practical that he could do to mitigate the effects on the poorest communities.
Mr Pickles
I always enjoyed it when the right hon. Lady occupied my role, so I am sorry to tell her that this is not like a deficit; we have to pay down the debt in relation to non-domestic rates, so the money that she suggests will be available will not be available for what she suggests. In case she thinks I am just making a rhetorical point, I am willing to write to her, copying in the right hon. Member for Don Valley, explaining this issue. If £5.5 billion were suddenly available, I think I might have used it by now.
The points that SIGOMA makes could be made by the county councils network, the district councils network, the SPARSE Rural group and my dear chums at the London councils. They could produce similar figures on how the funding system seems to channel more money to certain areas. Before Labour jumps on these bandwagons, it needs to realise that it cannot play the mets against the shires and then campaign honestly at the May district council elections.
Mr Pickles
We will listen to all representations. We are moving to meet the points made by the Local Government Association and other interested parties. We intend to deliver a fair and sustainable settlement that protects the most vulnerable communities and spreads the impact in a manageable way.
Mr Pickles
The hon. Gentleman seems to have left the 1980s for the 1970s and “Jim’ll Fix It”. There is no intention to fix this or to hit vulnerable communities the hardest. We will be doing our best and I hope that the hon. Gentleman will be ready to praise me next week when we produce our proposals. Frankly, he should take with a pinch of salt some of the more alarmist predictions of jobs cuts that have been fed to the media by the unions and others. Such dossiers are based on looking at local media and projecting them out. We see unions being upset by stories that unions themselves have placed.
Reducing the number of posts is not the same as job cuts, as staffing can be reduced through natural wastage and freezing. The unions have intentionally misled on the issuing of section 188 notices, which allow the terms and conditions of workers to be changed to save money. The GMB has claimed that 26,000 staff in Birmingham face “the threat of redundancy”. Indeed, that would be a shocking figure—26,000 workers faced with redundancy. In fact, the process seeks to reform car allowances and staff parking, and is nothing more than that. It is designed to reduce the scope for redundancies. Even Leon Trotsky at his worst would not have taken to the streets over car parking. Such reforms reduce the scope for redundancies and do not increase them.
Sir Alan Beith
Speaking of redundancies, my right hon. Friend has some discretion over the limited amount of money that he has to allow capitalisation of redundancies in those authorities that have low reserves. I ask him to look carefully at Northumberland, whose reserves were low because of a forced reorganisation under the previous Government, and there is a very heavy claim on the county council at present because of the incredible snowfalls that we have had in Northumberland.
Mr Pickles
My right hon. Friend makes a good point. We warned about the effects of the various reorganisations, and stopped those intended for Norfolk and for Devon. Where money is tight, we cannot afford to waste it on a reorganisation of local government.
I am actively reviewing the amount available for recapitalisation. Clearly, there will be tough choices. The sharing of services and back-office consolidation will reduce the number of staff posts needed over time. The priority of local government is not to be a municipal job creation scheme, but rather to provide quality front-line services, keep local taxes down, and provide a positive environment for private sector job creation and the expansion of local business.
Mrs Mary Glindon (North Tyneside) (Lab)
Will the right hon. Gentleman comment on Pricewaterhouse- Cooper’s statement that for every public sector job lost, a private sector job will be lost too?
Mr Pickles
I do not believe the figures. If that is the case, we are beyond economic ruin, because our country has reached a point where we can no longer afford to level off spending. If the hon. Lady would like the United Kingdom to enter the world of Greece and our friends in Ireland—[Interruption.] Let us be fair. What is the biggest problem? Sovereign debt. Which country has the largest sovereign debt? Had my right hon. Friend the Chancellor not taken those brave decisions in the emergency Budget and in the spending review, and if we did not take those brave decisions to their logical conclusion, we would have been in the danger zone. We all know where the Opposition would have been—they would have been running for cover.
Nic Dakin (Scunthorpe) (Lab)
I am interested in the Secretary of State’s references to Trotsky and other people, but how many local government workers does he expect to see made redundant at the end of this year on the basis of his policies?
Mr Pickles
That is just a typical Labour intervention. It is not about the economy; it is all about getting as many bleeding stumps as possible. What we do know, through research, is that despite the various daft claims made about the number of people being made redundant in Birmingham, for example, the majority are going by way of natural wastage, turnover, mutuals and co-operatives being set up—something that Trotsky would have approved of—voluntary redundancies and early retirement. When it comes down to it, the likelihood is that the number of compulsory redundancies will be less than 4%. Frankly, these things can be managed with a will, and it is our intention that councils will manage them sensibly.
Owing to Labour’s planned cuts and the dire state of the public finances, the vast majority of councils have seen these difficult and challenging times coming, and they have been making sensible, constructive plans to address them. I want to support them with action, not meaningless words. I can make councillors’ and councils’ jobs a lot easier by scrapping regulations, tearing up unnecessary guidance and cutting through red tape. The Government are restoring real democratic accountability to local government, giving the power, the freedom and the authority to those who actually make the decisions. We have to be realistic. We realise that there is less money, but unlike the former Government, I do not intend to tell councils how they should spend it. The money given in this settlement will not come with strings attached. As we said during the spending review, with very few exceptions we have ended the ring-fencing of grants, so that councils can decide for themselves how their money should be prioritised and spent.
Under the spending review, we will allow councils to borrow against future business rates. We are also introducing powerful new financial incentives for councils, such as the new homes bonus. In addition, there is the £20 million through capitalisation, referred to by my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith). Councils can top that up with the sensible use of their £10 billion of reserves—they were prudent and repaired the roof when the sun was shining, unlike Labour, and they can now spend that money when it is rainy. There are a whole range of measures that proactive councils can take—for example, improving transparency, sharing services, cutting out waste, improving procurement practice and bringing senior pay under control.
Joan Ruddock
May I tell the Secretary of State that my council of Lewisham has done all the things that he has just mentioned? Over the past five years, it has saved £40 million through efficiency savings. He made the point about jobs. Let me tell him that the council has just taken a decision to cut £16 million from the budget. That would cost 300 jobs, but only 50% of them could be found through natural wastage. However, the council tells me that front-loading means that it will not be able to plan to get down even to that level, let alone the 4% that the Secretary of State has just spoken about.
Mr Pickles
The right hon. Lady’s council has just £1 million short of £60 million in reserve. The decision that has been taken is its own, and I would urge it now to look at other measures. I would urge the council to look towards a joint—[Interruption.] It might not be for the right hon. Lady—I know she lives a champagne lifestyle—but £60 million is a lot of money. Let the council look towards sharing a chief executive, or sharing an education authority or planning authority. Let it look at working together right across back-office services.
At the heart of the settlement, we want to ensure the protection of hard-working families and pensioners; support for vulnerable individuals; help for vulnerable communities; and fairness, for both north and south, and rural and urban England. Practical policies to protect the vulnerable include: £1 billion in extra grant for social care and a further £1 billion from the NHS; a new role for councils in public health, backed up with extra funding; £2 billion for decent homes, improving the quality of life for those in poor-quality housing; and £6.5 billion to support people and allow the vulnerable to lead independent lives. Labour talks about fairness, but when it was in government council tax more than doubled—in some years, above inflation—thanks to fiddled funding and unfunded burdens.
Caroline Flint
The right hon. Gentleman mentions funding for public health, which is estimated to represent at least 4% of the NHS budget. Will that move across to local government?
Mr Pickles
The right hon. Lady is playing a game whereby if money moves from the health service it represents a cut in the health service, but if it moves to local authorities it fills a hole. Conservative Members have been saying for years that there is a role for councils in public health, and we are backing that. I recall, at the Opposition Dispatch Box, asking the then Government for the kind of financial commitments that we are currently giving to deal with adult social care. Frankly, the right hon. Lady should be thanking us—[Interruption.] Well, I’m glad you’re supporting it. Just get behind the programme then, dear. That’d be marvellous.
Working families, pensioners and, indeed, the squeezed middle were hit the hardest. The hikes were equivalent to 3.5p on income tax, and the Labour Government were planning further local tax rises, as their local government manifesto for a fourth term revealed: removing the retail prices index cap on business rates, hammering local high streets; a council tax revaluation and rebanding, hitting cash-poor pensioners; and new taxes to empty bins, punishing struggling families. Labour’s answer to every policy problem was an extra rise in tax or more red tape. But, in six months, the new Government have scrapped Labour’s bin taxes, called off the council tax revaluation, increased small business rate relief and found £650 million a year of funding in each of the next four years to help to freeze council tax next year. Let me make it clear: that is completely new money; it is not top-sliced.
I intend this settlement to be the last ever to rely on such a complex and outdated system, which is not fit for purpose. It has trapped too many councils, making them financially dependent on central Government, and there is no incentive for them to invest in their local economy, given that the proceeds simply vanish to central Government to share out nationally. It makes planning difficult, weakens local accountability and stifles local innovation. It is part of the same trend that has led to some areas of the country becoming almost completely dependent on the public sector.
All that will become clearer when I present the full settlement to the House, but let me reassure Members that I and my ministerial team are doing everything possible to ensure that local government has a fair and sustainable settlement, to the good of the country and to the good of local communities.
Andrew Gwynne (Denton and Reddish) (Lab)
May I take this opportunity to thank you, Mr Deputy Speaker, for allowing me to speak in this important Opposition day debate? I am pleased to follow the Secretary of State, who, in his calm Yorkshire way, said not a lot. What he did say, however, will send a chill through communities in my constituency.
The Conservative-Liberal Democrat Government’s cuts will clearly have an effect on all constituencies, but I believe they will impact more unfairly on areas with additional social need, such as my constituency in Greater Manchester. I benefit from representing a constituency that covers two very different local authorities, Stockport and Tameside metropolitan boroughs, and, although both authorities plan major reductions in spending in the years ahead, I fear that the cuts will impact particularly on Tameside, which has been ranked as an area of high deprivation and the 56th most deprived local authority area in England.
People in Tameside earn lower incomes than the national average, and in their time of need they might find themselves calling on council services, just when the council is least able to assist them because the massive reduction in its overall budgets will impact on those crucial services. To be fair, it is a similar story with the two Reddish wards in the Stockport part of my constituency. Although those wards are located in a much more prosperous borough overall, they are also areas of very high social need.
Duncan Hames (Chippenham) (LD)
The hon. Gentleman makes a very interesting point about how poverty can be localised much more than on the basis of local authority area. Does he accept that that is a shortcoming of local government finance in the past? The assumption has been that an area is either poor across the whole of the local authority or not at all?
Andrew Gwynne
For the past 13 years of the Labour Government, Stockport received additional money because of those deprived Stockport wards. It is a shame that the Liberal Democrat council chose not to spend the money in Reddish and in those wards.
It is true that we are facing one of the worst rounds of spending contraction ever experienced. That is likely to have a massive impact on every part of our public services, not just local government. However, we should not forget that local government provides, or co-ordinates, the delivery of some of the most valued public services—from children’s services to adult social care, from leisure, parks and libraries to schools and from fixing roads and pavements to public transport and refuse collection.
I am concerned about how the cuts are being implemented and their unfairness to more socially deprived areas. My constituents in Tameside and Stockport accept that there needs to be a reduction in public spending and that local government must play its part, but it is certainly difficult to see any fairness—as was promised in the comprehensive spending review—in the fact that some councils in the most deprived areas will have reductions in their budgets next year of, as has been suggested, up to 25%, 30% or more, whereas other councils—many in the south—will feel the impact of those reductions far less.
Research from SIGOMA, a group of 44 metropolitan and unitary authorities outside London—I know the Secretary of State’s view on that grouping—demonstrates that the councils that expect to be worst hit by the CSR are in the 20% most deprived areas. Clearly we know that the cuts will hit places such as Denton and Reddish very hard indeed.
Tameside council is planning for a total funding reduction of around £100 million over the next four years—a massive amount for one fairly small metropolitan borough to lose. We also know the cuts are being front-loaded, so Tameside council will need to save more than £37 million next year. It must save more in one year than it has saved over the past seven, despite making extremely tough choices to meet its Gershon savings. There is very little meat left on the bone. These cuts will hurt our services. Ultimately, the proposed cuts will mean a reduction in Tameside council’s work force of about 800 over the next four years.
Gavin Barwell (Croydon Central) (Con)
The hon. Gentleman is speaking up for his constituents, and he is to be applauded for that. He says that there is very little meat left on the bone in Tameside. What will he say to my constituents when they realise that under the previous Labour Government Tameside received a real-terms increase over the past five years, whereas Croydon received a real-terms cut of 3%?
Andrew Gwynne
I am not sure that those figures are correct. However, if that is what the hon. Gentleman says, people in Croydon should vote Labour. When combined with the new year rise in VAT, it is clear these cuts and the impact they will have on public services mean that those people with the least—especially the elderly and most vulnerable—will pay more and lose the most.
I have had sight of recent research showing the overall impact of the Government’s spending plans on local authorities, including Tameside. It calculates that from 2014-15, as my constituents make their contribution to the Government’s deficit reduction, Tameside’s economy will lose £50 million a year. It also shows that residents of working age will, on average, contribute £39.79 per person compared with the Chancellor’s constituency of Tatton, where residents will contribute only £22.62 per head, or those living in Kensington and Chelsea, who will contribute just £5.91 per head.
George Hollingbery (Meon Valley) (Con)
I congratulate the hon. Gentleman on defending the constituents whom he so ably represents. He can, of course, cherry-pick statistics as he wishes, but I should like to let him know what is happening in part of my constituency. East Hampshire district council—the provenance of these statistics, incidentally, is the council itself, and they are historical—has seen a 25% real-terms reduction in the grant from central Government over the past 10 years. Does he think that that is fair?
Andrew Gwynne
Of course, the hon. Gentleman makes the case for his area, but I would say that areas such as Tameside, which I represent, do not have the capacity to raise the money locally, so they suffer disproportionately when central Government grants are cut in the way proposed by this Government.
Andrew Gwynne
I will not give way—I want to make some progress.
It is a similar story when we look at the changes to long-term sickness benefit, which is being cut by £2 billion a year. Tameside will lose £11 million a year: £85.14 per head of the working age population, compared with £45.18 for Tatton or £13.18 for Kensington and Chelsea. This is hugely unfair, and it clearly illustrates who is bearing the brunt of the spending reductions.
Let me turn to how the Stockport part of my constituency will be affected. The Liberal Democrats who run Stockport council are being very evasive—to put it politely. We know that they have to make about £20 million of cuts next year, but so far they have announced only £15 million—they will not yet say where the other £5 million will come from. That uncertainty is chronically unfair on their dedicated and hard-working work force. I find it ironic that the Liberal Democrats tabled one council motion after another condemning Labour’s grant settlements—real-terms increases, year on year, on a frequent basis. Since their Government announced cuts, there has been not a single peep from any of their councillors. Nobody likes to be unpopular, least of all the Liberal Democrats, who have become past masters at blaming somebody else, but they are not being straight with the people of Stockport about where the axe will fall and what the impact will be on front-line services. Instead, they are using convenient managerial phrases such as “service redesign”, “restructure” and “reprioritise” when they really mean cuts.
Cuts on this scale mean big job losses. Only last week, Stockport council announced 250 job losses, which will mean unprecedented reductions in services that will be felt in every corner of our community—although given the previous form of Stockport Liberal Democrats, no doubt many of the cuts will hit the Reddish wards in my constituency hardest.
There is suspicion about where the axe will fall next. It is alleged, for example, that all the youth centres will be closed, including the one in Reddish, which does an invaluable job in keeping young people engaged with their education and away from trouble. This is a wider problem within the coalition Government and their ill thought-out plans regarding local government finance. How can they possibly create the so-called big society when the voluntary sector, which will be fundamental to it, will face such substantial reductions in its core funding as these local government cuts start to bite hard? Of course, as we heard earlier, many workers in the public and voluntary sectors are women who work in the heart of our communities as teaching assistants, care assistants, school crossing patrollers and dinner ladies. It is truly hypocritical of the coalition Government to talk about the big society, and then to attack ordinary people working in their local communities in a range of important jobs.
It is perhaps not sufficiently understood that many jobs in the private sector are dependent on local government and public sector funding. Demand will be taken out of the local economy, so many retail and service companies will suffer. Tameside pioneered a scheme called Tameside Works First that prioritised the granting of smaller contracts to local companies to assist them through the downturn, helping local companies such as Denton-based Anvil Masters, which provided new park railings for Granada park in the town. Tameside should be lauded for pioneering such a scheme. However, the cuts will have a ripple effect in the private sector in my constituency and in every constituency.
Finally, the poorest, those who are most at risk and those who are most in need in our communities will be affected heavily by the cuts to council services. Some of the same people will be affected by the cuts to housing benefit. Recent research has shown that about 3,700 people in Tameside and 3,600 people in Stockport will lose out because of the proposed changes to housing benefit, some by as much as £42 a week. We should not forget that since the economic downturn, some households will have lost a wage and some people will have moved to lower paid jobs. That means that there are now even more low-paid families and that even more help is needed from local council services, at a time when councils are least able to help.
There is an emerging pattern across the country of who will be affected the most by local government cuts and the changes to the way in which central Government funds are handed out to councils: poorer areas in cities and metropolitan boroughs will face the brunt. The Labour Government had a strong record of increasing funding for local authorities in such areas, and of using those authorities to deliver national priorities by harnessing the best locally. Worse still, it is clear to all Labour Members that the Government have taken no account of how areas such as Denton and Reddish will fare with the massive reductions in spending. Sadly, we face a bleak future with trepidation.
Sheryll Murray (South East Cornwall) (Con)
Thank you, Mr Deputy Speaker, for allowing me to catch your eye in this important debate.
Having served as a local councillor for a number of years before coming to this place, I praise the Secretary of State for deciding to free local councils from the chains of red tape that stifled local government throughout the years of the Labour Administration. In the current economic climate, there is no doubt that there will be pain and that it will apply to local government as much as to any other area.
Last Friday, my local council in Cornwall adopted an emergency budget and took the early initiative to consider where savings might be made before the settlement announcement. It is predicted that the cost of delaying that decision would have been £55,000 a day. Sadly, opposition parties in Cornwall were promoting further meetings and the delaying of decisions. Ten days of delay would have cost £500,000 and twenty days of delay would have cost £1 million. Opposition parties seem to be engaging in delaying tactics just for the sake of it.
I ask the Secretary of State to note that, on the creation of the new unitary council, the authority inherited a significant number of reserves that were held for specific reasons. Most came with a variety of commitments against them and, as such, remained untouched last year, although there was a minor review through which some reserves were swept up corporately. A new strategy has been introduced, the main theme of which is to reduce radically the number of reserves that are held; to manage all capital reserves centrally as part of the corporate approach to capital financing; to create one budget equalisation reserve per directorate to allow minor budget variations to be funded without recourse to the corporate centre; and to ensure that the authority’s general reserve is sufficient.
The council acknowledges the need to consider alternative models of service delivery, including trusts, joint ventures and arm’s length management organisations, some of which involve services being delivered in partnership with the private sector.
Justin Tomlinson (North Swindon) (Con)
On the sharing of services and facilities, does my hon. Friend agree that we must work across service areas with neighbouring authorities and external organisations to deliver value for money and to drive up standards?
Sheryll Murray
Absolutely. I wholeheartedly agree with my hon. Friend.
The arm’s length companies will remain under the direct control of the council, but will free up trade with partners and trade outside our borders to bring more business into Cornwall. An example of that shared service is that back-office corporate support functions will be brought together in a single organisation alongside the council’s customer-facing front desk. That new organisation, although council controlled, will be able to sell its services to other partners within and outside Cornwall, generating more investment in our local economy. That will not only safeguard jobs in Cornwall but give the council a vehicle to create new employment opportunities: integrating those services will alone generate £2.7 million of savings.
Other ways of working include outsourcing, which is where organisational functions that could be delivered by in-house teams are contracted out to external organisations. The council has no intention of widespread outsourcing, but it will explore that option where it makes sense and delivers the best solution for local taxpayers.
Social enterprise is another likely model for service delivery, particularly in relation to the integration of health and social care services. Developing new models of service delivery is a radical shift, and the council has said that it will explore the details further in a series of business cases. It has said that it has a major role to play in decisions on how local health services will operate in future. It is keen to benefit from joint commissioning of care services and take the lead through its statutory role in health and well-being. Adult care services could be integrated into health services and new social enterprises, and public health services will become part of the council. The council will offer to provide a joined-up support service for GP consortiums, and there will be an integrated children’s service led by the council.
In Cornwall, the council has been talking about public sector reform for some time. It is resourceful and pragmatic, and it can deliver the big society.
Mrs Mary Glindon (North Tyneside) (Lab)
The Secretary of State recently said that councils should use the cuts as an
“opportunity to completely rethink everything they are doing, creating a modern, flexible and innovative council.”
I was a councillor for 15 years in North Tyneside, and that is nothing new to me. The big society and localism are just about reinventing the wheel, because many of us who were local councillors in the past know how hard councillors work and how much they have done to use their budgets wisely.
During my 15 years as a councillor I saw many changes. At first, I was a councillor under the former Tory Government, and when Labour took power in 1997, it was good to see changes such as how we were able to bring houses up to the decent homes standard over 10 years, and to see our neglected schools change, becoming new or refurbished buildings and providing fantastic places in which to educate our children. There was Sure Start, and in my borough there were new swimming pools. We were also able to put in place the “Fuel for kids” scheme, giving children a free breakfast at the start of the school day. For many children, that made a difference to their learning ability, and there is empirical evidence to prove that.
We were able to do many of those things when we moved to a mayoral system and had a progressive Labour mayor, who followed two years of a Tory mayor. Under the Tories many services were cut, and in fact the voluntary sector service in which I worked was closed. When we got our progressive Labour mayor, John Harrison, all the things that I have referred to flourished.
Just over a year ago, the previous Tory mayor was re-elected, and, as he has mentioned in the House, she happens to be a favourite of the Secretary of State. That Tory mayor, when leader of the council opposition, wrote to the then Housing Minister and asked him to withdraw £100 million of credits that were to be given to the Labour council to build older people’s homes for the future—she simply did not want that done. Since taking office, she has drastically reduced that project, which means we will see not new, fantastic, refurbished properties, but old houses simply remodelled not to the standard people wanted. She has also prevented 800 new council houses from being built with money that would have come from the former Labour Government, because she did not want it to happen in her end of the borough.
It is interesting to see how, until tonight, the mayor has fought against so much that Labour put in place and praised the new Government. The mayor I am talking about is Mayor Arkley, and tonight, in North Tyneside’s section of the Newcastle Evening Chronicle, she is pleading with her Government to have a change of heart. She has urged Treasury and other Ministers
“to think again about the speed of the cuts”.
Tom Blenkinsop
It is not just in Tyneside and the north-east where Conservatives are vocally opposing the Government’s measures; it is also in Teesside, where the Conservative leader of Stockton council, Ken Lupton, has said that the Con-Dem Government’s position on the cuts is wrong. Also, Mayor Mallon from Middlesbrough —an independent, and not necessarily a loving friend of the Labour party—has said that the Conservative party and Liberal Democrats have declared war on the north.
Mrs Glindon
My hon. Friend is right. It is good to see those people waking up to the realities of these deep cuts.
On this occasion, I would like to join our Tory mayor in pleading with the Government. She said:
“At a recent meeting with an official from HM Treasury, I have requested officials to reconsider this issue and spread the reductions more evenly over the four-year period of the Spending Review and to allow additional freedoms to local authorities to capitalise redundancy and equal payments to enable more effective planning to take place for workforce changes”.
I ask that Ministers listen not just to the Opposition, but to their own party members, who are trying to deliver a service and believe that the cuts are too deep, too soon.
Heather Wheeler (South Derbyshire) (Con)
I declare an interest, because I am still a councillor on South Derbyshire district council and am married to the new council leader. I was leader myself for three years, and was previously a councillor there for 15 years—it seems to be a popular choice. Prior to that, for four years, I was a councillor on Wandsworth council. My antecedents in local government are strong and long. I have an abiding love for it.
I am appalled at tonight’s debate. It is astonishing that yet again we have hour after hour of prime television in which all the Labour lot do is scaremonger—it is hour in, hour out. There is no substance to what they say, because of the appalling way Labour councils have run areas year after year. They have never considered value for money for their taxpayers.
Tom Blenkinsop
By the sound of it, the hon. Lady has a great record in local government in South Derbyshire, so she will be aware of the Gershon savings over the past five years, under which 3% to 5% of council tax spending was looked at in terms of savings across the board. In my area, that has led to significant savings over the past five years.
Heather Wheeler
Of course, I know about the Gershon savings. I also remember the squeals about it and the synthetic savings that were made. The opportunity was not taken to look root and branch at what local councils need to do and should do, at the way they should do it and at the value for money they provide for their residents. It is hugely important that people take an innovative look at the way in which local councils work, and that they take this opportunity. The whole country is in a financial crisis, and nobody should be in position where they do not have to take their percentage of it. That would be completely wrong.
The new coalition Government are going to look at the floors and ceilings, the caps, the huge amount of ridiculous comprehensive area assessment-type targets, and the millions of pounds that all our councils have had to spend on this sort of thing. This coalition Government are about freeing people up to organise themselves in such a way that they provide the vital services that their people want at the same time as having the guts to say, “We don’t want to do that any more. We’ll have a referendum on it. Do you agree with us?” In our council in South Derbyshire, 1% on the rates raises £50,000. Given the floors and ceilings that I have had to put up with for the past 13 years of the Labour Government, we have easily lost £2 million there. The same goes for the fire authority in Derbyshire, and the police authority as well.
Mr Watts
May I inform the hon. Lady that those floors were introduced to protect her local authority? Local authorities such as St Helens should have received a far bigger grant allocation every year, but we did not put right what the previous Tory Government had done, which was to take money from the most deprived parts of the community and give it to the most affluent parts.
Heather Wheeler
That is a really interesting point. All I know is that I have lost £2 million in South Derbyshire. I do not know whether it should have been £2.5 million or £0.5 million; I know that I lost £2 million.
Gavin Barwell
I should just like to put the record straight, following that previous intervention. According to the House of Commons Library, two of the local authorities that did worst, along with my own council, over the past five years under the previous Labour Government were Newcastle upon Tyne and Liverpool.
Heather Wheeler
That was a very helpful intervention. Fortunately, someone has some facts at their fingertips, rather than the usual pure emotion.
Mr Watts
The hon. Lady and the hon. Member for Croydon Central (Gavin Barwell) need to understand the amount of money that has gone into Liverpool. Under the Labour Administration, many millions of pounds went into the regeneration of the city. The Labour Government had a good record on Liverpool city council.
Heather Wheeler
What an amazing situation. We are completely blind to the reality of what has been going on. The ratepayers of South Derbyshire also know about how much money comes in. They were used to council tax rises of 9%, 13% and 17%, which was absolutely outrageous for hard-working families. It was completely ridiculous. We were left to fend for ourselves, and it just was not good enough.
The new localism Bill, and the new arrangements for the rate support grant, will have a major effect on what we do. We will be able to do away with the horrendous top-down targets that our accountancy and finance staff used to spend hundreds of hours dealing with. All of that will be swept away, and thank goodness for that. I am really looking forward to the announcements just before Christmas. There is one more Christmas present that the Minister can give me, relating to Gypsies and Travellers, but we can talk about that another time. We have had to put up with scaremongering for the last however many hours, and the debate is to go on until 10 o’clock, apparently, so goodness knows what else the Opposition will come up with.
Tom Blenkinsop
Those were not my words that I mentioned earlier; they were the words of Ken Lupton, the Conservative leader of Stockton borough council. He has said that the proposals were wrong.
Heather Wheeler
If the hon. Gentleman would like to phone me later, I will sort him out.
It really takes the biscuit that we can sit here, having had 13 years of local government being raped by top-down targets, London telling us how we have to do stuff, ignoring local priorities and spending hour after hour on a meaningless load of nonsense including having different languages printed on council papers all the time—
Heather Wheeler
No, I think that I have given way enough. It is a delight to hear the hon. Gentleman, but perhaps another time.
I am really pleased that the Ministers have given robust answers from the Dispatch Box, and I look forward to hearing some quieter comments later on, along with some apologies from the Labour party for what we have had to put up with for the past 13 years.
Mr Gordon Marsden (Blackpool South) (Lab)
It is a pleasure, albeit a sad one, to speak in this debate about the impact that this Government’s policies have had on my constituency and my local authority. I speak not only for Blackpool, however, but on behalf of many other seaside and coastal towns that have suffered disproportionately under the policies of the Minister’s Department and the Government since they were formed—I will not say since they were elected—in May.
As many Members know, Blackpool and many other seaside towns have always had significant problems that are not just particular to them, but are greatly emphasised. The problems are connected with mobility and transience, and they often have severe pockets of deprivation. It is to the last Government’s credit that significant attempts were made to ameliorate the situation both through spending formulae and through the working neighbourhoods fund, area-based grants, the local enterprise growth initiative, the sea change programme and others. They helped to soften some of the particular problems faced by those areas.
Mr Marsden
Not at this point, but I may do later.
I shall not stray far from the motion before us, but I want to mention, in passing, the significant assistance provided by the Northwest Regional Development Agency, and the same point applies to seaside and coastal towns elsewhere.
Mr Marsden
I would like to make a little progress before giving way. As I was saying, the regional development agencies provided a significant benefit.
What has happened since June this year? First, we had the area-based grants cuts in the emergency Budget. If we look at the figures on the cuts in seaside and coastal towns generally, and particularly at those in Blackpool, we find that in most cases the cuts were twice the level of those made in other areas. It is not necessary to take just my word for it; let me cite the words of Peter Callow, the leader of Conservative-controlled Blackpool council. On Radio Lancashire, commenting on the cuts, he said that
“it is 33 million for a part year remember which equates to £4 million for the whole year, that is a sizeable sum and what I have got to explain to government and what I am doing is saying look behind the glitz and the glamour of Blackpool there is deprivation, we are one of the most deprived areas in the land and we shouldn’t be singled out like this, I understand some of the leafy lanes of Surrey and places have got away with it, well that can’t be right”.
That is what the leader of our Conservative-controlled council said back in June.
Lyn Brown
I am interested in the point my hon. Friend is developing. I understand that Newham council is likely to lose approximately £70 million over three years. Newham, as my hon. Friend will know, has the sixth highest level of deprivation in the country. Richmond, on the other hand—I am sure we all who know who represents that constituency—is to lose only about 9% of its net grant, which amounts to only £4.6 million.
Mr Marsden
I am grateful for that intervention, in which my hon. Friend highlights the disparities that can arise between two boroughs in a relatively small geographical area in London. Those disparities, of course, have been reflected elsewhere. Blackpool had the cuts I mentioned, for example. Then we had the spending review.
I see in his place the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill). When he was tackled on these issues during questions immediately following the spending review, he came up with the immortal phrase:
“Those in greatest need ultimately bear the burden of paying off the debt which this country has been left”.—[Official Report, 10 June 2010; Vol. 511, c. 450.]
If there were ever a Freudian slip to demonstrate the position of Conservative Members, who want to punish deprived areas for the problems they face, that was it.
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
The hon. Gentleman could at least quote me properly. He should remember that I said that that would be the case if the deficit were not paid down. We are paying down the deficit precisely to protect the most vulnerable—something that his party singularly failed to do.
Mr Marsden
If the Minister consults the Hansard report of the day in question, he will see that he said what I have quoted, that Mr Speaker said “Order”, and that we moved on to other subjects. There was no reference to what he had said.
The spending review speaks of front-loading, and we heard—unusually, coming from a blunt Yorkshireman—some quite waffly references to it by the Secretary of State. We must wait to find out whether all the waffle produces anything, but I can tell the house that the abolition of the area-based grants, and the effective abolition of the working neighbourhoods fund in the second spending review, have had a devastating effect on towns such as Blackpool, not least because—as was pointed out earlier—it is not just a question of what the working neighbourhoods fund did for the public sector, but of what it was also able to do for the private sector in conjunction with that.
We in Blackpool, like those in several other areas, have experienced a double whammy. We have also been left off the list of areas that will receive funds for decent homes, although our borough and community feature on the index of local deprivation as the 12th most deprived in the country.
Labour Members and, to be fair, one or two Government Members have talked of the knock-on effect on other services. In my area the Connexion service, youth services and other services of that nature have already suffered badly, and are likely to continue to suffer badly if anything like the 16% overall cut that is currently being proposed for Blackpool borough council is imposed.
At this year’s Labour party conference, I went to a fringe meeting that had been organised by Action for Children. It was a good, non-party-political meeting, which discussed the involvement of young people in their local communities. It was attended by some very good youth workers from all over the north-west. Virtually all those people, who were doing good work in their communities, had already lost their jobs or were about to do so, either because of the abolition of the future jobs fund or because of cuts resulting from the area-based grant system.
In case Government Members think that this is simply a bit of propaganda from the Opposition, let me remind them what the chief executive of Blackpool council wrote to me in a letter back in July about the reduction in revenue and capital support. He spoke of cuts of £3 million in the area base grant, £1.3 million in education, £731,000 in local enterprise growth initiatives, £116,000 in Supporting People, and £526,000 in the working neighbourhoods fund. The list could go on. In fact, the north-west generally faced the biggest share of the £1.17 billion of local authority cuts that were announced in June. It lost £1 of every £6 that was cut across the United Kingdom.
Gordon Birtwistle (Burnley) (LD)
I was a Burnley councillor for many years. We had the working neighbourhoods fund, but we were well aware that it would end this year. Were Blackpool councillors not aware of that? We made provision for it.
Mr Marsden
I thank the hon. Gentleman for his comments. I understand that he wishes to mitigate some of the criticism that his own councillors have made of the various settlements, but I remind him that the cuts in area-based grant had to be effected in year, in this year, quite apart from what would happen after 2011.
Mr Marsden
I am indebted to my hon. Friend. He is, of course, absolutely right.
Mr Marsden
My hon. Friend is absolutely right. In common with many other seaside and coastal towns, Blackpool has a lot of small businesses and micro-businesses, and they are precisely the kind of businesses that benefited from the application of the working neighbourhoods fund and who are now suffering as a result of its potential withdrawal.
I want to talk about the situation in Blackpool as it is now. My local authority has told me that, on the basis of a 16% cut, it is looking for cuts of £32 million in its overall budget. Unsurprisingly, that led the leader of Blackpool council to write to the Secretary of State—he has been having quite a sustained correspondence with the Secretary of State, but without a great deal of success. On 6 October he said that he had written in June to highlight the disproportionate impact that the first tranche of funding cuts was having on a needy and deprived local authority and to make a plea that the autumn comprehensive spending review considered a more equitable sharing of any other pain. It did not do that, of course, and he then felt constrained to write again on 5 November saying that his assessment and that of many of his colleagues is that the front loading of formula grant cuts will have an adverse effect of between 12% to 16% next year, which is very significant. He said that there was the anticipation of major job losses in 2011-12 alone and that for a town like Blackpool, where nearly 30% of the working population are currently employed by the public sector and which has seen a 91% increase in JSA over the last two years, such a radical step reduction in central funding would have a catastrophic effect on the local economy. He said that he fully understood the need to reduce the overall deficit over the four-year period but he urged the Government to reconsider their approach prior to the announcement of that provisional settlement in early December.
That is also what all my party colleagues are urging. We are not suggesting that the Secretary of State has a magic wand he can wave to solve all the problems—not that I have ever seen him in Christmas panto. Rather, we are talking about sensible settlements.
We are also talking about the cumulative effect of what this Government have done, because it is not just about the cuts in the working neighbourhoods fund or local government cuts. It is also about what is being done in respect of education maintenance allowances. Some 2,500 young people in Blackpool are now going to be deprived. I went to my sixth-form college last week, where I met the brightest group of first-year sixth formers—all of them girls, incidentally. I have been meeting them for some time. They were all full of enthusiasm for where they were going, and they had all come through the Aimhigher programme. They were also all—bar one, I think—in receipt of EMA, and, of course, they were the last cohort to be receiving that. We are therefore talking about this whole conglomeration of subjects.
The fact is that, even if the Secretary of State believes he has made a significant impact on the current situation, that is not what the journalists are saying. On 25 November, the Local Government Chronicle said that the Secretary of State
“has been rebuffed in a last-ditch plea to the Treasury for funding...Sources close to chief secretary to the Treasury Danny Alexander”—
who was obviously not singing from the same hymn sheet as the Secretary of State today—
“confirmed that the Secretary of State made an unsuccessful plea for more cash earlier this month to mitigate the impact of front-loaded local government cuts.”
The Secretary of State was singing a cheerful song today, but whether he was whistling to keep his spirits up, we will wait to see with the local government settlement.
When we move aside all the statistics, we are talking about the impact of real cuts on real people. I want to conclude by sharing with the House the account of a visit I made to a project in the summer. It is a community garden in a very deprived area in the centre of Blackpool. Everybody had worked hard on it, but the efforts had been co-ordinated by a woman from the council who had worked with the police community support officers and the residents association. The mayor attended, and we all had a wonderful afternoon. At the end the woman from the council came forward and said a few things, and we were then all told to put our hands together and give her a big round of applause because it was her last day. Why was it her last day? It was her last day because she was one of the people losing their job under the area-based grants cut that this Government have brought forward. I do not want—and I am sure many other Members do not want this either—to spend the next 12 months going around my constituency from worthy project to worthy project having similar experiences. Therefore, despite the philosophical and ideological differences between the Government and Opposition Members, I urge the Government to think again. They should look again at the disproportionate effect these policies are having on some of our most deprived communities.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I am pleased to have this opportunity to speak in a debate on local government. As I said in an intervention on the shadow Secretary of State, local government is very important, as is funding local government properly, and I think it is perfectly proper for the Labour Opposition to choose the funding settlement for local government as the general subject for an Opposition-day debate. The title of the debate is therefore entirely appropriate; we should debate the distribution of local government funding and the effects of changes to it.
The only real matter of dispute that I have with the right hon. Lady and her colleagues is that many of them are making comments today as if the settlement had been announced, when instead we are, I hope, using our last chance to tell Ministers what we would like to happen. A whole succession of colleagues on the Labour Back Benches have reeled off figures as if they were the final settlement, and one has complained that one of his councils has not finally decided what cuts it should make. The hon. Member for Denton and Reddish (Andrew Gwynne) complained that Stockport council has not finalised that. My hon. Friend the Member for Cheadle (Mark Hunter) used to be the leader of Stockport council. Those of us who know that council, and many other councils, well understand that it has not yet finalised its budget—and neither has my local authority, which happens to be run by Labour, whereas Stockport is run by Liberal Democrats. They are waiting—
Simon Hughes
No, the hon. Lady entered the Chamber only a few minutes ago and has already intervened twice, and I want to deal with the contributions that have been made.
Most councils wait until the provisional settlement, which will be announced next week, after which they make representations if they feel it is not fair or appropriate, and then there is a final settlement. Of course there is planning for a budget, but today’s debate is an opportunity for us not to be doom-mongers about decisions that have not been taken, but to make sure we put cases and arguments publicly, that some of us have been making to Ministers and colleagues privately, as to what we believe will be the best possible settlement in the difficult financial circumstances of the time.
Barbara Keeley (Worsley and Eccles South) (Lab)
As the hon. Gentleman is accusing the Opposition of saying things in a particular way, we must be clear that local councils have been pleading with Department for Communities and Local Government Ministers for a steer on this because of the unprecedented level of cuts. The comprehensive spending review clearly shows front loading, yet the Secretary of State today still calls that fiction and will still not answer questions. Does the hon. Gentleman not agree that it is right that when councils ask for a steer they should be given a steer, yet we are still not getting a single answer from Ministers?
Simon Hughes
Of course councils make representations both collectively and singly and, understandably, once councils of all parties, including those run by Liberal Democrats, heard the announcement of the CSR in October, they told the Government that they thought the front loading of the four-year settlement was not as desirable as a more evenly spread reduction. I share that view. I intervened on the Secretary of State asking him if there was an opportunity to have a flatter reduction over the four years. He did not give a final answer because, of course, that is a decision that will be left until the formal announcement, but he indicated—I agree it was not definitive—
Simon Hughes
Wait a minute; I want to deal with the question from the right hon. Lady’s colleague first.
The Secretary of State indicated that he was understanding of that point, and it is clear that the Government have done work to see if they can mitigate the effects of a more severe front loading. I, like others, will wait to see the outcome of that. I hope it will be possible to mitigate the effects. If it is, that will be a major achievement; if it is not, it is to be regretted. However, there are many good things about the settlement so far that was announced in the CSR, as there are also some proper concerns, one of which the hon. Member for Worsley and Eccles South (Barbara Keeley) rightly enumerated.
Caroline Flint
Part of the reason that the Opposition decided to use a whole day of Opposition time to debate this subject is that we think we should lobby and pressure the Government on it. I must ask the hon. Gentleman something. Would it not have been better if, instead of having the formula grant profile announced in the comprehensive spending review show a decrease next year of 10.7%, and then reductions of 6.4, 0.9 and 5.6% for the following three years, the Government could have spread the cuts evenly over that four-year period? They have created completely unnecessary mayhem and fear out there.
Simon Hughes
I say clearly to the right hon. Lady that, as I have indicated, I have argued publicly and privately that it would be better for the spending reduction to be spread more evenly. I have been into the Department to make that case. A parliamentary committee of Liberal Democrats from both Houses has collectively made that case, and it includes people who have been leaders of local councils. I understand and share the view that it would clearly be easier for local government to manage a gradual reduction than sudden and bigger reductions in the first two years, a small reduction in the third year and then an intermediate reduction. There is no disagreement on this issue between the right hon. Lady and me, and there is not much disagreement between councils of all colours around the country, which are making that point to the Government. I hope that the Government and Ministers in the Department for Communities and Local Government have been able to make some progress on that point, given that they obviously have to start with an announcement made by the Chancellor which reduces their flexibility—we will doubtless hear when the settlements are made.
Joan Ruddock
I do not know where the hon. Gentleman’s local authority lies in the indices of multiple deprivation, but mine is the 39th most deprived in the country. I say to him that there is a need for him to advise the Government on how to create fairness between boroughs such as ours and the Prime Minister’s local authority, which has been cited and is in the 5% least deprived areas in the whole country.
Simon Hughes
The right hon. Lady would expect me to be sympathetic to that point and I have acted in the past few weeks on that very issue. I have been in to see Ministers; I went to see the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hazel Grove (Andrew Stunell), and civil servants to discuss exactly that issue. I believe that it would be wrong if all the funding currently given to councils, including the working neighbourhoods fund, which was a top-up in order to assist deprived communities, was not taken into account as the starting point for the calculation for the next grant. I have also argued that it would be inappropriate for there to be a greater decrease in percentile terms for authorities such as hers and mine, which have significant deprivation, than for smaller authorities, just because we happen to have had a larger amount of public money before. I have been given reassurance that an upper and lower percentage reduction will be common across all local government—a band above and below which the reduction cannot happen—and that there is a likely inclusion of at least some, although I hope all, of the other funding, not just the core formula grant.
I understand the point that the right hon. Lady makes, and she would expect me to go into bat for deprived communities, because I represent a borough that has a higher deprivation index than the next-door borough of Lewisham—I believe that is the case. Relative deprivation is not a competition we are proud of, but this is something we have to deal with. Of course one of the things that we have to do is try to get a fair settlement that reflects the needs of and deprivation in all the local authorities in that settlement. Again, I can tell her that I have been doing the job that she, my constituents and my local authority, although it is run by Labour, would expect me to do, just as I would have done when my local authority was run by my colleagues.
Simon Hughes
I will not give way, as the hon. Gentleman has intervened several times in this debate and I want to press on.
It is not just local government that is important; I want to pay tribute to councillors, of all parties, who serve in local government and to many extremely good officers in local government. It contains some brilliant officers, some less brilliant ones and, as in any walk of life, some people who may not be in their right vocation. Southwark council has some excellent officers, and I pay tribute to them and thank them for their courteous and regularly helpful service.
We know the background to today’s debate: we have to deal with a huge economic legacy of the combination of international problems, the banking crisis and the previous Government’s policies. We know that we have to save public money and we know that local government has to bear its share. I note that the Department for Communities and Local Government has imposed on itself a larger percentage reduction in its funding than it is asking local government to bear.
There will also be good things in the settlement, according to the comprehensive spending review. For example, it is clear that there will be additional money— £1 billion a year—for personal social services, in order to deal with the fact that there are more older people and people are living longer. That is a good thing. There will also be far fewer ring-fenced grants—90 will reduce to 10—and that is a good thing for most local councillors, who want to have that choice. In addition, a set of local community budgets will be trialled around the country. We should be positive about those good things.
The Government have to take two other things into account. The first is that some councils have much more reserve than others. The second is that some councils have the ability to raise much more money through council tax than others, because they serve much richer communities. Those background considerations are absolutely relevant.
Mr Marsden
On that specific point about revenue-raising ability, does the hon. Gentleman agree that this is why, regardless of philosophical arguments about dedicated streams, the severe attack on area-based grants for councils with significant areas of deprivation has been so devastating?
Simon Hughes
That is why a debate has taken place in which some of us have been trying to discuss a formula that is fair. Some bits of funding that are nothing to do with the local government funding settlement will still go to “affluent” and to “less affluent” areas. Such funding cannot be affected by it, which means that those areas will continue to get public money because it is protected in other ways.
I hope—I was going to say this at the end of my speech, but I will say it now—that one of the things that this Government can achieve, given that they are already a Government of two parties, is to work with the Labour party to try to get a more settled, agreed formula for distributing money to local government. Of course the cake size will vary, but the way in which it is divided between county and district council, and between unitary authorities, metropolitan boroughs and London boroughs, is always the subject of terrible struggle every year and has never been entirely satisfactory. This is neither coalition policy, nor Liberal Democrat policy, but I see no reason, given that we have set up an Office for Budget Responsibility to give independent advice, why we could not have an office that does that sort of job for local government and seeks to offer independent advice as to what the formulae should be. That would take that issue out of the inevitable political bartering, which does not, in the end, necessarily produce the right answer. This involves a terribly complex set of issues and I hope that we can find a better way of doing it.
I wish to make a final generic point and then say a couple of specific things relating to today’s agenda. I know that the Government have met and heard from the Local Government Association and London Councils, which are both cross-party bodies. I shall put on the record the LGA’s five considerations, which I share. I have dealt with one, which is the desire for a reduction, if possible, of the impact of front loading. My right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) has touched on another, which is the desire for an increase in capitalisation limits.
I raised that issue with Ministers the other day. The Government have set aside £200 million to pay for potential redundancy in local government. I understand exactly what the Secretary of State said, which was that we hope that many of the job losses will come through natural wastage and other things, not enforced redundancy. My noble Friend Lord Shipley managed well a reduction in staff when he was a council leader in Newcastle, working with the unions, in a way that mitigated all the worst consequences—that is how it should be done. There are good models for doing that, and they are very much supported by the TUC and its member unions. I have had good and authoritative reports that the real figure is much more like the one that the right hon. Member for Don Valley (Caroline Flint) and I have used and, thus, the total bill may be nearer £2 billion, or thereabouts, than £200 million—that clearly needs to be addressed. It is no good our thinking that local authorities can necessarily find the money that they will need if they are to reduce their staff costs.
Sir Alan Beith
It is perhaps worth reiterating that some authorities could meet a larger proportion of the redundancy requirement out of reserves and that others, through no fault of their own, are not in that position—I mention Northumberland as an example.
Simon Hughes
I remember—my right hon. Friend alluded to this fact—that the situation in Northumberland, which went through an enforced change in its local authority nature, boundaries and so on, was more difficult. Others are in difficult situations, too.
The LGA’s third point concerns accounting for what it calls “missing grants”. There is uncertainty about more than £1.1 billion of specific grants on which councils rely and where the Government have yet to announce future funding levels. I do not know whether the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill), can tell us when he winds up whether those announcements can be made at the same time. The sooner they can be made the better.
The fourth point concerns fees and charges that are set centrally, such as licensing fees, which have often been shown to be inadequate in covering the full cost of the related services and I ask the Government to deal with that across Government. There are many sub-issues with fees and charges. I hope, for example, we stop the nonsense of having differential fees for burials depending on which side of a boundary one lives—[Interruption.] This is a serious point. People who happen to have moved across a boundary, having lived all their life in one authority, find they have to pay, say, 10 times as much to have their late husband or wife buried. Those things are offensive nonsense and we need to deal with them.
The last point is that we need fair grant distribution. That is where I make the strongest plea, alongside the right hon. Member for Don Valley. We must ensure that all the funds that have come from Government to local government this year are the starting point for the calculation for the next year. I have been reassured that things are moving in that direction and I want them to move completely in that direction over the next few days.
London Councils makes similar points. Southwark, like Lewisham, is a borough that has had the protection of a floor and cap, as many authorities have had to. Southwark, like London Councils, argues that funding floors should be set at the highest possible level to prevent cuts falling disproportionately on the local authorities with the highest need. That is important. Those points have been made, by and large but not exclusively, by authorities that are not Conservative-run, but authorities run by the Tories are in that boat, too, as well as authorities where there is a joint administration.
Let me make a final couple of points. Also included should be any other local authority funding that has been cut, if for understandable reasons. For example, in Southwark there was the Aylesbury private finance initiative for our largest estate, which was due to be rebuilt. Because that work had not started, the Government have said that they cannot advance the money. I understand that argument, but it needs to be taken into account as part of the picture. I make a specific plea on that point.
I am conscious that the Government will go down the road of returning business rate control to local government. That is a good thing. I am very conscious that in the localism Bill, which I think is coming into the public domain this week, the Government will give much more discretion to local government on how it raises and spends its money. That is a very good thing. I have always argued that the Department that looks after local government should stand up to the Treasury so that local councils can have the power of general competence, including total general financial competence. For example, they can then borrow against their asset base—their housing stock in the case of Southwark—without having to go to the Government cap in hand to get permission. The Treasury’s hand has been unnecessarily authoritative. I understand why, but in any other parts of the world local council spend does not count in the same way and in the same accountancy column towards public sector borrowing requirement totals.
I have a couple of messages to give local councils through the Government. Again, I shall reflect some things that have already been said. Councils must be careful not to pick on the voluntary sector when times are hard for them. It is easy to do that. It is easy suddenly to decide to take all or the bulk of the money away from organisations that are not in-house. Sometimes, councils must reduce their own management and costs. That might be a more effective way of dealing with reductions than taking money away from the voluntary sector, where local authority funding contributes towards a larger whole. I hope that there will not be any such abuse of the relationship. Voluntary sector organisations are often valuable partners and they need to be given as much support and encouragement as possible.
Siobhain McDonagh (Mitcham and Morden) (Lab)
I agree with the hon. Gentleman, but does he not think that that is the basis of the debate? If the cuts are early and quick—if they have to be decided in three months—people will go for the easy options rather than the restructuring, because the restructuring will take longer to come into effect. Cutting a voluntary sector budget is almost immediate.
Simon Hughes
I will not dissent from that. I am trying to act in a spirit of consensus and I hope that we will be careful. To put it bluntly, there are both good and poor voluntary sector organisations and although I am not saying that they should not have their grants checked and revisited regularly, the good ones need protection. There is sometimes scope for rationalisation in the voluntary sector. In Southwark, the three pensioners’ organisations are becoming one. That should have happened a long time ago—I argued for it—and it will make them a stronger body. I also make a plea that non-statutory youth services should be particularly protected. Colleagues on both sides of the House have argued for that.
Local government must get the message that it should not be paying anybody more than the Prime Minister. It is very simple. Salaries have been ridiculous and unjustified. It has been everybody, and it is not the fault of a council of any particular colour. They have been following each other into this competitive game. To put it bluntly, nobody in the public sector needs to earn more than about £150,000 a year. I am sorry, but I have a really hard-line view about this. We need to start to scale down the ridiculous salaries. If the public sector behaved properly, perhaps we would have some morality in going to the private sector to say that it should not pay such ridiculous salaries either.
Times might be hard, but I ask local government please not to sell off the family silver, which it might live to regret. I am having a local spat with my local council leader because Southwark council has decided that it wants to sell off the three historic metropolitan borough town halls. That is unnecessary. The buildings could be reconfigured and kept in use and they would be far better places and venues that would be far more valuable than the alternatives that have been mentioned.
I have followed the example of the hon. Member for Blackpool South (Mr Marsden) in being positive about trying to find a way of doing things much better in the future. We need common agreement on how to decide the formula. I hope that we will minimise redundancies in all cases, because nobody wants any more redundancies than there should be. I hope that when we get the settlement—probably next week—there will be the maximum collaboration between the major parties to try to ensure that where there is still unfairness, we seek to persuade the Government to make adjustments between the provisional settlement and the final settlement so that the latter is better. This will not be an easy time for local government—no one is pretending that—but I hope that today’s debate will mitigate that and that we can all encourage Ministers in the Department to ensure that they win as far as possible every remaining battle they have to fight with the Treasury.
Steve Rotheram (Liverpool, Walton) (Lab)
I am delighted to have been given the opportunity to speak in this important debate as, once again, yet another announcement —this time on local government funding—will see areas such as Liverpool lose out in favour of more affluent areas of the country. I have no doubt that some Tories on the Government Benches would agree with the rich getting richer—after all, it is part of their political philosophy—but they could at least come clean about it and not try to kid us that this makes things fairer.
Steve Rotheram
Not just yet.
To hear the Secretary of State tell one of my hon. Friends not to take us back to the ’80s shows the brass neck of the man. That is exactly what Labour Members wish to stop. If he wants to know about that torrid decade of Tory rule, I would be happy to sit down with him for a few days to outline the devastation that the Tories wreaked on our great city and specifically on the people of Liverpool, Walton.
This decision on local government funding by this coalition Government will have a disproportionate effect on the area I represent. When I made my maiden speech, I warned—hon. Members can check Hansard—that I would fight against a return to the devastating Tory policies of the ’80s that nearly destroyed places such as Liverpool. That is a fight that I will not shy away from.
The Government are rapidly gaining a reputation for saying one thing and doing another, and I fear that their gung-ho approach to local government funding is yet another shameful example of the widening gulf between the coalition’s rhetoric and the harsh contradictory reality on the ground.
Gavin Barwell
The hon. Gentleman is making a powerful case against funding being cut in deprived areas and the money going to affluent areas. If I told him that, according to the Library, Liverpool, like my authority, had one of the lowest increases of the past five years—a 3% cut from the Labour Government—and that the biggest increase went to Rutland, which got a 25% increase, what would he say about the Labour Government’s record over the past five years?
Steve Rotheram
I would say that it is not just about one specific funding stream; it is about an overall package. Liverpool benefited greatly under the Labour Government —so much so that the hon. Gentleman’s friends on the Liberal Democrat Front Benches used to say that the Lib-Dem controlled Liverpool city council was a flagship council because it had got so much money from the Labour Government. Don’t try to give me lessons about what happened in Liverpool, mate!
In June, the Department for Communities and Local Government wrote about the immediate front-loaded and ongoing savings to be made by local authorities that
“the Government is satisfied that it has adopted a fair approach to making the necessary reductions.”
In the comprehensive spending review, the coalition promised to
“limit as far as possible the impact of reductions…on the most vulnerable in society, and on those regions…dependent on the public sector”.
The Government never tire of reminding us that we are all in this together, in the new age of austerity, and insist that their belt-tightening is fair and progressive. So much for the rhetoric. The reality is that the proposed one-size-fits-all local government finance settlement, with its removal of ring-fenced funding for poorer regions and its top-slicing of the formula grant, is set to hit the poorest councils the hardest—none more so, unfortunately, than Liverpool city council.
Whether the Secretary of State likes SIGOMA or not—he did question its findings—its research shows that of the 20 worst-hit local authorities financially, all but two are in the top 20% of most deprived areas in the country. Conversely, of the 20 councils that do best out of the comprehensive spending review, all but two are in the top 10% of wealthiest local authorities. The SIGOMA report concluded:
“The current finance settlement perpetuates inequality rather than allowing areas to operate on an equal footing.”
SIGOMA is not alone in its findings. Following its own analysis, the TUC has affirmed that the Government’s budgetary policy
“will risk the recovery, increase inequality and threaten social cohesion”.
Tom Blenkinsop
Some interesting facts came out today from the construction industry. The Construction Products Association said that it was going to slip back into recession and the Engineering Employers Federation said that it would not be able to pick up the slack from public sector cuts as the Government have said it would.
Steve Rotheram
I thank my hon. Friend for those comments. Having been a bricklayer and an apprentice, I know the construction sector all too well. I once described myself as the only bricklayer in Parliament; unfortunately, one of my colleagues, who is not present, also did an apprenticeship but he was not indentured, so I can still legitimately claim to be the only indentured bricklayer in the House of Commons.
In addition to the statistics I have quoted and the bodies I have mentioned, the Centre for Local Economic Strategies has noted that the areas most at risk are those with relatively few private sector jobs, high levels of unemployment, poor transport links and high vulnerability to national public sector job losses.
Brandon Lewis
The hon. Member for Blackpool South (Mr Marsden) made some comments about coastal towns, and my constituency fits that bill. When Labour came to power, Great Yarmouth had a couple of the most deprived wards in the country and they were still in the handful of most deprived wards when it left power. Surely the hon. Member for Liverpool, Walton (Steve Rotheram) must agree that it is time to try something different.
Steve Rotheram
I would love to ask the people of Great Yarmouth whether they would like some money with strings or no money at all. I think they would rather have money with strings than what you are proposing—cuts across the board. [Interruption.] That is about local authority spending, not how much money you get. You cannot have it both ways.
Madam Deputy Speaker (Dawn Primarolo)
Order. If the hon. Member for Great Yarmouth (Brandon Lewis) wants to make a further intervention, he should stand and do so, not shout a conversation across the Floor of the House.
Steve Rotheram
I apologise, too, Madam Deputy Speaker. I am quite passionate about this. I do not normally just stand up and say things in the Chamber; I stand up when what you are trying to do affects the area that I represent. Believe me, this is one of the areas where we are going to be most affected.
Expert analysts up and down the country agree that the evidence is overwhelming that the rich will get richer and the poor will get poorer—so much for progressive politics. This might be far too grave and pressing an issue to exploit for party political reasons, but I cannot help but notice the findings of the House’s own researchers that
“the average proportion of grants cut is lower for Conservative controlled authorities than the average for authorities controlled by other parties.”
Tory-led West Oxfordshire district council, which is in the Prime Minister’s constituency and is one of the least deprived in the country, can look forward to a budget increase of up to 37% over the four-year spending review period, while Labour-run Liverpool city council is set to lose—[Interruption.] I would love you to come to Liverpool and laugh in the faces of those people who are going to be forced—
Madam Deputy Speaker
Order. The Minister knows better: if he wants to make an intervention he can do so. Let me say to the hon. Member for Liverpool, Walton (Steve Rotheram) that although he feels very passionately about this issue, he must direct his comments to me in the Chair, preferably not blaming me for the Government’s policies—or the Opposition’s for that matter. He should not respond to any points unless they are made by way of an intervention.
Steve Rotheram
Thank you, Madam Deputy Speaker.
The Labour-run Liverpool city council is set to lose up to 38% of its funding. Clearly, some of us are more “in this together” than others. I mention Liverpool, as I always try to, because it is the very reason I am here in the first place. Let me focus briefly on precisely what the new funding regime means for my neck of the woods. I should point out that the very nature, speed and extent of the cuts represent a double whammy for Merseyside, which is home to two of the most deprived councils in the country—Liverpool and Knowsley. Indeed, Liverpool is the most deprived local authority area in the land according to all the key poverty indicators, despite the transformation of our city into a true international destination of choice.
Robert Neill
I understand the hon. Gentleman’s concern for his native city, but has he seen the local government finance settlement? No one else in the House has.
Steve Rotheram
No, I have not, but if the Minister can tell me that Liverpool will not suffer disproportionate cuts, I will allow him to come back in.
Robert Neill
As the hon. Gentleman has not seen the figures and therefore cannot know what they are for any authority, does he think it right to speculate and scare people when he has no evidence on which to base his assertions?
Steve Rotheram
I am more than happy to give way to the Minister if he can allay the fears of people in Liverpool, Walton. Can he tell them that what I am saying is not true and that Liverpool’s funding will not be disproportionately cut? I did not think so.
Robert Neill
Will the hon. Gentleman wait for the settlement and perhaps look at this then?
Steve Rotheram
What we are doing is preparing for the worst cuts for generations in areas such as Liverpool.
Steve Rotheram
I have already allowed enough interventions, as hon. Members must admit.
Steve Rotheram
I thank my hon. Friend. In the spending review framework, the Government committed themselves to limiting the impact of reductions on areas heavily dependent on the public sector. To meet their stated commitment to fairness, should not the Government apply the same logic to the local government settlement? I will give way if the Minister wants to answer that.
I was speaking about the Tory-led West Oxfordshire district council in the Prime Minister’s Witney constituency, one of the least deprived areas, and about Liverpool, the most deprived local authority area, getting a 38% funding cut. I mention Liverpool, as I always do, and Knowsley. As an aside, both the Labour party and the Lib Dems have had their conferences in Liverpool. I ask the Tories to do the same so that they can see our wonderful city for themselves. Maybe then they would be less likely to destroy all the progress that we have made in the past few years.
George Hollingbery
I have huge admiration for the passion with which the hon. Gentleman defends his constituency. I freely admit that I have little idea how the cuts will impact on Liverpool. However, he probably has as little idea how they will impact on places such as Hampshire, which outwardly may appear to be leafy, rural and wealthy, but Hampshire has suffered a loss of £45 million of formula grant since 2003-04, and expects to lose another £20 million over the next few years. Furthermore—
Madam Deputy Speaker
Order. Not “Furthermore”; it is an intervention. The hon. Gentleman can make a speech in a moment.
Steve Rotheram
I shall be interested to see whether the hon. Gentleman will allow me to intervene, as I have allowed him to do.
Liverpool city council has established that the in-year cuts announced by the Government in May will have a more than £20 million impact in its ongoing annual reductions. Almost half of this will come from the 2010-11 area-based grant programme, the very programme designed to support deprived communities according to their needs. Funding for a programme to reduce health inequalities by reducing smoking will be cut by 48%. The local enterprise growth initiative, which the hon. Member for Bermondsey and Old Southwark (Simon Hughes) spoke about, focuses on increasing entrepreneurial activity. It will lose 14% of its moneys.
The transitional employment programme, which supports the long-term unemployed back into employability and employment, will see a 13% cut in its funding. The working neighbourhood fund, which has been mentioned by other speakers, was introduced under the previous Government to tackle worklessness in deprived areas. It has been done away with altogether, depriving the city of £3.5 million this year alone; and another £3.5 million of cuts have been made in area-based grants which directly affect children and young people.
The Government have been consistently slick in their assurances that the delivery of key services need not be adversely impacted, that the vulnerable will be protected, and that the Government are serious about job creation, tackling the skills deficit and getting people back to work. That is starting to sound like a load of old guff.
Simon Hughes
The hon. Gentleman’s city, Liverpool, is a fantastic city. Whatever our differences, our two parties have run it over the years and they have both contributed to it being the great city that it is. I am not speaking for the Government, but I know that they are keen to try to pull together all the effects of spending changes from all Departments as they affect a city or a region, so that none ends up with an unfair or unnecessarily severe burden. That is a tall order. It has never been done before, but the Government are trying to do it, and I hope that people such as the hon. Gentleman and I will work together with the Government to ensure a fairer spread of funding decisions across the—
Madam Deputy Speaker
Order. The hon. Gentleman knows that interventions should be brief. It is not his role to mediate—not in the Chamber, at any rate.
Steve Rotheram
What a shame that the hon. Member for Bermondsey and Old Southwark is not speaking on behalf of the Government and in a more elevated position. If he were, the concerns that he highlights would be brought to the attention of those making the decisions.
Following extensive research and analysis of the impact on Liverpool of the unfair distribution regime, the TUC summed up its findings as follows:
“Experience on the ground suggests that even at this early stage of spending cuts it is simply not possible to make such steep reductions in spending, without hitting the worst off. The impact of cuts in the area based grant also shows that spending reductions so far have been about far more than reducing waste—front line services have been affected.”
I seriously begin to question at best the competence, and at worst the integrity, of the present Administration when programmes, services and initiatives which clearly contribute to the declared aspirations of the Government are held in such contempt.
I have not even touched on huge job losses, with the compounding impact of central Government cuts, or the longer-term prognosis, and there is much more that I would like to say, but I have been told by somebody not too far away that my time is almost up. I am desperately hoping to prevent the disproportionate effect on the area that I represent. I finish with a plea to the Government ahead of their local government finance settlement.
My hon. Friend the Member for St Helens North (Mr Watts) tabled early-day motion 1088. In it, he succinctly outlines issues of particular concern affecting less affluent areas of the country, makes sensible and reasonable recommendations, and calls on the Government to take serious heed of the incontrovertible facts and to deliver on their promise to ensure fairness. It is future generations that will reap the social consequences of the Government’s unfair and pernicious policies, so I urge coalition Ministers to study carefully the points that my hon. Friend and many other right-thinking Members have made, and to think again before careering headlong into a finance settlement that will prove punitive, self-defeating and irrevocably damaging to those who need and deserve that the least.
George Hollingbery (Meon Valley) (Con)
I pay tribute to the hon. Member for Liverpool, Walton (Steve Rotheram), who spoke with real passion for the area he represents. None of us would expect anything less of hon. Members than to defend the areas that they represent. However, there is no doubt that some cuts had to be instituted, as those on the Opposition Front Bench admitted. There would have had to be cuts, whoever was in control.
In the comprehensive spending review, my right hon. Friend the Chancellor outlined a programme of cuts and spending changes that would allow us to put the country back on a firm footing, among which were changes to local government funding. I know that my saying this is likely to arouse groans from the Opposition Benches, but there is no doubt that, as the Secretary of State pointed out earlier, if changes are to be made to the amounts paid to local government, the period in which they are granted and the amounts in each period, Opposition Front Benchers will have to identify areas elsewhere in Government they would cut. It is no good saying that there are no consequences; there plainly are.
Government Members could talk eloquently about closing hospitals and about body armour for soldiers. I shall not use that ploy, but something will have to give somewhere if we change the numbers for local government.
I shall address one or two of the points made in the document from SIGOMA. I entirely understand why an organisation of local authorities should get together to try to defend their position. Clearly, that is the right and proper role of local authorities in the current circumstances, but one of the points made in the document is about the imposition of floors. I think I am right in saying that the right hon. Member for Greenwich and Woolwich (Mr Raynsford), the former Local Government Minister, was responsible in 2002-03 for the imposition of the floors, which protected some local authorities from huge reductions in local government spending as a result of the formula having changed enormously. The floors have remained until the present day, so any disparity or inequality that might be felt across local government has been entrenched by that rule, which resulted from enormously complicated changes in local government funding rules. It is therefore very difficult at this stage to imagine that in one fell swoop we on the coalition Benches will even out the inequalities created over the past 10 years.
It is reasonable to question the funding formula itself. It has changed a great many times, as hon. Members will know, resulting in enormous confusion across many local authorities and, in my part of the world in particular, a real reduction in funding over a great many years. I have already mentioned some of these examples in the House, but East Hampshire district council saw a real-terms funding reduction of 25% from 2001 to 2010, while Havant borough council saw a 13% real-terms reduction. Havant council has almost no assets. It is not a Wandsworth or a Westminster, with a huge parking income or buildings it can rent out to third parties; it is a straightforward council that takes in council tax and receives grant from the Government, yet its funding has been reduced by 13%.
Barbara Keeley
Would the hon. Gentleman like to inform the House what the balance is between the formula grant and the council tax base for those councils? That is one of the big disparities, and it is not helpful to talk just about the formula grant, because many councils in places such as Surrey and Hampshire have a good, substantial council tax base.
George Hollingbery
I absolutely understand what the hon. Lady is saying. If I remember rightly, the SIGOMA report includes a table—I think on page 4 —of the differential rates of council tax between authorities. I cannot tell her exactly what the numbers are, but the overall band D council tax charged in East Hampshire, taking in the Hampshire county council precept and the local parish precepts, is higher than in the SIGOMA authorities. There is already a disparity in the amount that local citizens pay in my part of the world towards the funding of their councils, which is taken into account in the grant settlement, as I understand it. As I mentioned in my earlier intervention—I apologise again for making it overly long, Madam Deputy Speaker—the amount for Hampshire county council reduced by £45 million between 2003-04 and this year, and it is expected to reduce by a further £20 million over the next several years.
Those are not the only sources of funding for local government—there is the business rate and council tax. The UK Statistics Authority says that 56% of local council revenues comes from the council grant. If we apply the cut that the Government propose to that 56% and look at the totality of what local government takes in, we find that the cuts amount to about 14%, or 3.3% a year. The Government have been brave and transparent in talking about the totality of cuts to the revenue grant allocations, because the cut across local government is rather less.
Furthermore, an article in the Municipal Journal from 4 November last year said that studies of Total Place had suggested that only 5% of all spending in a local area comes through democratically accountable bodies, which leaves 95% to come from central Government—funding that can continue to be spent without the cuts applying, even though there may be cuts elsewhere. Therefore, a lot of the talk that we have heard—about fire and brimstone, a cleansing across local government, and local businesses going out of business because there is no longer any money—needs to be taken in that context. Plainly, a great deal of Government money is still spent locally.
One or two points have been made about the Government not doing anything to help local businesses. Indeed, the converse point—that the cuts will have a disproportionate impact on areas with high local government employment—has also been made. The Secretary of State did not mention it, but the Chancellor has provided for national insurance contributions holidays, which are granted to small business formations and are specifically targeted on areas with high levels of employment in local government—or, indeed, in government across the board. The Government have therefore taken into account the fact that, although there will be cuts in local government, new business formation will be important. Much as many of my colleagues in the south-east would like the NIC holiday to come to the south-east, we have at least some understanding of why it is not.
I do not for a moment misunderstand the fact that anybody who loses their job faces a difficult time, particularly in the current conditions. Therefore, I take seriously the loss of employment in local government. However, it is also worth pointing out—to use the cliché—that when it comes to innovation, necessity is the mother of invention. De-ring-fencing has allowed local councils a world of flexibility to find new ways of doing things: to work differently with partners, and to take budgets that were predicated on particular activities occurring in a certain way and use them differently.
Various representations have been made to the Select Committee on Communities and Local Government, from people across the country and across many subjects, but I was particularly struck by one contribution—I think it was about Birmingham; it could have been about Manchester. [Interruption.] Opposition Members will have to forgive me—we have had many representations. Some 15 or 20 agencies were offering similar services to the local population. If we have such duplication of services in local councils—and I believe that in some of the large metropolitan boroughs we do—there are surely innovations to be made. There is money to be saved, and there are new, different ways of doing things. I commend that to local councils.
Andrew Bingham
For the past two or three years, the council in my constituency has shared a chief executive with Staffordshire Moorlands council, which is not only in a different county but in a different region. The councils now have a shared management team and shared services, which shows the innovative ways in which local authorities can save money and preserve local services for residents.
George Hollingbery
Indeed, and I will return to a couple of examples of my own in a moment.
There is a real need for local councils to work much more closely with third sector organisations in their areas. The hon. Member for Bermondsey and Old Southwark (Simon Hughes) has already made the point that we must not encourage councils to take the easy way out, which is to save money by cutting direct grants to local charities.
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
I hear what the hon. Gentleman says about reinventing local government and finding new ways of doing things. I am still a local councillor, and I agree with him, but does he agree that front-loading the cuts when we still do not have the local government settlement, but when we have had the CSR, will make it harder to do those things? Councils will have less time and will have to go for easier, quicker cuts to balance the books.
George Hollingbery
Indeed. It is difficult to make plans at this late stage, but we have known about the cuts for some considerable time. Most councils have known for at least two or three years that the economic times are difficult. My local councils have been planning for such changes for two or three years. Frankly, it is no great excuse to say at this stage that we do not yet know the level of the settlement. We all know—and we have known for a long time—that it will be difficult.
Gavin Barwell
Did not the previous Government’s 2009 pre-Budget report set out clearly that public expenditure in unprotected Departments was going to fall by 25% over the course of this Parliament? Given that local government was not one of those protected areas, any local authority would therefore have been aware that such reductions were coming, whoever was in power.
George Hollingbery
My hon. Friend clearly demonstrates that there is no real excuse for local authorities pretending that we cannot do anything because we do not know how big the cuts will be. Straightforwardly, we know that there will be cuts, and we know that they will be serious.
There are any number of innovative third-sector partners out there doing a fantastic job. I would like to pick just one example from my local area—although it works out of the constituency of the Financial Secretary to the Treasury, my hon. Friend the Member for Fareham (Mr Hoban)—which is the You Trust. I recently met Nicola Youern, who runs the trust. The You Trust has a fantastic way of dealing with new cases, which Hampshire county council brings to it, of difficult-to-house young people. The trust first asks, “What can we teach you to do for yourself?” and then asks, “What can we teach your relatives and friends to do for you that will stop us having to intervene?” The trust goes through that sequence of trying to help people, before saying finally, “The only way we can deal with this is through a public sector intervention.” If there were more of that thinking across the public sector, we would get better results for less money.
I also welcome one or two changes that I think—I hope—will shortly appear in the localism Bill. The reporting changes are clearly very welcome. As the performance management portfolio holder for Winchester city council until recently, I was in charge of producing the statistics that we had to relay to central Government, almost none of which was used to create real change in the council but almost all of which were incredibly burdensome to collect.
Justin Tomlinson
Does my hon. Friend agree that the statistics rarely, if ever, matched what local residents said on the doorstep?
George Hollingbery
Indeed. My favourite was on the time taken to re-let a council house, whereby the better we did in re-letting a difficult-to-let council property the worse the statistic became, because of the longer average period for which we had not re-let the house. Every time we re-let a house that had been on the books for three years because it was in a poor condition, the worse our statistic became.
The work also involved a huge amount of management time. We had specialist employees dealing with just that issue and a specialist computer system just to monitor performance management, so I very much welcome rowing back the amount of information that local councils will have to report to central Government. I also became extraordinarily fed up with the number of strategies that we had to deal with, and I would very much welcome an assurance from the Minister that we will not have to do anything like as many of those, either.
I remember fondly the black and minority ethnic strategy for Winchester city council, an entirely necessary document.
Tom Blenkinsop
I hear the hon. Gentleman’s comments about reporting by local authorities, so does he have any worries about the £500 rule, whereby anything on which a local authority spends more than £500 will have to be documented?
George Hollingbery
The accounts departments already record most of that information, so I see no great difficulty in councils reporting it more widely. It is already on the books, on computers and there to be reported.
George Hollingbery
If I may, I will carry on.
Strategies were piling up and gathering dust on shelves, but the black and minority ethnic strategy at Winchester city council was, I agree, entirely necessary in small amounts. We, like anybody else, had to be held to account for what we did in that area, but, despite only 1.5% of our population having that background, we were forced to put £50,000 into employing consultants, who produced an enormous great report telling us that what we did already was okay. That is the sort of imposition by central Government to which I hope the localism and decentralisation Bill will put an end.
The wretched Standards Board for England has also accorded a vast amount of work to local government, especially to its legal employees. The board has been used as nothing more than an excuse for the petty battering of officials and parish councillors throughout the country.
We can do more imaginative work in-house, as was said a moment ago. Winchester city, East Hampshire district and Havant borough councils now have a choice-based letting arrangement. That comment has been noted by Opposition Members, but I am sure that such schemes exist in many parts of the country. The arrangement has saved our councils an enormous amount, and we have achieved a better result for our clients. East Hampshire district and Havant borough councils share a joint management tier, and the same individuals hold all the senior management roles in the two authorities: there is one team for two different councils.
Hampshire county council now sends less waste to landfill than any other council in the country, and—furthermore—it generates power for 50,000 homes by incinerating the remainder. Hampshire built itself a new headquarters entirely without cost to the public purse, managed to halve its carbon footprint and is selling other Winchester office blocks that are redundant to its needs. It recently invested with the NHS in 10 state-of-the-art nursing homes, so it is no longer fined millions of pounds for being held responsible for bed blocking—another innovation whereby the council invested to save money. On top of all that, it has made £48 million in efficiency savings—I emphasise, real efficiency savings that can be counted—over the past two years.
I leave my final words to Simon Eden, chief executive of Winchester city council, who says that
“our approach in all this has been to avoid salami-slicing, and instead…re-design services, taking into account changes…made to performance reporting and inspection, planning and in other areas. We have also used that process to look at the best way of focusing on delivery of key priorities for the district, cutting out that which might be seen as lower priority.”
I commend that approach to all local councils and hope very much that the House rejects the motion.
John Woodcock (Barrow and Furness) (Lab/Co-op)
I am grateful for the opportunity to speak in this important debate, and it is good to follow a well reasoned contribution from the hon. Member for Meon Valley (George Hollingbery), in which he made a number of interesting efficiency suggestions. All local authorities throughout the country need to think about the efficiencies that they can fairly and equitably make, but this debate is not about whether local authorities need to make them. It is about the way in which the funding settlement will be distributed throughout the country, and the unfair way in which it will impact on some of the most needy areas in the country.
It is unfortunate that we remain in the dark at this late stage of the funding cycle. The Minister complains that people are speculating about the final outcome, but this debate is his opportunity to tell us definitively what will happen and to reassure the House that the scenarios that the special interest group of municipal authorities, among others, has modelled will not come to pass. I am afraid, however, that in the absence of any hard answers from the Ministers, SIGOMA’s analysis is a good one that will continue to gain a great deal of currency.
Barbara Keeley
Was my hon. Friend as surprised as I was to hear that the hon. Member for Bermondsey and Old Southwark (Simon Hughes) seems to have received from the Government reassurances that have been denied to the rest of us? I wonder whether the Minister is prepared to share the reassurances that he has given to that Member with other Members.
John Woodcock
Members from all parts of the House will have noticed that, and the Minister has an opportunity now or later in his winding-up speech to share that information.
The hon. Member for Bermondsey and Old Southwark (Simon Hughes), who resumes his seat as I speak, gave an eloquent speech in which he took issue with a number of his Government’s key policies, but he fell into the trap that even the Secretary of State has fallen into. The hon. Gentleman said, “Wouldn’t it be outrageous if any local council were to cut the budget of the voluntary sector to try and balance the books?” I say to him and the Minister, however, that local authorities are looking at the dire situation they face and the appalling decisions they have to make, and from the feedback, I have they do not welcome Ministers telling them what they ought not to do.
Christopher Pincher
The hon. Gentleman says that local authorities are worried. Perhaps Barrow and Furness is worried, but a cabinet member on the borough council in Tamworth, which is not a rich place or wealthy borough, says:
“We have been planning for a long time to cope with the spending round. The previous government gave with one hand and then took twice as much back with the other. So local government is accustomed to saving money. I am confident the councils services will grow despite reduction in grants, partly thanks to the new homes onus, removal of ring fenced budgets and less red tape. It is a careful balancing act but not one that will lead to massive service cuts. It is business as usual in Tamworth.”
If it is business as usual in Tamworth, why not in Barrow and Furness—
Madam Deputy Speaker (Dawn Primarolo)
Order. Interventions are supposed to be short—I have said that a number of times—and if the hon. Gentleman reads a very long quotation on to the record he is going to tend to get cut off before he makes his final point.
John Woodcock
I was getting worried, but thankfully there was a question in the last six words of that diatribe. Of course, as hon. Members would expect, I shall go on to talk about the particular difficulties that Barrow borough council will face in the months and years ahead. No one is suggesting that pain will not be felt right across the country. I have to say to the hon. Gentleman that, although every council knew that we were approaching difficult times for continued funding, local authorities have not been given enough time to plan for the front-loaded cut that it seems will be imposed on them. Such an approach will cut into areas that it would not have been necessary to cut if the process had been more spread out.
Bill Esterson (Sefton Central) (Lab)
On front loading, Sefton council is facing £38 million of cuts in year one, which will decrease to £16.7 million in year two and £3.8 million in year three. It has been a hung council for 24 years and local councillors of all parties are used to working closely together and resolving such problems. However, they are now finding it incredibly difficult to do so. I hope that the Secretary of State will take on board the challenges that such councils are facing as a result of front-loading.
John Woodcock
My hon. Friend makes a very good point. His remarks illustrate that, with the top slicing of the formula grant and if the cuts are front-loaded—the Minister is welcome to make the announcement about that today and end the speculation—it will pretty much guarantee that the most deprived areas of the country, which most rely on extra support, will bear the greatest burden of the cuts.
Simon Hughes
On the voluntary sector grant, if the hon. Gentleman looks at the record, he will see that I did not say that such a situation would be outrageous. I was simply asking councils to be careful not to turn all the heat on to the voluntary sector, rather than looking first at themselves.
John Woodcock
The hon. Gentleman is quite right. I was actually paraphrasing the Secretary of State, who I believe said that local authorities would rue the day that they cut voluntary sector grants. I am sure that they will be delighted to hear how they should be balancing their books, given that the cuts are being front loaded so that a great proportion will fall in the next year.
According to the SIGOMA model, Barrow borough council, which covers the majority of my constituency, will receive a proportional cut in funding in the next financial year that will be exceeded by the cut in funding to only two other local authorities. Despite being in the top 30 most deprived council areas, according to the 2007 indices of multiple deprivation—and if the modelling is even close to accurate— Barrow borough council can expect to lose around 20% or up to 25% of its central Government funding next year. Relatively wealthier local authorities will have levels of cuts imposed that are far less than those that might be inflicted on Barrow borough council.
Although this is an Opposition day debate and many Labour Members have spoken with great passion about the huge damage that could be wrought on their constituencies, Government Members should be clear that this is not simply a partisan issue. Councillors from all parties are concerned about the potential cuts. I hope that the Minister is aware of a letter from the Conservative leader of Barrow borough council—perhaps he will confirm whether he has received it—who I think has written to him or to the Secretary of State to express his concern at the disproportionate cuts that will hit Barrow severely if what is proposed is followed through next week.
Tom Blenkinsop
Conservative leaders in Barrow and in Stockton and an independent mayor in Middlesbrough all say that these cuts are disproportionately hurting the north compared with the south. Does my hon. Friend think that the Secretary of State would consider those people to be the cigar-chomping communists that he talked about in a recent article in Total Politics magazine?
John Woodcock
I am not sure who the Secretary of State would consider to be a cigar-smoking communist. However, my hon. Friend makes a good point. It is not solely Labour councillors or Labour MPs who are speaking up about this matter and it is not just the north of England saying to the south of England that the present funding arrangements need to continue. We are making the case for the broad approach taken by the previous Labour Government. They recognised that areas where deprivation, poverty, unemployment or economic isolation are entrenched need extra resources to improve their situation and to grow the private sector in a way that all hon. Members want to see.
Geographical isolation has always posed economic challenges for the area of Cumbria that I represent. That is never more so than in periods of recession or limited growth. Savage cuts in funding to the local authority at such a time can only exacerbate those challenges. A vicious cycle will be created because not only will jobs directly provided by the borough council disappear—taking with them the multiplier effect that they have within the local economy—but the prospect for investment that will attract new jobs and businesses to the area will also go. Over the past decade, local authority funding has worked well in partnership with funding from the regional development agency to stimulate growth in the Furness area. The situation has not been perfect and we have wanted some things to be more efficient. However, there has undoubtedly been a balance positive over the past 10 years, and there are grave concerns about that being cut.
The people of Barrow are watching anxiously. The Government have imposed added uncertainty on the region through their delay of the vote on the Trident replacement project, which will sustain many thousands of jobs in Barrow’s shipyard for decades to come. Such a severe cut to funding will strike a real blow to economic confidence in the area.
However, this is not simply about Barrow or any one area. The matter is also about more than swingeing cuts to local government funding on its own; it is about whether we make the ideological leap into a funding model and into a public policy world where the funding of local areas is blind to the real needs within those areas. Such a simplistic approach may be superficially attractive to some coalition Members, but they must know that the reality will be neither fair nor progressive. Such cuts will mean that the poorest areas of the country carry the greatest burden of cuts, while wealthier areas escape relatively unscathed.
There is still time for the Government to rethink such an approach. It cuts adrift the most economically vulnerable areas of Britain—Barrow is counted as one such area. These cuts would not only jeopardise economic growth in Barrow, but could lead to a situation where any recovery is geographically lopsided and passes by many of the most deprived areas of the country. If the Government want to prevent a situation in which one sector or one region overheats economically, they must think again on this.
I hope that they will listen to the strong calls that have been made in this House and by councillors of all parties across the country to think again about the settlement that they are about to impose—to think about its level, the way in which it is being front-loaded, and the fact that it seems disproportionately to hit some of the areas which, at this difficult time for the country, need our support the most.
Andrew Percy (Brigg and Goole) (Con)
I am glad to have caught your eye, Madam Deputy Speaker, so that I can contribute to this important debate. There have been many interesting contributions, on both sides of the House, in which Members have put the case for their particular councils and areas with some passion.
Before I came to this House, I served for 10 years as a city councillor. In fact, I was exactly one half of our group on the council—I doubled its size when I arrived. However, our lack of electoral success does not mean that we were not involved closely in running the local authority. Our council was originally run by Labour and then eventually became one with no overall control, so we were heavily involved in running it for several years.
We have heard some very thoughtful speeches today, particularly from the hon. Member for Bermondsey and Old Southwark (Simon Hughes), who made some sensible and interesting points. In relation to burials, I can certainly relate to the issue that he raised about people on different sides of the same street, in some cases, paying different amounts. Anything that the Government can do to alleviate that would be greatly appreciated.
However, some of the speeches have been more about creating and enforcing divisions where they may not exist, and that has not been helpful to the debate. Neither has the scaremongering that has occurred in some cases, although that does not apply to the hon. Member for Barrow and Furness (John Woodcock), who made a sensible contribution. That approach may get headlines in local papers, but it will not do anything to protect services, or do anything for the people who work in local government, many of whom are dedicated public servants.
Karl Turner (Kingston upon Hull East) (Lab)
The hon. Gentleman referred to the contribution by the hon. Member for Bermondsey and Old Southwark (Simon Hughes); I, too, agreed with much of what he said. However, does the hon. Gentleman agree that, if the hon. Member for Bermondsey and Old Southwark had started by saying that, during the election, his party agreed with the same deficit reduction policy as mine, his words might have been more plausible?
Andrew Percy
I am not sure how I am supposed to respond to that intervention, but I suspect that it has served its purpose. However, the hon. Gentleman’s Front Benchers have told us absolutely nothing about what they intend to do. They cannot have a serious debate on any subject regarding public spending unless they come forward and say what they would do. All we know is that their plan is to protect local services. Is that still the case? If so, something else would have to be cut: is it to be schools or the health service? They have no credibility. It may get them a few cheap headlines, but it will do nothing to contribute to the debate about how we tackle the very serious deficit which this country faces.
Simon Hughes
It was unfair for the hon. Gentleman to be asked a question about what I said, so I had better give him the answer, which lies in something that he said earlier. He will know from his city council experience that when one is not running the show oneself, one has to work with others—by definition, one cannot get all one’s own way. That is fairly obvious.
Andrew Percy
Absolutely. That is what we should be doing on an issue as important as this. We should all be working together on the whole way that local government is structured to try to change it for the better.
Andrew Percy
I will give way in a moment to my train colleague; we sometimes catch the same train.
Lots of references have been made to going back to the 1980s, or to the 1970s and “Life on Mars”, but some of the contributions have been like listening to “The Twilight Zone”. In my 10 years serving as a councillor under the previous Labour Government, I seem to recall the picture not being quite as rosy as that painted by Labour Members. We have heard many comments about Conservative and Liberal councillors criticising this Government’s settlement, although we do not know what it is yet. In my 10 years on the council, Labour, Liberal and Conservative councillors tended to criticise the settlement coming forward from any Government. That is the way of local government, largely because the formulae are so complex that there is always something that one is not happy with in any settlement.
When I was a local councillor, our authority went through a number of assessments, first, through the corporate governance inspection regime, and later through the comprehensive performance assessment regime. Labour Members cannot possibly be defending the millions of pounds that went into those schemes. I will explain what those schemes did to a city council such as Hull, which at the beginning of the Labour Administration had some of the most deprived communities in the country, and still had them 13 years later. If hon. Members want to carry out a value-for-money analysis of that, I will leave it to them to do so. The decisions that we were forced to take as a result of going through the CGI process cost our city council millions of pounds over those 10 years.
The council, which was Labour-run, was judged to be a failing council. There was some fair criticism, no doubt, but I do not know whether we needed the expensive regime process that came in to tell us that the authority was not necessarily being run as it should be. One of the most appalling recommendations that followed the CGI process was that we should appoint five corporate directors, but they were not to be employed on the same salary as our previous service area directors—no, we were to employ five corporate directors on salaries of £105,000.
Justin Tomlinson
Like my hon. Friend, I served for 10 years as a councillor. I fully echo his point, given the number of times that we were encouraged, following inspections, to spend huge sums of money on members of staff just to prove that we were heading in the right direction.
Andrew Percy
I thank my hon. Friend for that intervention. This is not something that my council experienced on its own—it happened across the country, as we know.
As I said, we were expected to pay our corporate directors a salary of £105,000, which most people in the city of Hull, and indeed across east Yorkshire and northern Lincolnshire, can only dream of. Then, in time, we had to appoint a new chief executive. Needless to say, they were not appointed at the same salary as the previous chief executive—there was a massive salary increase that had a knock-on effect on other local authorities in our area, which judged themselves against how much the neighbouring authority was paying. If we cannot get people to work in local government on salaries lower than that of the Prime Minister, we are doing something badly wrong.
I also well remember the settlements that we used to get from the Labour Government—it was a case of giving with one hand and taking away with the other. Nowhere was that more clear than in the best value process, which required us to measure 100 to 200 different things and report back to central Government. One of our best value performance indicators was to measure how many of our park benches had arms. I am sorry, but when I go drinking in the Dog and Duck, or in my real pub, the Percy Arms—[Interruption.] It is conveniently named. People do not come up to me and say, “Andrew, what we want you to do as a local authority is to measure how many park benches have arms.” They want their council to be providing services—over the past couple of weeks, gritting, snow ploughing, and so on. They do not want it to be spending hundreds of thousands of pounds every year reporting back on such silly measures.
Jonathan Reynolds
Is the hon. Gentleman suggesting that local authorities should be subject to no inspection regime whatsoever?
Andrew Percy
No, that is not what I said. I am saying that local authorities should be subjected to an awful lot less inspection, and that we certainly should not be running around paying people fat salaries to go measuring how many park benches have arms. If Labour Members are seriously suggesting that they want to maintain that system, I will happily give way to the hon. Gentleman so that he can explain to my constituents why my local council should continue to do that.
We all understand that there has to be some measurement of public services, whether they are in schools, the health service or local authorities, but we have to consider the proportion of time, money and resources spent on that. Under the previous Government, it got completely out of hand—some of it was well meant, but it had unintended consequences. It was alleged at that time that money was thrown at some councils, but it was not always thrown to provide better services; often it was spent on employing more people to sit behind desks and measure things that the public would, frankly, not consider to be a priority. That is what happened in my authority in relation to councillor training. We were suddenly told, following our CGI and CPA inspections, that we had to spend more taxpayers’ money on training councillors to do the job that political parties should ensure that they can do before they stand for office. That is why I refused to undertake councillor training—perhaps that says a lot about me.
One of the most ridiculous things that was produced by our council—no doubt by somebody on a good salary—was a guide to professionally appropriate language for councillors. At great expense to the taxpayer, we were issued with a guide to tell us that we must not call women flower, duck or love. If that is considered a good use of taxpayers’ money, I am afraid that I am in a different camp.
My other recollection from the past 10 years serving as a local councillor is that, although everything was fantastic and rosy, as we have heard from Labour Members, there were considerable hikes in council tax. The last time the Labour party ran Hull city council, it raised council tax by 10%. If that is evidence of good central Government funding to some of the poorest authorities, I do not know what planet I have been living on.
There is a sensible debate to be had about local government funding, but today’s attempts to create division are unhelpful. The hon. Member for Barrow and Furness made the point that I was going to make.
Tom Blenkinsop
I thank my fellow travelling companion, on certain days, for giving way. Labour Members are not coming up with scare stories. My information comes from the independent mayor of Middlesbrough and the leader of the Tory council in Stockton. We have also heard the example of the leader of the Tory council in Barrow. Those people have legitimate fears about the Government proposals. Yet again, we hear Back Benchers saying that they are aware of the situation, while the Minister says that he does not know what figures or information we are talking about. That only perpetuates the fears. Does the hon. Gentleman appreciate that?
Andrew Percy
One of the burdens of local leadership is to take the information that is provided and decide whether to perpetuate a possible myth that would cause hundreds or thousands of people to fear for their jobs or to disseminate the information differently.
Andrew Percy
I will not give way any more because I have detained the House already and do not wish to whine on for too long.
Division has been created today by the image that many Tory shire authorities around the country are about to get a windfall and are doing very nicely, whereas everybody else faces cuts. No doubt there will be the slaying of the firstborn and all the other extreme language that we have come to expect from Labour Members. Such arguments are not helpful. I represent Goole and East Riding, which have some of the most deprived communities in England. East Riding suffers from being part of a larger authority that has very wealthy areas, with the consequence that its funding settlement has been among the worst in the country for the past decade. The council has tried incredibly hard over the years.
Andrew Percy
No, I will not, because the hon. Gentleman has had a lot to say today.
As the hon. Member for Barrow and Furness said, large rural authorities, as well as having considerable pockets of deprivation, face other challenges that are not taken into account. One of my two authorities is the largest unitary authority in the country. It is time that we looked at the structure of the grants system and made it take account of issues of rurality. For example, we know that rural poverty is hard to identify.
If the hon. Member for Scunthorpe (Nic Dakin) speaks, I am sure that he will talk more about our Labour local authority, which seems to take a different line on the spending cuts. I will allow others to conclude whether that is for political reasons, given that there are elections next year. However, my Conservative-run authority of East Riding has accepted that it will be tough. It has made decisions to prepare for that over the past two years, because it has known that it is coming. It knew what the Labour party was saying about 25% cuts—some of the biggest cuts in history—coming its way, so it started to make decisions accordingly. Even after the comprehensive spending review, one of my local councils said clearly:
“The programme involved a carefully planned reduction in expenditure in response to anticipated funding cuts.”
The council had been planning for the cuts already. Any half-decent leader of a local authority should have had that in mind, not least because they should have seen the previous Government’s plans. It is nonsense suddenly to pretend at this late juncture that it is all wicked and terrible, that nobody could have seen this coming, and that it would not have happened in the strange world that the Labour party currently seems to inhabit.
I have highlighted some of the waste and inefficiency that I saw as a local councillor. There are some very good people working in local authorities and providing services. The challenge for local authorities is to navel gaze, to look closely at what they are doing at the moment and to decide whether they can do that better. I give way one last time.
Justin Tomlinson
Does my hon. Friend agree that the decision to publish expenditure over £500 will allow a greater number of eyes to look over the information and identify much needed efficiency savings?
Andrew Percy
Of course I agree. That can be done relatively simply through programmes such as Oracle, which my former council spent millions of pounds investing in—perhaps investing should be in inverted commas.
Andrew Percy
I will give way because we are near neighbours and I like the hon. Gentleman.
Karl Turner
I am very grateful. I am tempted to agree with some of the points that the hon. Gentleman makes, but will he be kind enough to admit that when he was a councillor in my authority, I never heard him complaining about the grants that he received from my party in government?
Andrew Percy
The hon. Gentleman has obviously never been to a Hull city council meeting. Forgive me; after he was selected, he did come along. The first hour of most council meetings tends to be spent railing against whichever Government are in power and saying, “We haven’t got enough money. Can we have some more please?” I was no exception. I spent 10 years saying, “Wouldn’t it be nice if we could get a bit more?” The serious point is that, whenever we put forward an alternative budget, it was fully worked out and contained huge savings on such things as building rationalisation.
Andrew Percy
No, not cuts—building rationalisation. There appears to be an irregular verb: they make savings, we make cuts. Any hon. Member who believes that we can continue to fund local government at the same level as in the past couple of years is living in la-la land. Nobody with a serious agenda would suggest that.
I make one final plea to the Minister on the funding of fire authorities. I have the highest regard for the fire authority in Humberside. In the past couple of years, it has faced challenging times because of changes to legislation made by the previous Government. Although there is an acceptance that savings must be made in fire authorities, I urge the Minister to keep a close eye on them and to ensure that reductions impact on the front line as little as possible.
The message should go out to all councils that there are tough decisions to be made, but that they can be made in a way that protects front-line services if our local leaders are brave enough. Local councillors have the choice of whether to scaremonger and make political points in the run-up to next year’s local elections, or, like my well run Conservative council of East Riding, to get their heads down, get on with it, make savings, but pledge to protect services.
Madam Deputy Speaker
Order. May I remind hon. Members that some 13 Members still wish to contribute to this debate, and that the wind-ups are due to start at 9.30 pm? Out of courtesy to their colleagues, I therefore ask hon. Members to pay a little bit of attention to the clock and do the maths themselves, to ensure that everybody can speak, otherwise we will have to have a time limit.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
I am grateful for the opportunity to speak in this very important debate. I will echo many of the sentiments of my hon. Friends and of many council leaders of all political persuasions up and down the country.
The speed, depth, spread and front-loading of the Government’s cuts to local government funding are unfair and unjustifiable. The devastating impact that they will have on the most deprived communities in our country, including many in my constituency, demonstrates that the coalition’s pledge to
“ensure fairness is at the heart”
of its decisions is as phoney as the Liberal Democrats’ pledge not to increase tuition fees.
The Government are using the deficit as an excuse to pursue their ideological aim of shrinking the state and destroying public services on which ordinary people rely. The Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill), certainly got it right when he said in the House on 10 June:
“Those in greatest need ultimately bear the burden of paying off the debt”.—[Official Report, 10 June 2010; Vol. 511, c. 450.]
The Government are balancing the budget on the backs of the poorest in our society, something that the Chancellor said he would never do.
In October’s spending review, the Chancellor announced cuts to local council funding of £5.6 billion. Although that in itself might seem like a shocking figure to anyone listening to the debate, the biggest scandal of those cuts is in the detail. DCLG figures show that far from the cuts hitting all communities across the UK equally, some councils will not see cuts to their budgets. In fact, they will get an increase in funding.
Over the next four years, the worst-hit councils will be in some of the most deprived cities and communities in the country. Hastings, Burnley, Blackburn, Hull and Barrow, and Liverpool city council which covers my constituency, are all in the most deprived 10% of councils in the country, and those councils will have their funding cut by at least a quarter, some by as much as a third. That, as we learn from the figures available from the Library, is while two of the least deprived councils in the country, West Oxfordshire and South Cambridgeshire, will have an increase in funding of up to 37%.
It cannot be a coincidence that every single council forecast to see an increase in its funding of between 27% and 34% is Conservative-controlled—and that at a time when my constituents are learning that Liverpool city council estimates that the city will be hit with £1 billion of cuts over the next four years. I repeat that figure: £1 billion. It simply is not fair. That follows the 9% cut to our area-based grant that Liverpool sustained earlier this year, before the Budget—the largest of any core city across the UK.
My hon. Friend the Member for Liverpool, Walton (Steve Rotheram) articulately outlined the raft of cuts that Liverpool will sustain, which are in the process of being instigated. The truth is that we are not all in this together. The Government have a plan for unfair cuts that will support areas where it is electorally beneficial and hit those where it is not.
The Chancellor would have us believe that after the Government have cut back the state, making thousands redundant, the private sector will be there to move in and clean up the mess. If only it were that simple. The Government underestimate the relationship between the public and private sector. Far from increasing private sector demand, cuts to local government will damage small and medium-sized enterprises that rely on local authority contracts. Some £20 billion of the local government procurement market goes to SMEs, and the Federation of Small Businesses has stated that many small firms rely on public sector contracts for 50% to 60% of their turnover.
In addition, the cuts will reduce consumer demand. In some parts of Merseyside, 60% of the work force rely on the public sector for their income. For every £1 that a local government worker earns in Liverpool, they spend 70p in the local economy. When public sector wages are taken out of our local economy, we will see local businesses close, a spiralling welfare bill and public services under strain because of underfunding. It is bad economics and bad government. The Government are hitting the poorest hardest and tearing the fabric of our society. What this country desperately needs is jobs and growth, and what the Government have chosen to do will lead to misery and despair for people right across the UK, particularly my constituents.
Simon Hughes
I was perplexed when the hon. Lady said that the Library had stated what the outcome of the review was. I have just read the Library note again. She is entitled to her express her concerns, but she cannot suggest that the decisions have been made when we have not had the announcement yet. We have not even had the provisional announcement. Please will she just back off from all this shroud-waving stuff?
Luciana Berger
The figures have been arrived at from the comprehensive spending review, which is freely available to everyone in the House.
Luciana Berger
I can hear comments from the Minister, and if he would like to say that it is not true, I will give way to him.
Robert Neill
I do not often intervene when time is short, but if the hon. Lady is competing to make the most cliché-ridden speech yet heard in the debate, she might at least have the decency to accept that she is citing figures that have no verification at the moment. She shames her argument by the cynical way in which she makes it.
Luciana Berger
Will the Minister therefore reject the analysis of many organisations, including SIGOMA and the Library?
Tom Blenkinsop
I do not think the Minister can question the integrity of my hon. Friend’s speeches, given the bicephalous nature of the debate. Back Benchers are saying that we all knew the cuts were going to happen, and that it was all on the cards, but at the same time the Minister is saying that there are no figures to draw upon.
Luciana Berger
I conclude by saying that I urge the Government to think again and not to introduce these savage, front-loaded, unfair cuts that will have a disproportionate impact on the areas and communities that need the most help.
James Morris (Halesowen and Rowley Regis) (Con)
It is a pleasure to follow the hon. Member for Liverpool, Wavertree (Luciana Berger).
As other hon. Members have remarked, the debate comes at a crucial time for local government. Many local authorities have been preparing for these tough times because, as others have pointed out, if there had been a Labour Government there would probably have been cuts of about 20 to 25% in local government anyway. Responsible local government leaders and chief executive officers have been making plans over the past two years to deal with the overall fiscal situation that we face. In my previous capacity before coming to the House, as chief executive of Localis, the local government think-tank, I worked with a number of local authorities across the country that were already beginning to make strategic plans to cope with the situation. They knew that whatever the outcome of the general election, there would be significant service transformation.
I think we would all agree that the outcome of the comprehensive spending review is a tough settlement. As has been pointed out, we do not know the exact figures that the Minister will reveal next week, but we know they will be tough. However, the review also provides local government with a serious opportunity to consider how it can transform its services and improve its service delivery.
Some Opposition Members have touched on the hypothetical distribution of the spending cuts around the country and questioned their potential fairness. As the hon. Member for Bermondsey and Old Southwark (Simon Hughes) pointed out, the way in which the formula grant is calculated is very complicated, and we would all agree that for many years it has been thought to be completely lacking in transparency. I agree with him that there is an urgent need to reform how we calculate the distribution. In fact, in the last Parliament, the Communities and Local Government Committee recommended that the Government increase the transparency of the existing grant allocation process. I hope that will form part of the Government’s review of local government finance, because more transparency in the allocation process is critical.
I represent a constituency that straddles two metropolitan authorities in the west midlands—Dudley and Sandwell—one of which is Conservative-controlled and the other is Labour-controlled. My central focus is to ensure fairness in the grant allocation process. However, there is a discrepancy between these two metropolitan authorities. Dudley metropolitan council receives £60 million less funding than Sandwell metropolitan authority. They have similar levels of population and deprivation, yet there is a £60 million discrepancy. I am not making a value judgment about either authority; I am simply saying that we need to get to a point where this grant allocation does not throw up such significant discrepancies, not just between metropolitan boroughs and the shires—that has been debated tonight—but between metropolitan authorities within particular regions.
Funding shortfalls were not the only legacy that Labour left the country. As my hon. Friends have argued, the previous Labour Government kept local government on a tight leash through centralised control and regional bureaucracy. The changes implemented over the past 13 years have stifled innovation locally, and given local government and communities the feeling that they have limited control and ability to make decisions and effect change. Unaccountable quangos, such as the Standards Board for England, the regional development agencies, including Advantage West Midlands, and the regional spatial strategies, all contributed to this feeling, and I am pleased to say that they are all on the way out. Removing those unelected, unaccountable and unwanted regional structures and bodies is a first step in a vital development for a new era of local government.
Tom Blenkinsop
What will areas without a local enterprise partnership do to get money through the regional growth fund?
James Morris
They will need to make clear arguments to the Department for Business, Innovation and Skills and the Department for Communities and Local Government about why there should be a local enterprise partnership. However, local politicians should be arguing in favour of making applications to the regional growth fund because, even outside the LEPs, businesses, the voluntary sector and local authorities can make applications to the regional growth fund.
Local authorities will now be given back responsibility from central Government to start making real decisions about how they spend their money. As the Secretary of State said, the Government have freed up, or un-ring-fenced, grants worth £7 billion from 2011-12 onwards, which the Local Government Association described as
“an important move towards a simpler funding mechanism that will help councils do their job”.
However, that should be only the beginning. There is huge scope for the introduction of other levels of financial innovation in local government. For example, hon. Members have talked about the potential productive use of tax increment financing. This lack of ring-fencing, this devolution of financial autonomy to local government, should be only the beginning. We also need a systemic reform of the services delivered and a re-evaluation of how local people can influence the way services are run. This transformation, with the coming presentation of the localism and decentralisation Bill, is at the heart of Government policy. A bottom-up approach to service provision is vital.
Graham Jones
Does the hon. Gentleman agree that a bottom-up process involves cost, and local authorities are worried now that such a process, which he has suggested, will double the pain following the cuts in the comprehensive spending review?
James Morris
Over the past 13 years, as I said, we have had centralised policy dictated from Whitehall. At a difficult time for local government, it is even more important that we invert that pyramid and have a bottom-up decision-making process in which local government can take more control of its decision making.
Mike Freer (Finchley and Golders Green) (Con)
Does my hon. Friend agree that top-down policies cost more than bottom-up ones? Under the previous Government, local authorities had more than 1,000 targets to report on, which cost my local authority £3 million a year.
James Morris
My hon. Friend makes a very good point. What he says is true.
The Government have asked local authorities and businesses to join forces in a bottom-up process, where they feel it appropriate, and through local enterprise partnerships, rather than top-down, regionally imposed structures. That will allow for economic development to be based on genuine local economic geographies, for investment to be tailored to local areas, and for LEPs, such as the one I have been advocating for the black country, to focus with laser precision on the particular issues affecting the 1 million people living in the black country.
That also illustrates that local authorities are capable of working together, often across political boundaries, to deliver services more proactively. In my region, Dudley, Sandwell, Wolverhampton and Walsall councils are demonstrating, by working together on shared services, such as information technology, trading standards, legal services and human resources, that we can save money and deliver better services for local people. That is happening across the country. For example, Hammersmith and Fulham, Westminster and Kensington and Chelsea councils are implementing a substantial shared-services programme across education and other services.
Andrew Bingham
My councillors would not forgive me if I did not intervene at this point. I have mentioned High Peak borough council already, but with its shared services with Staffordshire Moorlands district council, we saved more than £1 million last year, and will save a further £1.27 million this year. That exemplifies my hon. Friend’s point.
James Morris
My hon. Friend makes a very good point. This is the future of local government—working together, shared services and making savings, while delivering services more effectively.
I have long been an advocate of place-based budgets, which were touched on at the beginning of the debate. To give the previous Government their due, they introduced the Total Place pilots. Regrettably, it took them12 years to come up with the idea, but it was a good one. The implementation of place-based budgeting can radically change how services are delivered by pooling funding from a wide range of public, private and third sector organisations to tackle specific issues. I welcome the fact that the Government have announced that initially 16 areas will focus on the broad theme of helping families with complex needs. That model will help to make the delivery of services cheaper and allow for an improved focus on the needs of specific communities and individual users. This model needs to be expanded to encapsulate further policy objectives in the medium term. The Local Government Association estimates that doing so could save £20 billion a year by the end of this Parliament.
There are examples up and down the country of local authorities taking up this strategic challenge. As the Minister remarked, the recent announcements on public health demonstrate new roles and potential funding streams for local authorities that are also very welcome. However, that is not the only way to improve service delivery. The Cabinet Office recently introduced a right to provide for employees of public sector organisations. What this will mean in practice is the extension of mutuals and co-operatives in the provision of public services. The people at ground level often have a knowledge and understanding of the issues at hand, and they will now be able to start delivering services better. I am keen to see this model progressing in my constituency, and I can see the potential of mutuals in offering local services and youth services. The Government are also committed to providing local people with specific powers to improve their local area. These include devolving planning reform back to communities from unaccountable regional quangos, allowing local people to elect their own mayors and police commissioners, and extending the use of local referendums.
In summary, therefore, power is being handed back to local authorities, public sector workers and local people. Unlike what happened during the past 13 years, this will be real localism in practice, not the top-down centralisation that was passed down by the previous Labour Government. Such an approach can lead to a more personalised approach to the delivery of services, greater accountability and transparency and, crucially, given the economic mess, real savings, which the Local Government Association estimates could be as high as £20 billion over this Parliament. Local authorities need to see the current situation as an opportunity fundamentally to rethink how they deliver services, so that they can begin to do so more efficiently, more effectively and in the interests of the local people they serve.
Madam Deputy Speaker
Order. There is still a large number of Members wishing to participate in the debate, so I am going to impose a time limit on Back-Bench speeches, to see whether we can manage to get everyone in. We still might not, and the time limit might need to be revised. I should like to inform each Member that there will be a nine-minute limit on each speech, and that will be reviewed if there are still a lot of Members waiting to speak.
Mr Dave Watts (St Helens North) (Lab)
I am delighted to be able to take part in this important debate. I do so not only as the MP for St Helens North but as the chairman of the all-party parliamentary group on the special interest group of municipal authorities. Several Members have referred to the SIGOMA document, and I would recommend reading it to anyone. I know that the Minister has already read it. I would also recommend that he read the document produced by the Alliance group entitled “Hard Times”, which will nail some of the lies we have heard over the past few hours. I know that the Minister has read it, but I doubt whether the Secretary of State has done so.
Before I move on to my main points, may I say to the hon. Member for Bermondsey and Old Southwark (Simon Hughes) that it will not wash if he tries to take no responsibility for the cuts that are heading his constituents’ way? He said he did not want to see cuts in voluntary sector budgets, or in leisure and youth service budgets. He said that he did not want to sell the family silver or sell off any assets, but he is going to see cuts in all those areas because it will be impossible for his council to make the cuts that are heading its way without doing many of the things he does not want to do.
When the Minister responded to an Adjournment debate recently, he got very excited. I notice that he has also got very excited today. May I suggest that he keeps cooler than he did in the previous debate, because a number of us are worried about his health, and we do not want anything to happen to him before he has the chance to sum up the debate?
I should like to touch on the background to the cuts, the fairness of the last round of cuts, and the question of who will be affected by the cuts heading their way. I should also like to address the key issue of what the Government need to do to prove their own message that we are “all in this together”. I want to make it clear from the start that, like my own party, I accept the need for some cuts in public expenditure, and that local government had to make its contribution. There is no doubt that we had to reduce the deficit, and my party has been responsible for setting out how we would do that. The difference between us and the Government is the mix of tax increases and cuts. We also have a different view of the period over which the cuts packages should be spread. We would spread them over a much longer period than the Government propose, and we would not front-load them. We have heard a lot about front-loading today, and it has been suggested that the Secretary of State is going to review the position on that. The reason that most local authorities and communities are concerned is that the spending review made it quite clear that that is what the Government intend to do. I suspect that they are now trying to retreat from that position, knowing the implications of their proposals in their own areas as well is in ours.
My constituents accept that there has to be some pain and some cuts, but they do not like the fact that this same Government, while making dramatic cuts in public services, have allowed the banks to continue to pay massive bonuses to their staff and given the banks—the banks again!—a £1 billion tax cut. The Government have also now reneged on a promise to publish the details of those bankers who were being paid large bonuses. My constituents accept the need for cuts, but they do not think that the Government have been fair with them. They want to see a much fairer package of cuts and tax increases to address the plight we are in. My constituents—and, I suspect, those of the Minister—know who is at fault for the present financial crisis: it is not the previous Labour Government but the bankers, here and across the world, who turned the world economy upside down some months ago. It was only the straightforward action of the previous Labour Government that prevented the kind of recession that we saw under the last Tory Government.
What do my people want? They want a fair system of cuts. If there are to be cuts, they want to ensure that they are fair. They want to ensure that the most deprived communities and the most deprived people are protected, and that the cuts that have already been made in our communities are taken into account in any future round of cuts. They also want the cuts to be adjusted so that councils—not just ours but Liberal and Tory councils as well—will have the time to adjust their budgets. That means that we want to see more back-loading, rather than the front-loading that the Government are proposing.
It has been suggested that this is also about efficiency. The Secretary of State is quite good at putting out stories about the cost of plant pots in the Department for Communities and Local Government but, quite frankly, that is a smokescreen. These cuts will hit some of the most well run local authorities, including my own. My local authority, of which I was leader until I came into this place, is a five-star authority. It has excellent education and social services, and other council services. It has kept its council tax increases below the rate of inflation for the past 10 years, yet it faced massive cuts in its budget in May. It now faces cuts of up to £12.7 million in 2011-12, and £24 million worth of cuts in 2014-15. That nails the lie that it is only the wasteful councils that are being hit; some of the most efficient and effective are also being hit. My council will experience great difficulty because it is already efficient. Councils that are already efficient are going to have to cut services to the bone. Some of the comments from those on the Government Benches have suggested that their councils could make some savings, and I suspect that that is because they are very inefficient, compared with authorities such as my own.
I want to comment on the fairness of the proposals. I think that the Secretary of State has suggested that my contributions hark back to the 1970s and 1980s. The only good thing about being my age is that I have some experience of the previous Tory Government. I was the leader of the council when it lost £13 million and had to find a way of implementing that cut overnight.
I raised Westminster council with the Minister on last Tuesday’s Adjournment. It has been in contact with and written to me because it is upset about some of the things I said; I will respond in due course. Under the system that was in force under the previous Tory Government, if St Helens had received the same level of grant as Westminster, we would have had no cuts whatever, we would have had to pay no council tax whatever and we would have had enough money left over to send every one of my constituents to Spain for a week. That shows the level of fiddling that went on under the previous Tory Government, so we will take no lectures from this Government about fiddling the system.
The Minister said that we were going to cut the neighbourhood renewal fund—that is not true, and Government Members know it. The only argument they have relates to the three-year review, but all the grant systems were for three years. That did not mean that we were going to do away with the fund; it meant that we would reassess local government spending over the next three years. I am prepared to blame my own party for not introducing the changes as quickly as it should have, which meant that millions of pounds from our authorities went to some of the richest areas, including Westminster and many others. We did not move fast enough—
Gavin Barwell (Croydon Central) (Con)
Before I was elected to this House, I had the privilege to serve as a councillor in Croydon for 12 years, to be a cabinet member responsible for a number of different service areas, to work with senior council officers and to meet council staff who were delivering services on the front line. I completely understand their feeling that it is deeply unfair that some of them are going to be asked to pay the price with their jobs of dealing with the mistakes made in our banking system and the mismanagement of the public finances by the previous Government.
I speak in opposition to the motion not because I think the concerns expressed by Labour Members are misplaced or phoney—Members have spoken with passion about this issue—but because they fail to recognise that the Government’s approach is very similar to the one a Labour Government would have adopted. In opening, the shadow Secretary of State said that the coalition Government were going deeper and faster than a Labour Government would have gone. Let us take each of those assertions in turn.
The suggestion that we are going deeper is palpably untrue. Labour policy was to get rid of the structural deficit over two Parliaments; the coalition’s policy is to get rid of it over one Parliament. There is no difference whatever about the size of the cuts; there can be no argument whatever about that.
As for speed, let us look at the previous Labour Government’s policy, as set out in the pre-Budget report of 2009. According to the Institute for Fiscal Studies, it meant reductions in non-protected Departments—the Labour Government were going to protect health, education and Sure Start—of 25%. If we look at what the coalition Government have delivered, because of the cuts in the welfare budget, some of which Labour Members perfectly reasonably wish to oppose, we see an aggregate 19% reduction in the non-protected departmental spend. In other words, the pace of change for cuts in non-protected Departments in this Parliament is slower under the coalition Government than it would have been under the plans of the previous Government.
The first two lines of the Opposition motion seek to make capital out of the fact that the reductions that local government is being asked to make are larger than those demanded of central Government. It is nonsense for the Opposition to criticise us on that basis because Labour policy was to protect the NHS, the Department for International Development budget, the schools budget and the Sure Start budget. If they are to be protected, it is an obvious consequence that the average reduction across central Government is going to be lower than the reduction in local government, which the Labour Government had not chosen to protect.
I have been a Member for just over six months. During that time, I have had to support a number of measures that, in an ideal world, I would not support. Time and again I hear from Labour Members that they do not agree with our proposals: they do not agree on tuition fees; they do not agree on the mobility component for people in residential care who receive disability living allowance; they do not agree on local government funding; and they do not agree on cutting the teaching grant for universities. It is all very well for Labour Members to tell us all the things with which they do not agree, but that has no credibility unless alternatives are advanced. I have yet to hear from the Opposition one area where they believe that the coalition Government are not cutting enough. They have not told us that instead of reducing local government spending or teaching support for universities, alternative cuts can be made that the Opposition are prepared to announce. Until they come up with an alternative package, their objections have no credibility.
Tom Blenkinsop
One small but significant point relates to fiscal policy and taxation. This Government have made large promises about imposing greater levies on bankers and other such people, but they have quickly run away from them. Labour Members would look to have a far more stringent regime to hold those types of people to account.
Gavin Barwell
I note that the coalition Government introduced a levy on banking, which the previous Government did not. If the Opposition want to propose tax increases additional to those announced by the Chancellor, we should hear what they are and discuss them. That is a perfectly reasonable basis on which to debate.
The second main theme in the motion is fairness, which is a perfectly reasonable test. I would like to raise two issues. First, Labour Members have quoted figures, expressing the concern that the authorities most dependent on Government funding will face the most significant reductions in grant. Conservative Members have been concerned about some of the phraseology used, particularly about the implication that these decisions have all been made. They have not. There is certainly an issue that the Government need to look at, and I believe that the Secretary of State said that he was aware of it. If we just salami-slice the Government grant going to each council, that will have a differential impact on the spending power of local authorities around the country. In the interests of fairness, the Government need to address that problem. Labour Members, however, should not have given the impression that these things are all done and dusted; they are not. We have not yet had the statement, and the Minister is not in a position to give the assurances he has been asked to provide until that statement is made.
I would also like to look at the issue of fairness as it relates to the record of the previous Labour Government. I want to make a non-partisan point. People allege that money was shunted from the south to the north, or that under the Tory Government Westminster and Wandsworth were favoured. The reality is that the system is completely broke. If we look at the figures for unitary councils, the London boroughs and the metropolitan districts under the last five years of the Labour Government, we see that about 30 authorities—my authority was one of them—had a real-terms cut in funding of more than 2%. It is not all outer London boroughs, however; it is a completely random mix of authorities, including places such as Newcastle-upon-Tyne and Liverpool.
At the other end of the scale, we see that Blackpool received an increase of nearly 11%, Telford and the Wrekin 13.3%, Torbay 15.7%, Blackburn 16.7% and Rutland an incredible 25.8%. It is very difficult, I think, to discern a pattern between those authorities. I would like the shadow Minister to explain in her summing-up speech why Croydon gets a 3% real cut, but Rutland gets a 25% increase. [Interruption.] This happened under the Government of the hon. Member for Worsley and Eccles South (Barbara Keeley), so, with respect, the explanation should come from those who were responsible for the changes.
In applying the reductions, it is important that the Government take account of the authorities that have already seen a real-terms reduction in their funding, as opposed to those that saw a period of largesse under the previous Government. I happily acknowledge that local government as a whole did see real-terms growth in funding under the previous Government, but that did not apply to all individual local authorities. It seems wholly unreasonable to impose the same reductions on authorities that have already had to make cuts in comparison with those that have seen significant increases in funding.
I reiterate the point made in the Local Government Association briefing, which many Members will have received. The same point about fees and charges was made by the hon. Member for Bermondsey and Old Southwark (Simon Hughes). For a number of local authority services, the charges that local authorities are allowed to levy by statute do not cover the costs. One way for the Government to help local authorities is by giving them the freedom to increase some of those charges. None of our constituents will welcome paying higher fees, but they might well prefer that option to reductions in the vital public services on which they depend.
Let me pick up another point made by the hon. Member for Bermondsey and Old Southwark. He was very concerned about cuts in non-statutory services such as support for the voluntary sector and youth services. My local authority is having to consider those services. I hope the Minister will tell us that the Government will think again about what is statutory and what is non-statutory. Surely if we all now believe in localism and believe that local authorities are best placed to make choices, we should allow authorities much more flexibility in delivering services locally. If we do not, many of them will not be able to touch a large chunk of their spending because it is statutory, and the reductions will be concentrated in the voluntary sector.
In a report published before the general election, the Institute for Fiscal Studies spoke of measures to reduce the deficit. According to the IFS,
“most likely it will come from a combination of reductions in the quality and/or quantity of public services provided and families being made directly worse off financially through cuts to welfare benefits and increases in tax. Efficiency savings alone will not be enough to fill the deficit.”
Members on both sides of the House must stop pretending that all that can be done easily. Whoever is running the country—whichever party forms the Government—the job of deficit reduction will be painful. We should stop engaging in a feigned debate about whether it is ideologically based, because it would confront whoever was governing the country. We should focus on the changes that Government can make to support those in the front line who are having to make difficult decisions so that they can do the best job in protecting the vital public services on which all our constituents depend.
Alex Cunningham (Stockton North) (Lab)
We have already heard from many of my hon. Friends about the impact of local government cuts on their constituents and local authority workers. Let me begin by paying tribute to those workers, who deliver services not in return for salaries of more than £100,000 or more than £25,000 a year, but in return for salaries of less than £15,000—and, in the case of the many who are women, less than £10,000 a year.
Let us be clear about the fact that, despite what the Government say, these cuts will affect care for the elderly and children. They will affect schools and education, thus ensuring that our children do not have the best start in life. There will be safety reductions as funds for our fire brigades are devastated. There will be reductions in street cleaning, closures of swimming pools, art galleries and leisure centres. There will be cuts in the funds of voluntary organisations that support some of our most vulnerable people, cuts in the funds to support investment—including inward investment—in jobs, and cuts that will cause the gap in life expectancy between our most deprived and our most affluent areas to continue to widen, rather than continuing to close as it did under the Labour Government.
Let me say something about how the cuts will affect people in Teesside, and particularly in the borough of Stockton. Before becoming a Member of Parliament, I served as a councillor on Stockton borough council. I know from direct experience that Stockton has an excellent local authority that provides first-class services for local residents. I have seen the successes that it has achieved. I have seen improvements in education and care for the elderly and the young, improvements in housing, the development of Sure Start Centres supporting not just vulnerable families but working families throughout the borough, and the development of the arts with the international riverside festival and our celebrated ARC arts centre. The council has a “can do, will do” approach, and it is worthy of its “council of the year” title. I am confident that it will work hard to minimise cuts in front-line services and redundancies, but given cuts of this scale, even the best local authorities will struggle.
I am told that 50,000 people working for local authorities throughout the country have already been told that they could lose their jobs. That number will inevitably rise to the half million predicted by the Government, although I know that they are now trying to talk that number down. The Teesside Evening Gazette reports today that no fewer than 900 employees of Redcar and Cleveland borough council—a relatively small authority—have been given notice that their jobs are at risk, just 20 days before Christmas. Of course, the people who rely most on council services tend to be those on lower incomes. Why, then, are councils such as Hartlepool, in Teesside, and South Tyneside facing cuts of between 25% and 29% when South Cambridgeshire and West Oxfordshire councils are receiving increases of up to 37%?
In March this year, the Chancellor told the News of the World that he would not balance the budget on the backs of the poor. Now that his party is in government, he persists with the mantra “We are all in this together”. I do not think that many people, regardless of political persuasion, take that claim seriously.
It is not only the Conservatives who have back-tracked on their promises. The Liberal Democrat Manifesto said:
“Our core aim is to hard-wire fairness back into national life.”
I do not think that anyone working for a local authority who loses a job as a result of these cuts will think that there is anything fair about it, and the same applies to those who lose vital services.
Angie Bray (Ealing Central and Acton) (Con)
Even some of the hon. Gentleman’s colleagues have told us during the debate that they accept the necessity for cuts. We have seen the figures in the Labour party’s “pre-manifesto”, which revealed their own plans for the non-protected Departments: cuts of about 25%. Why does the hon. Gentleman persist in claiming that it is only the Government parties who propose cuts?
Alex Cunningham
We accepted that there would be the cuts outlined by my right hon. Friend the Member for Don Valley (Caroline Flint). However, we believe that cuts must be fair, and that cuts as deep and as fast as those proposed by the Conservatives and Liberal Democrats must be questioned.
I hope to secure a Westminster Hall debate in the new year about the impact of cuts on the voluntary sector, 32% of which relies on local authority funding. I know that many excellent third-sector organisations fear that the cuts will severely limit their work. Stockton is trying hard to protect our third sector, but will face real challenges. I should be interested to know how cutting funds for those organisations will do anything to further the big society programme on which the Prime Minister is so keen. The third sector is the big society in action, and exposing those groups to possible cuts seems incoherent given the emphasis on big society and localism.
Of course, we must not consider local authority cuts in isolation. PricewaterhouseCoopers forecasts that for every job lost in the public sector, another will be lost in the private sector. That means 1 million lost jobs. One industry that we know relies heavily on the public sector is the building industry, which has already lost out in Teesside as a result of the cancellation of the Building Schools for the Future programme, as well as the scrapping of the new hospital to serve the North Tees and Hartlepool area. Spending by local authorities boosts the economy, and there is no doubt that the cuts will indirectly make life difficult for many local businesses.
Alex Cunningham
No, I will not.
Let me finally say something about the Cleveland fire service, which is critical to the safety of people in the area that I represent. I am told by the Fire Brigades Union that 68% of Cleveland’s funding comes from a central Government grant. Given that that grant is set to fall by 25%, the chief fire officer is seriously concerned about the possibility that lives will be put at risk by the cuts. The seriousness of the situation is exacerbated by the fact that our local area has large numbers of high-risk COMAH— control of major accident hazards—sites owing to chemical and other manufacturing in the area. The Minister responsible for the fire service has already refused my request for him to visit Teesside and see the problem for himself. I have written asking him to meet local MPs across the political spectrum, as well as representatives from Cleveland fire authority, to discuss the issue here in Westminster, and I hope that I shall receive a positive response.
These cuts place our communities at real risk, and I hope that the Government will think again.
Brandon Lewis (Great Yarmouth) (Con)
Our residents across this country have been losing interest in local government for years. Turnout in local elections, and particularly local government by-elections, shows that many people are not interested. From speaking to residents, I have learned that the biggest reason for that is that over the past 10 years and more councillors have often, rightly, said that they cannot deal with a given issue because it is under central Government control.
It has already been said in our debate that the previous Government gave money but it always had strings attached. That was the problem. During the 11 years I spent as a councillor and council leader while a Labour Government were in office, my experience was never that we had plenty of money or that we could ever do things without strings attached. Every single time we looked at doing something for our residents, we had to go through some aspect of the tick-box culture. There had to be a consultation on a proposal, for instance, even if that proposal had been in the local election manifesto, or we had to do something differently to make sure that we kept one quango or another or the Audit Commission happy, because officers’ views were often that if we did not do so, we would be punished somewhere else, with a different grant being cut or changed in a different area.
I agree with my hon. Friend the Member for South Derbyshire (Heather Wheeler) that a key problem is the stranglehold that has been put on local government for years. I also agree that the fact that the previous Government held local government to ransom over their finances made it almost impossible for local councils to say that they were able to do very much directly for their local residents, even in areas where they were not struggling. That was because they were having to find money to cover bus passes, swimming pools or licensing. They were also then being handcuffed in respect of planning rules.
It has been a difficult time for local government and I understand why residents have started to switch off and disbelieve what they read in election manifestos. After all, under Government statutory requirements those in local government who were working to an election manifesto would probably still have to consult on any measures afterwards, so what was the point of the manifesto?
I hope that the ending of ring-fencing, the freeing up of local government and the localism Bill when it is introduced will result in councils being able to go back to concentrating on actually delivering for residents, instead of ticking these boxes, which are so often caught up with a financial string. If that happens, elections will actually matter again and people can believe that when they vote for a councillor and a party in a local election, that party can deliver on its manifesto. People will be able to expect to have local manifestos on which they can hold the party and council to account, rather than just always being fobbed off with, “We can’t do that, we are restricted on this, or there’s got to be consultation on that.” That is a huge issue for local government. I sometimes think back to my time as a councillor and the amount of officer time that was spent on ticking these boxes and on putting bids together for money we may or may not get, depending on which box we tick.
Brandon Lewis
I am talking about a whole range of funds across the board. We would have officers spending a huge amount of time on every single matter. That was even the case in respect of initiatives like the comprehensive performance assessment. The sums involved would be up to £250,000 a year. If we added up the amount of officer time spent in that way, we would find that local government could save a huge amount of money. I know that from speaking to my local authority in Great Yarmouth. I am proud to be able to say that, when the announcements were made earlier in the summer, our managing director and councillors said, “We can deal with this.” We were one of the hardest hit local authorities, but they felt they could deal with it. They are now, rightly, looking at how they might share services.
One of the problems we had with the previous Government was their approach. They had to have estimates—even for unitary government. We debated that topic in the Chamber just a couple of weeks ago. The argument was that there could be a couple of million pounds a year in savings from having unitary authorities for Norfolk and Exeter, but one of the problems in respect of Norfolk was that we would still keep the county council and all the councils we had, and just convert one city council to a unitary. I would, therefore, still dispute whether there would have been any saving in officer money and time from moving to unitary status. However, the previous Government wanted to do that in the belief there might be savings down the line, when in fact what we are now seeing in Norfolk is authorities coming together to look at how they can share services, both county with borough and district councils and district councils across each other.
We are considering some of the savings that have to be made and—as other Members have commented—the salaries earned by some people in senior management in local authorities. We should also consider sharing services and focusing on local accountability, with members representing their residents. It should not be based on where a person’s office might be or whether they work in one, two or three authorities. They are there to deliver a service, not tick a box for Government. If we were to do that, we could start seeing huge savings across the board.
The key is getting back to what local authorities are for. I fully support the Government’s position and will be voting against the motion because it harks back to the bad days of the past 10 or 15 years when Government held local government at arm’s length but were then able to blame it for being unable to deliver because, as Labour Members have already mentioned, there were strings attached. Instead, we should set councils free and give them power not to be ring-fenced and to make their own decisions. That will make them more accountable—transparency is a huge part of this. People will then understand that their local authority is the authority responsible for specific areas, that it has the power to deliver and that it is accountable at an election, which is really what democracy is about. That would be a big step forward for local government.
I know that other Members are keen to speak, so I am happy to conclude on that point.
Siobhain McDonagh (Mitcham and Morden) (Lab)
May I say to the hon. Member for Great Yarmouth (Brandon Lewis) that if he thinks that councillors had a bad time under the Labour Government, he really has not seen anything yet? I say that as someone who was a councillor between 1982 and 1998. I spent eight of those years in opposition and eight controlling the council, with only two of those years under a Labour Government. I watched the poll tax come in and I watched what we had to do during those times, so I suggest that he has lived through a pretty easy time in local government. If he thinks that by not having to tick boxes constituents are going to come out to vote in local elections, he underestimates the need for all politicians, national and local, to engage with our electorate. I suggest that engagement with our electorate is the thing that matters.
Brandon Lewis
The point that I was making was that by not being focused on ticking boxes for central Government and quangos, councils can go back to focusing on delivering services for residents, and that is what matters.
Siobhain McDonagh
Perhaps now I should take the opportunity to explain to the House and the hon. Gentleman just why I am not sure that my local residents will feel exactly the same way. Most Members will not have heard of my local council—Merton. It is a quiet, low-profile London borough. It is not the poorest or the most exciting. It generally gets on with it, whether it is Labour or Conservative-run. It is a council that likes to sweep the streets, collect the rubbish and look after people as best it can. Its services are not perfect and could improve, but most of the time it does its best. I suggest that the same applies to most of the councils represented by hon. Members.
Merton council needs time to change and to get about sharing services, but that time does not exist if those spending figures are to be released next week. Next week, we will learn the figures and by 5 March my council has to say what its budget is for next year. If I know anything about local government, it is that huge reforms are not brought about in three months.
Merton council will have to make cuts of £24 million this year—that is for the cuts it anticipates and those it will have to make because of an expanding need for services, such as school places and care for the elderly. That is £24 million out of a budget of £150 million. The people on that council are not people who squeal and they are at a meeting tonight just trying to get on with it, but how will they do this? They have already identified £10 million of cuts this year, which is the largest figure ever at this point in a financial year for the next. They hope to get to a figure of £14 million by January, but the following £10 million will be really hard to find.
Siobhain McDonagh
I cannot give way, because I do not wish to take up too much time—I hope that is okay. The people on the council are finding that task hard, not because they do not want to do it and not because they do not want to bring about shared services, but because they cannot do it in the time available. As they seek to cut that last £10 million, the only opportunities left for them are to go for public services, for the voluntary sector, for the youth service—even though they do not want to do so—for personal care for elderly and disabled people and for the costs of special needs transport. That is because those areas are traditionally where councils have gone when they need to make cuts quickly. Those cuts will be devastating and what we are doing should not be about that.
I hope that the Minister will have taken that on board in any work he has been doing behind the scenes over the past few months with his fellow Ministers and will give councils such as mine time to bring about changes in their services. There is this idea that, somehow, boroughs all over the place will want to work with Merton council. I do not think it is Merton council’s fault, but not too many want to come in for conversations about that. This year, the council will be combining with another council and one big department to save £2.5 million. We want to do more of that, rather than the terrible things that I have just suggested, but we do not have the time and the ability to do so. Councils simply do not have the capacity not only to run services but to do the sort of consultation and detailed legal work that is needed. Their only other recourse is to go out to private consultants and the cost of that is wrong and prohibitive at a time when every pound matters.
This year, Merton will share a head of legal and civic services with Richmond upon Thames council. I hope that that will be the stepping stone to more joint working over the coming years, but in an effort to make the cuts this year all our councillors will do things that we would rather they did not. Our constituents will ask us to defend them at the same time as our Labour groups and our Conservative groups will say to us, “Don’t have a go at us. It’s you lot who decided this.”
We are going through a very difficult time and I plead with the Minister to give councils as much time as possible to reform their services, to consider how they can do things and to consider being ingenious. The idea that many of them have been doing nothing year in, year out and that they have not been making cuts already is completely not the case.
Let us consider adult social care. I do not know how other hon. Members feel, but I rage when I hear about the £2 billion fund because personal care is the biggest budget, outside the schools budget, that local authorities have to cut. That £2 billion is available because councils will be doing some pretty awful things, such as considering older people’s eligibility for domiciliary care or to go into homes. That is what we are facing. If we have the opportunity, we need to stand back and give councils more time to reform and to do things differently. Otherwise, the choices are particularly painful—not for us, but for some of our most vulnerable constituents.
Bob Blackman (Harrow East) (Con)
It is an honour to follow such a thoughtful speech as that made by the hon. Member for Mitcham and Morden (Siobhain McDonagh). Before I came to the House, I spent some 24 years in local government—20 years as leader of my group, 10 years setting budgets and 10 years proposing opposition budgets. Throughout that time, I gained a great insight into how local government finance works and has worked over many years under different Administrations.
We should remember that in that context, local authorities have, over the past three years, faced 3.5% reductions, or efficiency savings, forced on them by the then Labour Government. In London, some 23 of the 32 local authorities have been on the floor of the settlements. For the past three years, therefore, they have always had below-inflation increases. If education is stripped from those budgets, they show a real-terms reduction in funding in London over the past three years. Pretensions that local government saw its halcyon days under the Labour Government are, I am afraid, completely false. We need to put them properly in their place.
We must also consider the proposals made by the Labour Government at the time and what local authorities anticipated if Labour had won the general election. We know that they would have halved capital expenditure, and this Government are preserving capital expenditure and ensuring that there is investment for our future. That is critical for the whole ambit of local authorities and all public sector authorities.
We also must consider what local authorities now have to administer. The budget for which I was responsible in the London borough of Brent was some £1 billion, but we only had discretion over £250,000 of it. The rest was passed from central Government to the local services without any interference or control by the local authority whatsoever. We need to recognise those changes.
Graham Jones
Is that not precisely what is happening when the Government announce that they are ring-fencing education funding? Is that not just a repeat of what the hon. Gentleman has just described?
Bob Blackman
Clearly, the Government are removing artificial ring-fencing from local government expenditures. Local authorities up and down the country rightly complain about having been given money in very tightly constricted salvos that could be spent only on particular services in particular ways. Often, they could not spend it within the given time frame and so would lose it. That is ridiculous.
We need to look at how money can be saved. There is multiple handling of cases in local authorities. I know of social services cases in which the application for disabled facilities grants has gone through 17 pairs of hands before being approved. What nonsense. We have to streamline systems to ensure that, at most, one person reviews a case and another checks that it is correct. Applications should not go through 17 people.
We should have computer systems that capture data once. People who apply to a local authority for particular services frequently have to fill out a multitude of forms and the relevant information then has to be entered many times by various people in different areas.
Bob Blackman
No I am not. I am saying that when the weakest and most vulnerable people in society are asked to give information to local or national authorities, we can enter the data once, administer the benefits they are entitled to and make sure they get the proper benefits, rather than having the multiplicity of systems that grew up under the Labour Government.
We spend more than £1 billion on administering housing benefit, but why does every authority need a separate back-office organisation for that? Those contracts are administered by a small number of suppliers, so why not combine them, strip out some of the administrative overheads and remove duplication?
Heather Wheeler
We have done exactly that in South Derbyshire. We have got into a grouping with Northgate and we will be the east midlands hub, so if hon. Members want to save money and pay us to do their housing benefit, we will do it for them.
Bob Blackman
I thank my hon. Friend for taking this opportunity to advertise the hub that she is involved in.
Clearly, we need smarter procurement in local government. It almost makes me spit when tenders for local government services come back with visibly inflated prices because they are for public, rather than private, services. Many of the tenders for public services that come back would not be accepted by any private service. We need to examine that carefully.
We also need to create an environment in which there is greater opportunity for mutualisation. One thing I did in local government was to create a local authority mutual insurance operation for London. It would have saved my authority and every authority that joined it £1 million a year, but it was deemed to be illegal so we could not operate it. I ask Government Front Benchers to change the position so that local authorities can come together to save money for local residents and also provide much better services.
We should consider what unused assets local authorities have. An awful lot of land could be sold in appropriate ways and the money could be used for appropriate reinvestment in the local area. We also need to consider local authority balances. Some authorities have sums of money sitting totally unused instead of benefiting the public, whereas other authorities have very small balances and will find the reductions much more painful. Many authorities need to examine their conscience and use those resources to benefit local people.
Everyone knew that the cuts were coming. Everyone knew that there needed to be a plan. In the authority on which I served before I came to the House, we had a plan to reduce our expenditure by £100 million over four years—that is, £25 million or 10% a year. If we could do it without a huge impact on public services, I do not believe there is any authority in the country that could not do it.
Bob Blackman
No, I shall not give way as I do not have much time. [Interruption.] No. I have been given the extra time already.
The borough that I have the privilege of representing now also has a plan to save some 10% of its expenditure per year, and the plan is ready to go, depending on the settlement. Clearly, as my hon. Friend the Member for Croydon Central (Gavin Barwell) mentioned, there are wide disparities in the formula grant that authorities are given. That is the key issue that the Government must address to make the system fairer, more transparent and more open, so that we can all examine it and make sure that the right resources are going to the right authorities.
Heidi Alexander (Lewisham East) (Lab)
This time last week, my constituency was the scene of violent protests about local government cuts. Town hall windows were smashed, four individuals were arrested and 15 police officers were injured as Lewisham council met to consider budget cuts of £16 million. Although the violence was due to a small minority intent on making trouble, there is no doubt that my constituents are angry, and they are right to be.
Lewisham bore the brunt of public outrage about local government cuts last week. Sadly, the £16 million worth of savings agreed by the council is probably just the tip of the iceberg. In the next four years Lewisham expects to have to save somewhere in the region of £77 million, just under a third of its total revenue budget.
Joan Ruddock
Did my hon. Friend hear the Secretary of State suggest that Lewisham council should look to its £60 million worth of reserves to deal with the issue? She knows, as I do and as he does, that of those reserves, the majority is for capital spending. The general fund is simply 2.5% of total budget. Does she agree that it would be utterly irresponsible to spend emergency reserves and do nothing to deal with cuts of up to £70 million?
Heidi Alexander
Indeed. My experience on Lewisham council was that the only occasion on which reserves would be considered for use was when that would be a fiscally responsible thing to do.
Heidi Alexander
I should like to make progress as I am conscious of the time.
The demonstrations at Lewisham council last week did not take place because that is a Labour council intent upon slashing services or haemorrhaging staff. The demonstrations at Lewisham last week were a direct result of a Tory-Liberal Government determined to cripple councils the length and breadth of the country. I first learned about the riots last Monday when I was on my way home from Westminster. As I sat on the train, I could not help but reflect upon how unfair it was that former colleagues of mine were being blamed for the Government’s decision to inflict cuts that go well beyond anything that is sensible or necessary, and well beyond anything that my party would have done, had we been in power.
As I sat on the train, I also realised that at the exact time that council employees in Lewisham were trying to hold back an angry mob, hon. Members in this Chamber were debating reform of the banking system. For me, the two are not separate issues. Local democracy is rightly accountable for the decisions that it takes, but surely we have to ask: where are the protests outside the plush offices of the bankers whose excessive risk taking plunged us all into this crisis in the first place? For that matter, where are the protests outside the office of the Secretary of State, whose failure to stand up for his Department has forced Lewisham council into its present position?
I am not for one minute suggesting that the violent protests in Lewisham should be replicated anywhere, but surely those responsible for the current financial state of local government should be made aware of the effects that their actions are having on communities throughout the country.
There’s the rub: for me, the Government do not get it. They do not seem to get the fact that by heaping cuts on local authorities, they run the risk of putting thousands upon thousands of people out of work. Ministers do not seem to understand that draconian cuts to local government will simply take work away from private firms—the very firms that they are desperately trying to grow. Nor do Ministers seem to understand that the scale of the cuts could decimate voluntary and community organisations at the precise moment when they want them to do more. Most worryingly for me, there seems to be no acknowledgement that the size and speed of the cuts could force councils to dismantle the services on which the most vulnerable members of our society depend.
Heidi Alexander
I would very much like to make some progress, and I am conscious that there is a time limit.
My hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) spoke earlier about elderly care, on which I, too, would like to focus for a few minutes. I have been reprimanded by the Secretary of State in this Chamber before for daring to suggest that the supposedly extra money for adult social care announced in the comprehensive spending review would be wiped out by the cuts to local government. Well, let me tell the Minister today that there are many authorities that share my concern. In fact, a recent report by London Councils estimates that even with the “extra” £2 billion announced in the CSR, funding for adult social care will fall by £1.8 billion over the next four years. During my time as a councillor, the worst meetings that I had to attend were those at which we considered changing the eligibility criteria for care packages—the threshold of need that the elderly and those living with disabilities have to meet to get support. In the end, we did not raise the threshold in Lewisham, and I am pleased that we did not do so. It came down to a question of human dignity, and I was proud to be part of a Labour council that recognised that.
However, with the current scale of cuts facing local government and the demand for care increasing by the day, I cannot see how much longer councils will be able to maintain the level of support that they currently provide. If they do maintain current levels of care, other council services will have to take a big hit. They include libraries, leisure centres, recycling facilities and street sweeping—many of the things that people take for granted. Does the Minister realise that those are the sorts of impossible decisions that he is asking council leaders to take?
I accept that in many areas there may be ways of doing things differently—doing things more cheaply and doing them better—and that is precisely what good, forward-thinking councils have been doing over the past few years. My concern about the Government’s approach to local government is that it seems to be based on a mistaken belief that councils are characterised by rampant profligacy, sky-high salaries, and hundreds and hundreds of non-jobs. Nothing could be further from the truth. My experience tells me that, year after year, many councils have been working hard to make themselves more efficient, the result being that there is now simply not much fat left to trim. The way in which cuts are being disproportionately squeezed into next year—although we hope we might get some good news on that—will also make it harder for councils to take the sensible, long-term strategic decisions that are needed.
My concern about the scale of the cuts to local government is that it will limit the ability of councils to address some of the big issues of our time, and restrict the innovative work that some modern, progressive councils are already undertaking. Let us take climate change. Although new forms of electricity generation and more energy-efficient homes may help to reduce our carbon emissions, some of the really big differences will come about only by people changing their behaviour. That does not happen by magic, and although Ministers might be concerned that this smacks of the nanny state, I cannot help but think that it is local government that is best placed to assist communities in reducing their carbon footprints. However, that type of work is resource-intensive, and with resources so much scarcer, councils will have to stop doing other things if they want to continue such work.
In conclusion, I believe that the scale and speed of cuts to local government is part of a deliberate strategy by Ministers to shift the really difficult decisions on to someone else. It is an attempt to deflect attention away from themselves and on to council leaders up and down the country. To give Ministers their due, as a political strategy you cannot knock it, Mr Deputy Speaker, but as a strategy to reduce the country’s deficit fairly and sensibly, it is nothing short of a disgrace.
Mr Deputy Speaker (Mr Nigel Evans)
Order. As we can see, six Members are still trying to catch my eye and there are 40 minutes left of this debate, so I am sure that hon. Members can do the mathematics. Perhaps they will want to be generous in order to ensure that everybody gets in, because the numbers are equal on both sides of the House.
Mr David Ward (Bradford East) (LD)
I welcome in particular the speech by the hon. Member for Mitcham and Morden (Siobhain McDonagh), one of the few people who seems to have read the motion. Many hon. Members have tried to support or, indeed, argue against the scale of the cuts, but the guts of the motion are really about front loading and authorities’ ability or inability to deal with that in the short term.
Scaremongering has been mentioned, but back in Bradford the council has been working on the figures, and the numbers on front loading are scary. Those are the figures we have been given, so it is a question not of scaremongering but of what we have been given to work on and are working to.
Members have traded stories and histories of their time on local councils. I had 26 years on my local council, 13 under the Tories and 13 under Labour, and with all due respect to my coalition partners, I can tell hon. Members which were the worst by a long way. I remember, back in the ’80s, we had to raise £2.40 to spend £1 in Bradford and send £1.40 back to the Treasury, and it did not get much worse than that, so I am not worried about the Liberal Democrats having only 57—or, soon, 58—Members, because two of us Liberals managed to stop Councillor Pickles slashing the education budget in the ’80s, although unfortunately a by-election and the lord mayor’s casting vote enabled him to do so the following year.
During the 13 years under Labour, additional funding went to the local authority and it was very welcome. Unfortunately, it was accompanied by obsessive control, bureaucracy, targets and the ring-fencing of funds, which would enable Ministers to issue press releases telling us how good they were and what they were doing for the people of Bradford. Building Schools for the Future was a colossal waste of public funds, and if we had been given only half that money to spend in our area on our priorities for schools, it would have been much better.
The cynical use of local services to win Government popularity reached shameful proportions with the free school meals handout and free swimming. It would have cost us 8 million quid to keep free school meals going the year after, and, although the shadow Secretary of State says that we did not turn that money down, how could we? That is how much it would have cost us to keep the service going, and it was pure political cynicism to make that offer leading up to a local election.
Similarly, the area-based grant and the working neighbourhoods fund were time- limited, and, although we got as much as we possibly could because we had things to do with the money, local education authorities invariably required that that short-term funding be added to the base. The position we were in meant we could stop the funding or add it to the base, but if we did not continue with it we would have been the villains of the piece, so invariably we did.
Year by year, the base grew and grew, and all the time we faced the relentless pressures of an ageing population, and all that that meant for increased social care, and the fastest growing school population in the country. In turn, there was budget creep: unsustainable budgets that got bigger and bigger. Between 2000 and 2008, private sector jobs declined by 7.5% and public sector jobs went up by 14%, and that could not be sustained.
Despite all that, over those 26 years the local authority survived. It got through, and it will get through this recession, too. The Secretary of State was absolutely right: we cannot rely on a salami approach any more. The truth is this—it is a secret, so please do not tell anybody else—of the £1.3 billion gross budget that we were spending, we had a furious argument every single year at budget time about a couple of million quid. That was what was really going on, rather than dealing with the structural changes that were required in the authority.
As someone said earlier, necessity is the mother of invention. We are responding positively in Bradford, including the leader of the Labour group who, after six years of self-imposed exile, is actively working as the leader of the council with all the other groups because he understands the severity of the problems that we face. I give him great credit for that. But—and this is the big “but”—we cannot turn the tanker around in a short time. When we are faced with reducing £60 million on a net budget of £450 million, it is not about a planned, structural, cultural local authority change contributing to the deficit reduction programme; it is simply reckless, economic vandalism. That is what we face.
I do not know about other hon. Members, but I have detected a shift tonight on the subject of the front loading. I get a feeling that something has been said and there is something in the air. People might ask, “So why on earth are you making all these comments and raising these concerns?” I would say to them that that is what we have been given to work on and what the directors of finance across the country have been told, and they are acting on it. That is the point I am trying to make. We knew this was coming and we have been told how severe it will be, so we are now making decisions and cutting our budgets. The decisions we are making are not long-term, rational, objective assessments; it is simply panic. We are saving £1 million a month on the vacancy freeze. That is very welcome in terms of helping us with the budget, but it is arbitrary and has not been planned. Such an approach is salami slicing of the worst possible kind and it cannot go on because people will be affected by it.
We need to give local authorities time. They are rising to the challenge, but they need time to achieve what we are asking them to achieve, and we need to work with them. Despite what will happen later, if there were a free vote in the Chamber tonight, I think that the majority of hon. Members would support the motion. What has emerged from the various speeches is a recognition that local authorities need time. I hope that in the winding-up speeches tonight from the coalition side, we are given a very strong positive indication about all the concerns raised on front loading and that we are told it will be abandoned.
Nic Dakin (Scunthorpe) (Lab)
I draw attention to my entry in the Register of Members’ Financial Interests. It is a pleasure to follow the hon. Member for Bradford East (Mr Ward) who praised my great friend Councillor Ian Greenwood, the leader of Bradford city council, for rolling up his sleeves to get on with the job. I recognise the great honesty of the contribution he has made tonight. In recognising that, the figures look—in his own words—a bit scary.
The cuts in local government spending announced by this Conservative-led Government are of unprecedented severity—27% in four years is a massive amount. As leader of North Lincolnshire council for six years, I inherited a council with the fourth highest council tax in the country. Through systematic and planned savings, the council’s budget had been cut by many millions by the end of my term of office. Council tax at band D was the average for England, and the Audit Commission identified North Lincolnshire as a beacon council, so I know it is possible to reduce spending while developing services.
Like my hon. Friend the Member for North Tyneside (Mrs Glindon), I recognise that innovation has been around for some time in local government. However, to do that creatively and effectively, budget reductions have to be systematic and planned. To cut budgets in a crisis is exactly the wrong thing to do. It leads to the wrong cuts, a lack of service continuity, and disastrous consequences for the organisation’s finances and for the services it delivers. We need look no further than across the Irish sea to see how true that is.
The Education Committee recently interviewed two heads of children’s services to see how it feels at the sharp end. In his opening question, the Chair asked whether the funding reductions made sense. Matt Dunkley of East Sussex county council, the vice-president of the Association of Directors of Children’s Services, answered thus:
“I think we all understand the imperative of the deficit reduction. I think our fears are, managerially, how it is being handled by the Department and how the settlement is being broken down, in terms of the different funding streams that affect us. We are fearful that a combination of front-loading of the reductions into year 1, and the way in which the different funding streams on which we are reliant are being cut at different rates over the four years…could lead to some local authorities having to make very large reductions in the first year of the four years of the settlement. That could have a knock-on effect in terms of the amount of redundancies they’d have to fund, which might produce some unintended consequences”.
Debbie Jones, director of children’s services for Lambeth, added:
“What I want to emphasise…is the front-loading issue. I think all of us have recognised the need to make significant reductions, but the important thing is that we essentially transform the way in which services are commissioned and delivered so you have a reasonable lead-in time. The impact of the front-loading, not just on our overall settlement but also on the grants that we have yet to know the detail of, means that we will have a very short time in which to make major decisions. That of immediate knee-jerk—obviously we’ll do our best to avoid it—could result in those unintended consequences, which could undermine the work that we’re doing in the future.”
That is what the professional leaders on the front line are saying about how this Government are going about their business. They are not whingeing and whining—they are professionals. To use the words of my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh), they are getting on with the job. That is what professionals will always do, in my experience, when faced with some of the nonsense that we, the politicians, serve up from time to time. They will somehow make sense of the nonsense, and they will make it work, after a fashion. However, what they warn of we have a duty to listen to. They warn that these reckless cuts will lead to unintended consequences, which will impact on the lives and livelihoods of the most vulnerable. These reckless cuts will deliver the Prime Minister’s broken society, not his big society.
As the Tory peer and LGA chair, Baroness Eaton, said:
“the unexpected severity of the cuts that will have to be made next year will put many councils in an unprecedented and difficult position.”
We have heard how Conservative leaders and mayors in the north of England have echoed this in a chorus of concern. The chief executive of North Lincolnshire council agrees. Never before has the council in my area had to take an in-year cut in Government funding after it set its budget, as it had to do this year. The front loading of future cuts means a 10.4% reduction next year. Additional cuts to specific grants will exacerbate this further. It is small wonder that the council concludes thus:
“Revenue spending cuts in excess of £20 million over 4 years are on an unprecedented scale. There will be implications for all areas of council activity. While the council will try to manage as much of this as possible through efficiency measures, reductions in services and staffing levels are inevitable.”
For all the Tory talk of localism and devolving power to local authorities, the Tories are cutting local budgets harder than national budgets. Town hall spending will be cut almost three times more than that of Whitehall Departments—so much for localism. The cuts are front loaded so that the heaviest cuts fall in the first year, giving local councils almost no chance to plan where savings can be made. The cuts are too deep and too quick, putting front-line local services at risk. Many small businesses rely on contracts for local authorities. As my hon. Friend the Member for Lewisham East (Heidi Alexander) pointed out, cuts in local government funding will result in fewer contracts for the private sector, meaning loss of jobs and a knock-on effect for the wider local economy. It is little wonder that PricewaterhouseCoopers forecasts that for every job lost in the public sector, another will be lost in the private sector.
This timely motion gives all Members of the House the opportunity to listen to the people, to pause and to do the right thing. By voting for the motion, we are voting for localism, for small business and for local people. I commend the motion to the House.
Angie Bray (Ealing Central and Acton) (Con)
Hon. Members will be pleased to know that I will keep my remarks short.
Given where the country finds itself financially, it would have been strange if local government had been immune to the tough choices that the coalition Government have been forced to take to cut the deficit and to get the country back on track. Decisions on local government spending are indeed tough, with a 7.5% cut in spending each year between now and 2014. However, as many colleagues have said, the cut may well be lower due to other revenue streams.
Although the impact is painful, the coalition has taken decisions to make it as fair as possible. Councils up and down the land will be supported in freezing council tax in 2011-12 through additional funding equivalent to the revenue from a 2.5% rise in council tax. That honours a coalition agreement promise to freeze council tax, even in the face of the worst debt crisis since the second world war. It is also an essential ingredient of the coalition’s policy on fairness, because it helps the lower-paid and pensioners in particular, who have seen their council tax double since 1997. The average band D council tax bill is now nearly £1,500, which frankly beggars belief.
As with so many issues, we still do not have a clue how the Labour party would approach this difficult funding issue. It has to get over its denial about the financial problems that face this country. It continues simply to complain and scaremonger, yet it never tells us how it would deal with the problem, except to imply that somehow it would be able to do so without having to take any difficult decisions. More likely, it is not coming clean with us about the plans that we know it had, because it does not want to talk about them any longer. We are where we are because of years of overspending without a care in the world by the Labour party. Now the pain starts as we rebuild our finances. At least Government Members know what we have to do.
The most important reform that the coalition is introducing in local government is more localism. One way in which the Government are trying to alleviate the difficult measures is to free funding from being overly ring-fenced. That will allow local councils to use their revenue with much more flexibility, so that they can meet local needs in the way that they know best.
Neil Carmichael (Stroud) (Con)
The debate has focused on two issues. Obviously, the cuts are the primary issue, but there is a secondary one. Does my hon. Friend agree that the opportunities that the coalition Government are giving local authorities to be imaginative and even radical in reforming their services and their approach to local government will pave the way for exciting, diversified and genuinely local authorities?
Angie Bray
I thank my hon. Friend for that contribution. Of course, I agree that it is a great thing to get local authorities back to doing what they do best, which is to work closely with their local residents to ensure that they give them what they need.
As hon. Members have said, many local authorities across the country are considering how they can take out costs in their back rooms by working together to run services. My hon. Friend the Member for Halesowen and Rowley Regis (James Morris) mentioned Kensington and Chelsea borough council getting together with Westminster city council and Hammersmith and Fulham council to do just that. Those boroughs happen to make up my previous London assembly seat and they are all, I should add, Conservative-run. They are doing what local councils should be doing—making efficiency savings in bureaucracy where possible, rather than hitting front-line services.
My local, Labour-led council, Ealing, has been quick to announce plans for a range of cuts, including cutting day care centres, a child protection officer and more than 50% of park rangers. Enviro-crime officers are also to be cut, from 23 to 12, yet it is happy to find £3 million for new computers at the town hall and, quite disgracefully, it is to continue funding full-time trade union officials to the tune of £250,000 a year.
Tom Blenkinsop
Regarding non-statutory duties and youth services, about which we have heard from the hon. Members for Bermondsey and Old Southwark (Simon Hughes) and for Croydon Central (Gavin Barwell), would the hon. Lady like to condemn the Prime Minister, who is funding pilot schemes for big society youth projects in the summer with people who are not qualified in youth training?
Angie Bray
I am happy to take that point on board, but I am going to make progress.
The spending decisions that I mentioned are clearly not the priorities in which the people of Ealing are interested, and they really ought to be reconsidered. Unfortunately, I suspect that politics has played a large part in them. They were entirely avoidable, but the council hoped to make the coalition Government take the blame. I expect the public to be a little cleverer than that. They know, as we all do, that we are in a black financial hole because of the previous Labour Government, and my constituents will not be impressed by poor spending decisions that allow day care centres to be closed or park rangers to lose their jobs while full-time trade union officials are kept in cushy jobs in which they do nothing to support the local community. I will oppose the motion.
Karl Turner (Kingston upon Hull East) (Lab)
I am very grateful for the opportunity to speak in this debate, which is important because the subject affects my constituents particularly badly. I have enjoyed contributions from both sides of the House, and I particularly welcomed that of the hon. Member for Bradford East (Mr Ward). It reminded me of something that he said at the very beginning of the Parliament in a media interview: “It’s not about who you do the deal with, but about the deal you do”. I suspect that he is rather wondering what sort of a deal has been done now.
I also welcomed the contribution of the hon. Member for Brigg and Goole (Andrew Percy) about waste in local government, particularly when he referred to bureaucracy and the rule book on appropriate language to be used by councillors to council officers. He failed to mention that the other half of the Tory group on his council was accused recently of referring to a council officer as a “wonk” and a “foreigner”. Perhaps it would have been useful for him to have read that very rule book.
Andrew Percy
As my friend, colleague and near neighbour knows full well, the guide I referred to was for councillors in their dealings with the public. The corporate governance inspection recorded that it was Labour councillors who were bullying members of staff back in 2000.
Karl Turner
Of course, I disagree entirely. It was very recently that the leader of the Tory group was accused of the serious things I mentioned, and it would have been better had he read the rulebook.
As axes have fallen, local government has emerged as the indisputable loser from the Government’s austerity measures. Town halls across the country will feel the squeeze tighter than Whitehall Departments as the Government cynically try to devolve responsibility for the choices they have made and the mess they are creating. On average, local authorities will experience a loss of funding to the tune of 27% over four years, compared with 11% for Whitehall Departments.
Before I move on to specific objections, I should first like to discredit the myth that that situation was inevitable. It was not. There was an alternative, which, coincidentally, was the opinion of the junior partner in the coalition Government. It had the support of numerous Liberal Democrats who are now members of the Cabinet, and the Deputy Prime Minister deemed it simple enough for his 8-year-old child to understand. Slower deficit reductions—half the level over four years—as supported by the Labour party, would have mitigated the effect of local government cuts and protected the most vulnerable in our constituencies.
Cuts this size and this fast cannot be absorbed through recruitment freezes, removing natural wastage or service-sharing. Make no mistake: these cuts will impact on services and jobs. Across the country, local councils have already begun shedding staff and pulling vital front-line services. Council leaders, whatever their political persuasions, are trying to mitigate their political misfortunes, explaining that services will be hit and jobs lost, and even the Secretary of State admitted that, by itself, sharing services will not balance the books. Money allotted for highway improvement is being hit in Somerset, north Yorkshire and London, and support for battered women has been slashed in Buckinghamshire. Eligibility for social care is being tightened, £311 million of grants from the Department for Education have gone, and youth services are being put at severe risk.
In my constituency, residents have been hit particularly hard by cuts to the housing market renewal programme, affecting Hull’s gateway housing regeneration scheme. The speed at which Government funding has been withdrawn has left many living in derelict houses, experiencing damp, flooding and an increase in theft. I have written to the Secretary of State to invite him to see the result of his policies, but not surprisingly he has yet to reply. It is perhaps no wonder that he has not afforded me the courtesy of replying to my invite. My constituents are left in real desperation. Cuts to these areas do not just end with a fall in service provision. They begin a vicious cycle of their own: as jobs are lost and unemployment increases, dole queues get longer and longer. The Local Government Association has already revised up its estimates of job losses to 140,000 this year and predicts costs associated with these redundancies could be as much as £2 billion. However, money provided by central Government to help with the cost of job cutting amounts to only £200 million.
I come to the crux of the motion. It is not just the depth of the cuts that is damaging, but the speed. The Government’s desire to rush local authorities into making cuts now to make sure the damage is done well before the next election is a worrying and short-term decision based entirely on political objectives. The Secretary of State can scream from the rafters that the accusation of front-loading is fiction, but the evidence is firmly against him. The Local Government Association has estimated that the cuts will fall heaviest in the first year, with an 11% loss in 2011-12.
The Government may talk a good game, but they certainly do not play one. Let us consider, for example, the Secretary of State’s vision for local authorities. He claimed that they should use cuts as an
“opportunity to completely rethink everything they are doing, creating a modern, flexible and innovative council.”
That is certainly a laudable sentiment, but in practice he is forcing local government to make cuts almost immediately, allowing no time for planning or strategy. The opportunity that he speaks of will last for the blink of an eye.
As well as going too far, too fast, the cuts are unfair. Despite claims from Government Members that they would aim for fairness and that we are all in this together, the effect of these cuts is highly disproportionate, hitting the worse-off hardest. Even the Minister admitted:
“Those in greatest need ultimately bear the burden of paying off the debt”.—[Official Report, 10 June 2010; Vol. 511, c. 450.]
Unfortunately, figures from the Department for Communities and Local Government bear that out. The councils worst hit over the four-year settlement, including my constituency, are among the 10% most deprived areas in the country.
This Government say one thing and do another. Measures involving jobs, services, front-loading and unfairness are all being undertaken using the language of localism. The Government are front-loading cuts in local services to ensure that, come the general election, the massacre will be over. They are making councils take responsibility for the cuts locally so that they do not have to account for their irresponsibility nationally. They are feathering their own nests while pillaging constituencies such as my own. This Government claim that we are “all in this together”, so I ask the Secretary of State if he will please visit my constituency, along with housing Ministers, to see the carnage for themselves.
Andrew Bingham (High Peak) (Con)
I will be brief as I believe that one more Member wishes to speak in the next 10 minutes. I have had the privilege of being a High Peak borough councillor for 11 years, and I remember the first four years, when the council was under Labour control. Labour Members tend to wax lyrical about the past, but during those four years, when we were led to believe that money was plentiful, the Labour-controlled council managed to put the council tax up by 19% in a single year. The increase averaged more than 9% a year over four years.
In 2003, we had a strangely prescient situation in which a Conservative-Liberal Democrat coalition ran High Peak borough council, but even then we were squeezed by the Labour Government, with small settlements and extra duties. We were told to take on licensing, for example, but given no money to do it. We had to find that money ourselves. The hon. Member for Lewisham East (Heidi Alexander), who is no longer in the Chamber, made an accusation about us shifting the blame for taxation on to local authorities. All I will say to that is: they should know, shouldn’t they?
The council was then faced with comprehensive performance assessments, and I remember officers focusing on that week after week, month after month, and carrying out mock CPAs to get the necessary excellent rating in order to free us a little more from Government interference. That took their minds off delivering the services that we were there to deliver. It was ridiculous, and we need less of that. We still managed to set a low council tax, however, and in 2007 the Conservatives took control of the council.
Members who have been in the Chamber for most of the debate will have heard me describe our strategic alliance with Staffordshire Moorlands. We have achieved more than £2 million of savings, which can go to our residents, although many of those measures were opposed by the Labour group. The two councils now share environmental health, ground maintenance, property management, communications, human resources and finance—the list goes on. We have all heard of other councils sharing in this way, but we were one of the first to do it. I urge Members to come to High Peak borough council and learn from us how it was done. We might make a small charge, but they would be very welcome if they would like their councillors to learn about this.
In future, we need less Government control. We have seen the regional spatial strategies going, although there are some difficulties involving legal challenges and we need to move that along faster. We have heard the Opposition say that they did not know what cuts were coming, despite their having announced them in their own pre-Budget report. Last year, however, the opposition councillors in High Peak questioned our medium-term financial strategy because we were not budgeting for deep enough cuts. So, on the one hand, the Opposition say that they do not know about the cuts but, on the other hand, they behave in completely the opposite manner.
The money that we are giving to local authorities now will be a lot freer, because there will be less ring-fencing, and freer money goes further. Ring-fenced money is harder to use, and it is not put into the right areas. Labour Members are in denial; they have been since May. Perhaps it was the sun that got to them, I do not know, but they would have been forced to make cuts and savings, had they won the election. Thankfully, they did not win it, and they have now resorted to nothing more than scaremongering.
Graham Jones (Hyndburn) (Lab)
Given the short amount of time left, I shall raise just a few brief points. I want to mention the new homes bonus, a suggestion that could save money, the big society, and residualisation in east Lancashire, which is an important issue in my constituency. I also want briefly to touch on police community support officers.
My constituency is suffering some of the biggest cuts. We are facing 27% cuts across the board, but we are waiting for the actual figures. I am surprised that the Minister will not confirm those figures today. My hon. Friend the Member for St Helens North (Mr Watts), who is no longer in his place, mentioned a report produced by the all-party parliamentary group on the special interest group of municipal authorities—SIGOMA. It stated that Hyndburn was ranked as the 40th most seriously hit area, facing between 30% and 38% cuts. These can have a cumulative effect, and similar examples have been raised by other Members today.
The new homes bonus is frequently used by Ministers as a method by which councils can run for financial sanctuary, but it will have no impact on constituencies such as mine, where there are some 2,500 empty properties. Netting off demolitions will hit hard any areas where there is an over-supply of housing. This policy is a bit like throwing a drowning man a medicine ball.
Let me make some suggestions. Conservative Members say that we have no suggestions, but my right hon. Friend the Member for Salford and Eccles (Hazel Blears), who is not in her place, suggested more flexible use of the business rates, which the Secretary of State touched on earlier. Let me give him another suggestion. If he stopped scratching his head and listened to me, he might learn a thing or two. Hyndburn council calculated that removing the 50% council tax discount on empty properties will raise £660,000—an enormous sum for a district authority. At the moment, this money is clawed back through the revenue support grant deduction. It needs to be looked at. It is interesting to note that The Independent on Sunday reported that the Liberal Democrats were looking at similar initiatives—discounts and removal—for second homes.
Turning to the big society, it concerns me that the Government believe that we are moving towards such a society. I cannot see it. Let me provide an example. My local authority provides £57,000 for citizens advice bureaux. If we face cuts of between 30% and 38%, I cannot see how that is likely to continue, yet this is a time when citizens advice bureaux will see an increase in the number of people coming to see them. This will mean an increase in the work load at a time when Citizens Advice will be laying off staff. It is also affected by many other streams of direct Government funding, which are also being cut. It is obvious that there are going to be real problems. I do not think that the Conservative council of Hyndburn and Rossendale has an appetite for maintaining such funding. It is going to set a 0% council tax—a big issue, as that is going to hit the big society even harder. Many voluntary groups rely on this funding, and I cannot see how they are going to survive. Thanks to the cuts, we have already lost one dial-a-ride minibus, and I imagine that the disabled service will be removed altogether unless we see some sort of public support.
These huge cuts have a cumulative impact, so there is a growing concern in Pennine Lancashire about what I would describe as the residualisation of poorer communities. Ministers need to be aware of that. Indeed, evidence is now emerging that while populations in these areas remain relatively stable, the number of those in higher-income brackets is declining, along with those who have better education and better employment prospects. This is countered by a growth in the number of poorer, lower-income households and those with lower levels of educational achievement. These populations are, by their nature, often more dependent on public services. We therefore see self-reinforcing patterns starting to build up as a result of these cuts.
This is a crucial issue. The latest rankings for the index of multiple deprivation show that right across Pennine Lancashire, with the exception of Ribble Valley—I notice our Deputy Speaker has left—there has been a marked fall as the effects of residualisation take hold. There are real fears that the outcome will be a “ghettoisation” of parts of east Lancashire and other parts of Britain, thanks to a Government focusing solely on areas that can prosper economically rather than getting to grips with the needs of all communities.
Finally, let me touch on policing. On top of all the other cuts I have mentioned, policing is going to be cut. Police officers in my area believe that, without the extra staff, crime will rise. The police cuts are ill considered. Police community support officers are part-funded by local authorities; they tackle in partnership a wide range of social problems. No assessment seems to have been made of the wider impact of cutting PCSOs in areas where local authorities work in partnerships. I will stop there and allow the Front-Bench teams to conclude the debate.
Joan Ruddock
On a point of order, Mr Speaker. I think you will know that I have been in the House long enough to take the rough and tumble of parliamentary debates, but earlier today, in response to my intervention, the Secretary of State made a remark about an hon. Lady’s “champagne lifestyle”, which appeared to be directed at me. I found that really offensive and rude. Will you advise me, Mr Speaker, on whether I could expect that remark to be withdrawn?
Mr Speaker
Let me say three things to the right hon. Lady. First, good temper and moderation in the use of parliamentary language are always to be encouraged. That principle is set out clearly and explicitly in “Erskine May”, which is our guide. Secondly, I had the privilege of serving on the International Development Committee with the right hon. Lady and travelled to a number of places around the world with her and other colleagues, and I cannot recall her consuming champagne at any stage. Thirdly, let me simply say that my distinct recollection is that the right hon. Lady is a modest person, with very little to be modest about. I hope that that is helpful to her and to the House.
Barbara Keeley (Worsley and Eccles South) (Lab)
I hope that the words that you have just uttered, Mr Speaker, will have an impact on Government Members, because there has been quite a lot of rowdiness today. I also think it worth saying that some of the ways in which Members are addressing female Members does them no credit at all.
We have had a good debate, featuring 25 Back-Bench speakers. It was polarised—as well as being, as I have said, a little rumbustious at times—but then the Government’s cuts are polarised in terms of their impact on different parts of the country.
The Secretary of State talked earlier of “Life on Mars”, and of returning to the 1980s. That is not the best theme when we are discussing cuts that will restrict and reduce services, damage communities, and put more than 100,000 local government staff out of work. The Secretary of State missed the contribution of the hon. Member for Bradford East (Mr Ward), who did not seem to feel that the 1980s were a great period. As for Government Members who thought that those were halcyon days in some respects, let me remind them of what was said by my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh): they ain’t seen nothing yet. That was the most difficult and damaging decade for communities. I became involved in politics, and stood for election as a councillor in Trafford, because of the 1980s and Thatcherite policies, and I am sure that many of my right hon. and hon. Friends did the same.
The Government have made choices about the severity and timing of cuts in local government budgets, but they are the wrong choices. The cuts are unfair, unreasonable and unmanageable. They are unfair because they hit the most deprived areas hardest, and will have an impact on the most vulnerable people. Affluent areas will not be hit by such deep cuts. Wokingham borough council, the least deprived unitary authority in England, will undergo cuts estimated at just 2.3% next year. The most deprived unitary authority in the country, Liverpool city council, is the hardest hit, facing estimated budget cuts of 12.3% next year alone.
Many of the excellent speeches that we heard, particularly those of Labour Members, were on that theme of unfairness. My hon. Friend the Member for Denton and Reddish (Andrew Gwynne) found it difficult to see any fairness in the cuts. He spoke of the 800 staff cuts with which his local authority is threatened, and of his concern about the impact on the voluntary sector. My hon. Friend the Member for North Tyneside (Mrs Glindon), who was a councillor for 15 years, told us that the Conservative mayor had urged Treasury and other Ministers to think again about the speed of their cuts. She said that she had asked officials to spread the reductions more evenly over the four years of the spending review.
My hon. Friend the Member for Blackpool South (Mr Marsden) talked about the help that his Conservative-controlled council had been given over issues of transience and deprivation, and his concern about the cuts in area-based grants. He spoke of the impact of cuts of £32 million, and said that the Conservative council leader had urged the Government to reconsider their approach—particularly their approach to front-loading, which would produce cuts of between 11% and 16%.
My hon. Friend the Member for Liverpool, Walton (Steve Rotheram) also talked about unfairness, focusing on the polarised nature of the Government’s approach. Estimates show that the most deprived areas will be hit hardest by the cuts, and that the least deprived will be least affected. My hon. Friend the Member for Barrow and Furness (John Woodcock) said that the Government should not adopt an approach that would render the funding of local areas blind to the needs of those areas, because that was neither fair nor progressive. My hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) talked about the speed of the cuts and the front-loading. She was rightly concerned about the impact on Liverpool city council, which, as I said earlier, is the most deprived unitary authority in the country. She was also concerned about the impact on jobs and, in particular, on small business.
The fear has been expressed that local authorities may be forced into damaging crisis measures. The Secretary of State set out what he expected from councils when he said that further financial freedoms announced for councils would mean that they could better protect front-line services such as care for the elderly, but last week Birmingham city council proposed restricting funds for social care to those who had been assessed as “critical”, the highest possible level at which to set eligibility. People with substantial or moderate needs would be “signposted” to private and third sector providers.
Cuts like those being suggested by Birmingham council will undoubtedly lead either to a greater reliance on unpaid family carers or significant care needs simply being unmet. My hon. Friend the Member for Lewisham East (Heidi Alexander) talked eloquently about how difficult she found it as a councillor to consider raising eligibility criteria, and in the end she and her colleagues did not do it. They are to be commended for that.
Birmingham council, which is run by the Conservatives and Liberal Democrats, has claimed that its strategy on adult social care is part of its version of the big society. As my hon. Friend the Member for Stockton North (Alex Cunningham) said, the third sector is the big society; forcing unpaid family carers into a much heavier caring work load is not the big society.
The Government’s cuts are unreasonable with a lot of changes being made in a very short time scale, and there is insufficient support for councils to pay inevitable redundancy costs. A number of Members have raised that issue. The Local Government Association estimates that next year councils will be facing 11% cuts in their formula grant and many councils will also lose area-based grants, which were designed to tackle poverty and deprivation. Many Labour Members have talked about the impact of those changes on their communities as specific grants that had their own targeting based on need have now been rolled into the main formula grant. London Councils says the way this works will cause London’s share of these grants targeted at need to evaporate. It has said that the distribution mechanism used by the Government is flawed and generates perverse and unfair outcomes. The Government could mitigate the impact of the changes by setting funding floors at the highest possible level, and we urge them to do so.
The hon. Member for Bermondsey and Old Southwark (Simon Hughes), who is not in his place, supported setting funding floors at the highest possible level. [Hon. Members: “Here he is.”] He is here now; welcome. The hon. Member for Bermondsey and Old Southwark, who is now in his place, also put forward the LGA’s five recommendations: to smooth out the front-loading so as to lessen the impact on deprived areas; to increase capitalisation to what councils need; to account for missing grants; to review councils’ ability to recover costs through fees and charges, which several Members have talked about particularly in respect of burial charges; and to avoid any unfair distribution of grant. I must say, however, that although the hon. Gentleman put those points forward, they were also all put forward by the shadow Secretary of State, my right hon. Friend the Member for Don Valley (Caroline Flint), in her excellent opening speech.
Many Labour Members have talked about the fear of job cuts, which, to their credit, some Members on the Government Benches said they regretted. It is time to think not only of the job losses in local government, but the knock-on effect in other sectors. Today we have heard that recovery in the construction sector is stalled until at least 2013, given that construction work from the public sector is set to fall by 17%. My hon. Friend the Member for Stockton North talked about the loss of construction through the cancellation of Building Schools for the Future and the planned local hospital. The chairman of the UK Contractors Group confirmed this point when he said:
“About 40% of our business comes from the public sector and so construction will not be immune from these decisions”
in local government.
My hon. Friend the Member for Liverpool, Walton undoubtedly remembers a similar impact on the construction industry in the 1980s—the torrid decade of Tory rule as he calls it, which he said were devastating for Liverpool.
Losing a job is devastating, and the cuts will clearly lead to substantial reductions in staffing across the local authorities affected. The LGA estimates that 140,000 local authority jobs will be cut next year, but as we have heard from a number of Members, councils will not be able to meet the capital costs of those redundancies because the £200 million currently set out by the Government to pay the costs of redundancy is simply not sufficient: if 140,000 jobs are indeed lost, it amounts to less than £1,500 per redundancy. As we have heard, councils may need up to £2 billion next year, 10 times more than the provision made by the Government. We say councils should be given the flexibility to fund those redundancy costs from capital, as they need.
The Government’s cuts are not only unreasonable; they are also unmanageable. A number of councils believe that they will not be able to set a balanced budget given the front-loading of cuts next year. My hon. Friend the Member for Scunthorpe (Nic Dakin) spoke very well about that and possible unintended consequences. The Association of North East Councils, a cross-party group, has called the Government’s proposed cuts to local government “undeliverable for some” councils.
The Secretary of State has not been willing to admit that the cuts are front-loaded, despite a number of attempts to draw him to do so today, but the reality is that many councils will face budgets cut by 14, 18 or even 20% next year. Many Labour Members have discussed that issue and, as my right hon. Friend the shadow Secretary of State said, the president of the Society of District Council Treasurers has called the front-loading disastrous. The leaders of the Local Government Association called on the Secretary of State to mitigate the front-loading of cuts, as it would
“bear disproportionately on local communities and vital frontline local authority services”.
Indeed, the Conservative leader of Bury council said that
“it is almost impossible to absorb such vast figures in the time that we have available”.
Councillors not having any time available to them has been a key theme of our debate.
Many Government Members, including the hon. Members for South East Cornwall (Sheryll Murray), and for Meon Valley (George Hollingbery), have talked about introducing more innovative ways of dealing with the cuts, but Labour Members say that the severe and unexpected front-loading of the cuts will mean that councils do not have the time to do that. Shifting to shared service models, renegotiating long-term contracts and working with other sectors as providers are major changes. They take time and money to implement and that time is just not there. My hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) made that point most eloquently. It was also made by the hon. Member for Bradford East, who said that the front-loaded cuts were “reckless economic vandalism” and that cutting required time.
In dealing with these unfair, unreasonable and unmanageable cuts, councils are not assisted by the mixed messages coming from Ministers. The Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill) told the Hackney Gazette:
“Local authorities have been aware for some time that funding reductions were imminent and should have been looking at…reducing budgets next year”.
Many Government Members pursued that same theme today.
At the same time, other Ministers are calling on councils not to make redundancies or to plan cuts to services. The Deputy Prime Minister has criticised councils for acting now, saying that
“they shouldn’t immediately start issuing redundancy notices for savings that they can phase in over four years”.
On adult care, the Minister responsible for care services has said:
“There is no justification for local authorities to slash and burn or…to tighten eligibility”.
When asked about the impact of cuts on voluntary organisation funding, the Minister responsible for decentralisation said:
“I expect local government not to draw up the drawbridge, but to treat voluntary organisations fairly and…to allow them greater access”.—[Official Report, 25 November 2010; Vol. 519, c. 446.]
When asked about the effect of the spending review on libraries, the Under-Secretary of State for Culture, Olympics, Media and Sport, the hon. Member for Wantage (Mr Vaizey), said:
“Local authorities have a statutory duty to provide a comprehensive and efficient library service. I shall be writing to all local authorities this week to remind them of that.”—[Official Report, 29 November 2010; Vol. 519, c. 514.]
Today, the hon. Member for Bermondsey and Old Southwark said that councils must not pick on the voluntary sector.
It appears that Ministers and some hon. Members do not want councils to cut areas for which they have responsibility or just feel that they can avoid doing so. As we have heard in this debate, Conservative council leaders and Lib Dem councillors up and down the country feel the same way, and they have been pressing their case to the Government. But up and down the country there are reports of councils having to do the opposite of what they are told by this Government. For example, Conservative-run North Yorkshire county council, which plans to close more than half its 42 libraries and two thirds of its residential care homes, cut £10 million from the highway maintenance, road safety, countryside and arts budgets. It also cut bus subsidies, even to rural areas. Ministers are being totally unrealistic about the problems that many councils now face. It is clear to us that the Government are not listening to them. Labour Members are listening, and I urge Members on both sides of the House to support the motion, including the hon. Member for Bradford East and his colleagues.
The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)
This has been a robust debate and is none the worse for that perhaps. The subject is important and there are rightly strong views on it. Many Members have spoken and I shall start by apologising in advance if I do not manage to mention individually the speech of every one of the 25 Members who spoke. I hope, however, that I can pick up on certain themes.
There have been some considered and thoughtful speeches from hon. Members on both sides of the House. Issues of genuine concern have been raised by Members on both sides and I shall come back to those in a moment. I regret to say that, in some cases, however, the seriousness of the debate has not been served by the simplicity and shroud-waving and by some of the clichés that have been used as Members have injected more and more purple passages. That does not help in dealing with this serious matter, because the Government have never made any secret of the fact that the circumstances facing local authorities are difficult. We have been honest about that and it is to the credit of my hon. Friends from the Liberal Democrats that, when they came into government, they had the courage to recognise that the circumstances facing the country were grave. They deserve better service than the carping from Opposition Members who have not yet had the decency to admit their responsibility for the mess that the country is in or to come up with a constructive alternative.
Let me say to the hon. Member for St Helens North (Mr Watts) that he need have no fears about my health. I would fear, however, for the health of the nation’s economy if he were to be let loose, on the basis of what he and his right hon. and hon. Friends have done already.
It is against that background that it is necessary for us to take difficult and regrettable measures. I spent 16 years in local government, initially during the time when Denis Healey was going to the IMF and Jim Callaghan was telling local government that the party was over. I shall not brook any lessons from Opposition Members about the effects of Labour economic mismanagement on local authorities. Yet again, my hon. Friends and I find that we have to pick up the pieces. I accept that there are tough decisions, but they have come about because of the wreck and the train crash that the previous Government made of the economy.
Let me consider some of the propositions in the motion. There is a criticism of the percentages, but it starts from a basic error. It complains that
“councils will lose, on average, 27 per cent….compared to 11 per cent., on average, for Whitehall departments”
There is a sleight of hand in that, because the average figure includes the protected Departments. Unless Labour is going to tell us that it was not going to protect those Departments, the second line of its motion does not compare like with like. Frankly, it is intellectually questionable on that basis. The motion
“regrets the frontloading of reductions”,
but sadly, because of the extent of our economic inheritance, there should be a swift move to deal with deficit reduction. All people have to work together in that.
Ironically, we see from the Treasury proposals left behind by the previous Government that they intended to make cuts of 14% in the first year and 11% in the second year. That might be a type of front loading. I do not think we will take any lectures on that from Opposition Members either.
Let me turn to the question of the unexpected severity. My right hon. Friend the Secretary of State pointed out that the previous Chancellor and the previous Prime Minister already made it clear that should Labour—unfortunately for the country—have been returned at the election, there would have been significant cuts. We have simply been honest about it and shouldered the burden that they neglected to take on board. We do not need to take any lessons there.
Robert Neill
I shall, because the hon. Gentleman has been very vocal all night.
Karl Turner
It seems rather contradictory for the Minister to say on the one hand that we did not have a plan to reduce the deficit and on the other hand that we seemingly did. Which is it? Come on, Minister.
Robert Neill
The hon. Gentleman gets it right. Seemingly none of us knows what Labour’s plan was and the Leader of the Opposition does not know either. I assume that the hon. Gentleman will progress rapidly to the Front Bench, as he is as vague on policy as the leader of his party. If that is the best the hon. Gentleman can do by way of intervention, I suggest he saves his knees the trouble in future.
May I just—[Interruption.]
Mr Speaker
Order. Will the hon. Gentleman resume his seat for a moment? It is always a pleasure to listen to him, but he is swivelling and perambulating. I want to hang upon his every word; he must address the House.
Robert Neill
I shall do my best, despite the noise.
What we have seen today is an exhibition of wriggling by the Opposition. They have failed to take on board serious concerns raised by hon. Members. Reference was made to my hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes)—[Interruption.] I was actually looking at you, Mr Speaker; I think that is courteous too. Reference was also made to my hon. Friend the Member for Bradford East (Mr Ward). Hon. Members have made serious points. The need for deficit reduction does not brook significant delay, but fair points have been made about it being appropriate to look not just at formula grant but at other spending powers available to local authorities. My right hon. Friend the Secretary of State has indicated that we are continuing to do that. We have taken steps to roll more grant into the formula grant, so the arguments that were made on that issue do not sensibly contrast like with like.
We have sought to give more flexibility in these undoubtedly difficult times by ending the ring-fencing of all revenue grants from 2011-12—something that the Labour Government never got around to doing. We are including single, non-ring-fenced, early-intervention grant worth about £2 billion. We are significantly simplifying and streamlining grant funding by rolling about £4 billion of grants in 2010-11 into the unhypothecated formula grant and reducing the total number of grants from 90 to 10. All those measures are designed to bring much greater transparency, as hon. Members on the Government side have pointed out. Despite their 13 years in office, the previous Government neglected to do that, so we need not take lessons from them on fairness or transparency.
As the Secretary of State has indicated, we are continuing the system of floor protection, which will help the most vulnerable authorities. That degree of ring-fencing, plus the other, greater freedoms that will be given in the decentralisation Bill that will be introduced shortly, will significantly assist local authorities in directing their resources to the most vulnerable. The fact that resources are limited is entirely the responsibility of Opposition Members rather than Government Members and the Opposition should never seek to wriggle out of that.
Let me congratulate one or two hon. Members in particular. My hon. Friend the Member for Meon Valley (George Hollingbery) made a particularly thoughtful and considered speech. He talked about the inevitability of floors and ceilings in the current system and the fact that there are real concerns in shire areas as well as urban areas. Any Government have to carry out a balancing act and that is what we seek to do. He and other hon. Members rightly referred to the need to move away from a formula that is past its sell-by date. Unlike our predecessors, this Government have grasped that nettle and committed to a swift review of local government resource in the first six months of next year.
My hon. Friend the Member for Bermondsey and Old Southwark made fair points on behalf of London councils and the Local Government Association. The Secretary of State has met LGA representatives, and let me tell the hon. Member for Stockton North (Alex Cunningham) that I am happy to meet his fire authority; I have met a number of others already. We are protecting fire services, which are getting a lesser degree of reduction, and the profile is different, so steps are being taken in that regard. I will happily meet any authority that seeks to discuss these issues with me.
My hon. Friend the Member for Halesowen and Rowley Regis (James Morris) made an exceedingly well informed and powerful speech. He talked about the need, at times such as these, to move to greater transparency. It was pretty telling that certain Opposition Members rather jeered at the mention of the £500 in relation to transparency. That shows a patronising attitude towards putting ordinary people in the driving seat. Perhaps that is the difference between the Government and the Opposition on this issue.
My hon. Friend the Member for Croydon Central (Gavin Barwell) carried out a comprehensive demolition job on the speech by the shadow Secretary of State, the right hon. Member for Don Valley (Caroline Flint), and the entire proposition behind the Opposition’s motion. The previous Government were going to cut, and they would have cut as deeply. They were going to eliminate the deficit; the argument was over timing. The state that we discovered when we came into government meant that swift measures were necessary. To pretend otherwise is to behave like the people who set fire to the house and then blame the fire brigade when it comes in to put the fire out. The intellectual bankruptcy of the Opposition is shown by the approach that they have adopted to these matters.
I say to the hon. Member for Mitcham and Morden (Siobhain McDonagh)—whom I have known in London government for a long time—yes, I accept that there are councils of all political complexions trying hard in difficult times. My own council is doing so, as is hers. Equally, she will understand that, despite the sympathy that we have for those difficulties, as anyone in the business world will tell her, it is often best and most sensible to take steps towards restructuring at an early stage. That is particularly appropriate in the case of local authorities with a full range of functions. There are good examples not only in London, but across the country of local authorities making real structural and operational change. That needs to be done quickly.
I appreciate the point made by a number of hon. Members about capitalisation. I understand what is said, but it should be remembered that we are making £200 million available for non-equal pay capitalisation. Capitalisation is an exception to the normal accounting processes. Because capitalisation is permission to borrow, that ultimately has impacts upon revenue spend because it has to be paid back. It must therefore be strictly controlled. Although I understand that councils will inevitably say they want more, Government must be realistic and set limits to an exception to the normal process.
That we are not being dogmatic is reflected in the fact that we have adopted a different profile in relation to fire authorities, because experience shows that it takes single-purpose authorities longer to reconfigure their working arrangements than those that have a range of purposes which can be more effectively shared. We have been sensible and proportionate in our approach.
The Secretary of State stressed—I hope Members from all sides will take this on board, as there seemed to be a degree of consensus on the matter—that it is important that local authorities do not resort to the old-fashioned way of salami slicing and, in particular, cutting grant to the voluntary sector. That is usually important. We will fail if local authorities go back to the tried old ways of doing things. We want to encourage them to do otherwise.
That is why, in the localism Bill, we will establish new rights for voluntary and community groups to deliver local services. That is why the Government have created a transition fund of £100 million to be spent in 2010-11. It will support the voluntary and community sector during the first year of the spending round. Through the localism Bill we will also give voluntary and community groups the right to challenge local authorities where they believe that they can run services differently or better. There is a raft of measures to support the voluntary sector, none of which was adopted by the previous Government in their 13 years in office—another example to demonstrate why we need take no lessons.
Hazel Blears
I thank the right hon. Gentleman. Does he acknowledge that the gap in voluntary sector funding is likely to be in the region of £3 billion as a result of local government cuts, and his £100 million transitional fund is a drop in the ocean?
Mr Alan Campbell (Tynemouth) (Lab)
claimed to move the closure (Standing Order No. 36).
Question put forthwith, That the Question be now put.
Question agreed to.
Main Question accordingly put.
Paul Farrelly (Newcastle-under-Lyme) (Lab)
On a point of order, Mr Speaker, the next motion on the Order Paper is about the time the House will have to debate university tuition fees, which is a huge issue for students and their families in this country. In 2003, the White Paper was published a full year before the vote, and in 2005, whether some of us liked the policy or not, the Government put their proposals to the general public at an election. In contrast, this year nobody voted for these plans and we have been told that we have only three hours for debate and no time for discussion of whether that is a proper amount of time for the House. Mr Speaker, could you advise us how the House can place on record its unease about how the vote is, frankly, being rushed through, and how coalition Ministers are running scared of proper debate and examination of their plans?
Mr Speaker
The short answer to the hon. Gentleman’s inquiry about how best he can register his concern is that, as I think he knows, he has just done so. It is very clearly on the record. As a very experienced Member of this House, he will also be aware that the form of such a motion and the question of whether it is debatable is not a matter for the Chair. However, the hon. Gentleman has registered the point and I hope that he feels pleased to have done so.
Greg Mulholland (Leeds North West) (LD)
Further to that point of order, Mr Speaker. May I ask the Chair how much time Back-Bench MPs will get to speak in the three-hour debate on Thursday? That is an issue of huge concern to many hon. Members, who feel that there is insufficient time to debate a matter of such huge importance to ourselves and our constituents all round the country.
Mr Speaker
The short answer to the hon. Gentleman is that he can ask me how long there will be for Back Benchers to speak—proof of that is that he has done so—but I am afraid that I am unable to give him an answer to that question. What I can say to him is twofold: first, as he knows, I am always keen that Back Benchers in this place should get the maximum opportunity to put their case; and secondly, the Leader of the House and the Deputy Leader of the House are both present, fortuitously or otherwise, and they have heard the hon. Gentleman’s point of order.
Business without Debate
(13 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Speaker
I was about to say that the Question is as on the Order Paper, as many as are of that opinion say Aye.
Mr Speaker
Objection taken. [Interruption.] Order. The Government Chief Whip has absolutely no business whatsoever shouting from a sedentary position. He—[Interruption.] Order. The right hon. Gentleman will remain in the Chamber. He has absolutely no business scurrying out of the Chamber. [Interruption.] Order. The Chief Whip has absolutely no business—
The Parliamentary Secretary to the Treasury (Mr Patrick McLoughlin)
We all saw you.
Mr Speaker
Order. The right hon. Gentleman has no business behaving in that way. The objection has been registered, and it has been registered in a perfectly proper way. I thought it proper to put the Question. The objection had been registered, and it was registered clearly. The right hon. Gentleman has nothing about which to complain.
Delegated Legislation
Motion made, and Question put forthwith (Standing Order No. 118(6),
Electronic Communications
That the draft Wireless Telegraphy Act 2006 (Directions to OFCOM) Order 2010, which was laid before this House on 27 July, be approved.—(James Duddridge.)
Question agreed to.
Motion made, and Question put forthwith (Standing Order No. 118(6),
Animals
That the draft Welfare of Farmed Animals (England) (Amendment) Regulations 2010, which were laid before this House on 8 November, be approved.—(James Duddridge.)
Question agreed to.
European Union Documents
Motion made, and Question put forthwith (Standing Order No. 119(11),
Right of Information in Criminal Proceedings
That this House takes note of European Union Document No. 12564/10 and Addenda 1 and 2, Draft Directive of the European Parliament and of the Council on the right to information in criminal proceedings; and endorses the Government’s support of the proposal to ensure that individuals subject to criminal proceedings across the EU are given timely information about their rights, information on the accusation against them and access to evidence.—(James Duddridge.)
Question agreed to.
Joint Committee on Consolidation, &c., Bills
Ordered,
That Mr Robert Buckland, Martin Caton, Mrs Jenny Chapman, Damian Collins, Jim Dobbin, Mr Stephen Dorrell, Charlie Elphicke, Paul Farrelly, Yvonne Fovargue, Jesse Norman, Sir Robert Smith and Justin Tomlinson be members of the Select Committee appointed to join with a Committee of the Lords as the Joint Committee on Consolidation, &c., Bills.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)
Royal Fleet Auxiliary
(13 years, 5 months ago)
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John McDonnell (Hayes and Harlington) (Lab)
I refer to my entry in the Register of Members’ Financial Interests as the convenor of the National Union of Rail, Maritime and Transport Workers parliamentary—[Interruption.]
Mr Speaker
Order. I apologise to the hon. Gentleman. May I appeal—[Interruption.] Order. May I simply appeal to Members who are leaving the Chamber to do so quickly and quietly? It is quite simply a matter of courtesy—nothing more, nothing less.
John McDonnell
Thank you, Mr Speaker.
I refer to my interest as the convenor of the RMT group of MPs. I requested this debate to draw attention to and applaud the work of the Royal Fleet Auxiliary, and to raise concerns about its future in the face of looming cuts to ships and crew, and the threat of privatisation.
In the statement to the House on the strategic defence and security review, the Secretary of State for Defence made no reference to the Royal Fleet Auxiliary, nor is there a reference to it in the document. However, in the supporting documents, the future of the RFA is explained more specifically. It is clear from the policy briefing that there will be a range of cuts to ships:
“We plan to withdraw from service one Landing Ship Dock Auxiliary, one Auxiliary Oiler and one Auxiliary Oiler replenishment.”
It goes on to state that there will be personnel cuts:
“The Department has announced that there will be sizeable reductions in the number of civilians employed by MOD. The RFA will bear its share of these. The future manpower strength of the RFA will reflect its reduced size. Details will be announced in due course.”
More specific details were announced in a memorandum from Commodore Bill Walworth:
“SDSR for the RFA means we will lose a tanker, probably Bayleaf, an LSD(A)”—
landing ship auxiliary—
“probably Largs Bay, and an AOR”—
auxiliary oiler replenisher—
“probably Fort George.”
He stated that that would probably happen by April 2011. At the same time, we heard about the regeneration of Fort Austin, which is certainly welcome.
Dr Julian Lewis (New Forest East) (Con)
I am extremely surprised and alarmed at the suggestion that one of the Bay class ships might be disposed of. Those ships are brand new and have enormous military value, so much so that the Royal Navy has cast covetous eyes on them in the past, thinking that they ought to be fully RN-manned. Is the hon. Gentleman absolutely certain that there is a suggestion that Largs Bay might be disposed of so early in its service life?
John McDonnell
I can only refer the hon. Gentleman to the memorandum from Commodore Bill Walworth, who is responsible for the RFA, which specifically names those ships. I think that it is now in the public domain as a result of reports in Lloyd’s List. We will know the situation more clearly by April 2011, but those ships have been identified. I agree with the hon. Gentleman that it is worrying that a relatively new craft is concerned.
Further reviews are taking place, in particular the value for money review. The value for money review undertaken by the previous Government came to conclusions about the future of the RFA and its retention in the public sector. A further value for money review is linked to the SDSR and the comprehensive spending review. It looks as though the proposals, again according to a memorandum from Commodore Walworth, identify a target figure of 10% savings, which includes a significant number of personnel. If 10% is translated across, 220-odd seafarers could be faced with redundancy.
Anxieties have been raised in the various memorandums and documents that have entered the public domain about the potential privatisation of the service. A letter from Commodore Bill Walworth that I believe went to all personnel, including the unions, refers to a benchmarking exercise that has taken place with the shipping industry that was
“intended to demonstrate the value for money of the operational outputs that we all deliver.”
Benchmarking is perfectly appropriate if we are trying to ensure that there is value for money, but I have anxieties because of a further e-mail that is quoted in Lloyd’s List—I am not sure whether it has leaked or is in the public domain. It is from the RFA’s value for money review group:
“To date there has been work carried out to establish baseline costings of the RFA to inform the review and establish a set of requirements for the RFA that is understandable to”
the shipping industry. It continues:
“Two members of the Review Group will approach”
the shipping industry
“shortly to gauge their appetite to conduct the range of operations carried out by the RFA…This will probably start next week and we can anticipate some press interest.
RFA management has been involved in this work, to ensure that the private sector understands what is required to replicate current activity.
We will continue to work to ensure that when commercial offers are considered by the Review Group they take into account all that the RFA offers alongside that of the commercial options.”
Mr Edward Leigh (Gainsborough) (Con)
The hon. Gentleman should be congratulated on securing the debate, which gives us an opportunity to say that the Government must be aware that the Royal Fleet Auxiliary, with its unique place in our maritime history, is held in very warm regard on the Conservative Benches. Any attempt to privatise it, or to deal with it through death by a thousand cuts, will be fiercely resisted.
John McDonnell
I welcome the hon. Gentleman’s comments. My reason for seeking the debate was to get some clarity from the Government about what their intentions are, because at the moment we rely on e-mails circulated within the service itself appearing in Lloyd’s List.
The information that has been put into the public domain has left the RFA in an extremely worrying climate of uncertainty, which is not good for the service, certainly not good for the RFA personnel and their families, and not good, I believe, for the defence of the country.
It is worth reminding ourselves of the long and proud history of the RFA, which the hon. Gentleman has just touched upon. It celebrated its centenary in 2005, having started life in 1905 to give the Royal Navy capability and support at sea, food, fuel, ammunition and supplies. Its motto is “Ready for Anything”. It has always been crewed by civilians, who act as reservists, and has played a major role in every engagement of the past century. RFA officers and ratings delivered distinguished and professional support in every naval theatre of operations in the second world war, from the Arctic to the Pacific. Since then, the RFA has served to support the Royal Navy and Army in Korea, Suez, Cyprus, Kuwait, Borneo, Belize, Aden and even the Icelandic cod wars.
Stephen Pound (Ealing North) (Lab)
My hon. Friend reads out that roll of very considerable honour, so I am sure he needs no reminding that the RFA vessel Sir Galahad suffered fatalities in the Falklands. Those who crewed that ship died for our country at that time.
John McDonnell
I can only say that it reflects the professionalism, commitment, courage and determination of the officers who served on the Sir Galahad that they held to their task throughout the period of being blitzed.
More recently, the RFA played a crucial role in the Gulf war and was cited by the Select Committee on Defence for its vital contribution through the effective delivery of logistics and support. Its crews are civilian and follow the merchant navy training qualification pathways, but over the years it has developed specialist training in helicopters, firefighting, the use of defence systems, specialist navigations, naval communication systems and command systems. It now provides amphibious support and strategic sealift facilities, and provides casualty reception and forward repair functions.
Interestingly, an element of the RFA’s work that has not been sufficiently highlighted in the past is its role following natural disasters. It has provided aid and support, playing a key role in a number of African countries, in Sri Lanka and in the Caribbean. It is now working heavily alongside the US coastguard to tackle drug smuggling operations, and some may have read in the past month that RFA Fort Victoria, in a patrol between Somalia and the coast of the Seychelles, intercepted Somali pirates. That is an incredible record of professionalism, service, courage and determination, and the service is a world leader in its field.
There are 2,300 seafarers in the RFA, and they are employed under RFA conditions of service, which reflect their need to serve in war zones and face war hazards at times. The cost is £100 million. It is cost effective and highly efficient, but stretched to meet existing demands.
Sarah Newton (Truro and Falmouth) (Con)
I thank the hon. Gentleman for securing this debate, and I would like to associate myself with his comments on the excellent service that the RFA provides. Does he agree that there is real innovation in how it works with industry? In particular, I am thinking of A&P, the ship repairer at my port of Falmouth, which in the Minister’s own words has delivered excellent value for money.
John McDonnell
I have the Minister’s response to the hon. Lady’s parliamentary questions demonstrating the RFA’s broader contribution to what is described as the maritime cluster and the excellent role the service provides beyond the narrow remit of logistics.
If there are to be cutbacks to ships and crew, many of us will be extremely concerned. There is already pressure on this severely stretched service, and further cuts will undermine the service’s potential. It is an ever-changing world. We cannot judge what the challenges will be in the future, so we need to retain the capacity to respond to threats and disasters that might occur. However, it is extremely doubtful whether, with the planned cuts, the threat of privatisation and the cutbacks in personnel, the service would be able to respond to those challenges. The whole edifice of the RFA will be put at risk if the cuts go ahead.
There are wider ramifications for the maritime industry. The RFA is now the major employer of UK officers and ratings. It has gone down from 30,000 UK officers and ratings in 1980 to fewer than 9,000 today, and the RFA is the largest single employer. Cuts on this scale would significantly reduce our national pool of merchant seafarers, deny opportunities to the next generation and damage what we describe now as the maritime cluster and our ability to rise to future challenges in terms of both the Merchant Navy and the Royal Navy. It would also be a devastating blow to the morale of the existing personnel.
If job cuts are to happen, may I suggest to the Minister that, given the age profile of current serving personnel, they could be achieved through natural wastage rather than redundancies? However, my intention is to persuade the Government not to pursue any further jobs cuts or closures of ship or craft at all.
On the threat of privatisation, there is concern that the service could, if privatised, be subject to commercial pressures of the market that would not maintain the long-term commitment to the service required. The search for short-term profits by sweating the assets, as we have seen in other privatisations, could undermine the service. It is a risky enterprise. Also, if it is privatised, it is highly likely that it would be taken over by a foreign-owned company, with the potential for a foreign crew. Again, Maersk, the Danish conglomerate, has already expressed an interest. However, there are strategic and political sensitivities, if not risks, if such a key strategic service is no longer in the ownership and control of the state it serves. This is not a back-room function; it is a front-line service operating in war zones.
Before the Minister responds, my hon. Friend the Member for North Durham (Mr Jones) would like to say a few words, because he played a role in the last Government on this issue. May I quickly say, therefore, that if the cuts, or the threat of privatisation, go ahead, there will be a sense of grievance and anger at the thought that this service and its personnel, with a history of courageous and effective service, could be sold off to the highest bidder from wherever.
I warn the Government that there would be a backlash. Yes, it would be led first by the unions, but there would be a much wider sense of betrayal in the wider community. I therefore urge the Government to make clear their intentions for the future of the RFA and reject the cutbacks and privatisation. On behalf of the RMT—Nautilus will feel the same—I would welcome a meeting with the Minister to talk through the issues facing the RFA and to look to plan its long-term future. The service is too important to allow considerations of short-term savings to put it at long-term risk. I urge the Minister to think carefully before any further decisions are made.
Mr Speaker
Order. Before I call the hon. Member for North Durham (Mr Jones), I emphasise that I would like the Minister to have 10 minutes in which to reply to the debate, so the hon. Gentleman needs to finish by 10.38 pm.
Mr Kevan Jones (North Durham) (Lab)
I congratulate my hon. Friend the Member for Hayes and Harlington (John McDonnell) on securing this important debate. I know from my time as a Minister at the Ministry of Defence that he has always been a strong advocate for the Royal Fleet Auxiliary. I would like to join him in paying tribute to the bravery of the men and women of the RFA who put themselves in harm’s way to support the Royal Navy and who have, as my hon. Friend eloquently pointed out, won numerous honours in the century of the RFA’s history. I should also like to put on record my tribute to the important work of the Royal Fleet Auxiliary Association, which works tirelessly to support members of the RFA, as well as former members and their families.
Anyone who has spoken to individuals who have served in the Royal Navy will know of the value that the Royal Navy places on the work of the RFA. It has an important resupply role, and, as a Minister, I was humbled to see the technical expertise that it employs for refuelling at sea, for example. Its role is not only logistical, however. It is currently engaged in supporting the training of the Iraqi army; mine-sweeping around the Gulf; contributing to anti-piracy protection; working in the Caribbean; assisting with training exercises; and carrying out anti-smuggling work. That explains that its role is not just a logistical one; it also plays a role in supporting the Royal Navy. It is also important to highlight the work that it does in its own right.
My hon. Friend has already pointed out that the RFA is now the largest single employer of British seafarers and officers, including some 2,300 seafarers who live all over the UK. I am honoured to have a number of them living in my constituency. The strategic defence and security review did not provide them with the clarity about their future that they need.
When I was at the Ministry of Defence, I commissioned a value-for-money review—under pressure from the Treasury, I hasten to add—into the Royal Fleet Auxiliary. I know that the report was completed by the time of the last election. I would be interested to hear from the Minister what role the report has played in the decisions that were taken in the strategic defence and security review. What my hon. Friend has described tonight is the kind of salami-slicing that the Defence Secretary said he did not want. I fear that we might be seeing a return to the cost-driven, ill-informed logic from the Treasury that I faced when I was a Minister. Such logic says that those individuals in the RFA can be replaced by civilian contractors, not recognising the fact that they put themselves in harm’s way and do a valuable job on our behalf. I would like to know the status of that review and its conclusions, and whether they are to be published.
It is important to get some clarity for our brave servicemen and women of the Royal Fleet Auxiliary. It is a strategic resource with a proud history, and it is important to end the uncertainty hanging over it, which I was conscious needed to be brought to a conclusion very quickly, away from the pressure from the Treasury. We need some clarity very soon, so that those brave servicemen and women can know that they have a future and can continue to play their vital role in the defence of this country.
The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)
I congratulate the hon. Member for Hayes and Harlington (John McDonnell) on securing this Adjournment debate on the very important issue of the future of the Royal Fleet Auxiliary, and on providing me with an opportunity to speak on the issue, albeit rather more briefly than I had expected. I understand his relationship with the National Union of Rail, Maritime and Transport Workers, and I applaud him for speaking up for the work force. I absolutely accept that that is right and proper. I will put a plug in for myself and mention that, when I first came into the House—in 1983, I think—I served on the Employment Select Committee, as it then was, and instigated and chaired an inquiry into employment in the merchant navy, which was then under serious pressure—as indeed it has been since.
I shall deal in a few moments with the review mentioned by the hon. Member for North Durham (Mr Jones). I say to everyone in the Chamber—there is a surprisingly large number of Members present for an Adjournment debate—that this is not the place from which we would have wished to start. I do not want to get into party political point scoring, but everyone understands that we are in a difficult financial and economic situation and that the Government cannot go on spending money that they do not have.
Mr Robathan
As I said a moment ago, no one would have wished to start from here, but we have to look at all options. Some programmes in the defence budget have already been cancelled—they have been announced—even though we have spent a lot of money on them. We did not wish to do so, but we had no further money to pour into them.
Let me speak briefly about the Royal Fleet Auxiliary. It was established in 1905, providing coaling ships to supply the Royal Navy’s network of bases around the world. It has continued to evolve into what we see today in the global reach that the RFA delivers for defence and the Royal Navy. Although its origins are the merchant navy, the RFA has developed in a specialised way to meet the Royal Navy’s requirements. It is linked to the Royal Navy by heritage, which has been mentioned, tasks, management, chain of command and ethos.
The commercial merchant navy has had a long history of working with the Royal Navy over many centuries and has had to fight and defend itself to develop commerce around the world. Defending itself against piracy, for instance, is not a new challenge. More recently, developments in warfare and warships, specialisation of commercial ships and their design limit the utility of commercial shipping to providing core support to military operations. While commercial shipping has little knowledge of warfare, over the past 30 years the RFA has developed to meet the specialised needs of 21st century warfare.
The RFA is the modern example of merchant shipping working and prepared to fight alongside the Royal Navy. It is the means by which the Navy operates globally. Equally exposed to the risk, it is a key enabler for worldwide reach of the UK’s armed forces. The RFA has essential qualities that make it different, as the hon. Member for Hayes and Harlington said, and that enable it to deliver operational quality effectively to the Ministry of Defence and the Navy, blending the commercial manning and ship management models into military operations. As a result of the versatility of the ships and the knowledge that the work force has accumulated over many years, the RFA has become a deliverer of operational capability as well as an enabler.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con)
I congratulate the hon. Member for Hayes and Harlington (John McDonnell) on securing this debate. May I ask the Minister whether he would be willing to consider Plymouth as one of the homes of the port basing when he has to decide the location?
Mr Robathan
My parents-in-law live just outside Plymouth, which might make this a bit personal. We will consider and review everything, but I make no promises one way or the other to my hon. Friend.
The responsibilities of today’s RFA are far from commercial in nature, but wholly integral to the Royal Navy’s continued deployments and presence around the world. For instance, RFA ships currently operating east of Suez are part of the wider maritime security effort for stability in the region. RFA Cardigan Bay is in the northern Gulf and is the logistics hub supporting the training base for the Iraqi navy, defending its oil platforms. RFA Lyme Bay is the headquarters ship for allied mine counter-measure ships. Fort Victoria has a large team of Royal Marines, a number of boats and a Merlin helicopter and is working with HMS Northumberland on counter-piracy operations off the Somali coast. I suppose I cannot use visual aids, but there is a very good one on the front of the magazine, Navy News. I cannot show it, but it says “Busted” and it is about an RFA ship.
Without describing the RFA in too much detail, I turn to deal with the review, as I believe that it is the review and the strategic defence and security review that really concern the hon. Member for Hayes and Harlington. The RFA’s novel approach to delivering maritime operational support is not bought at the expense of its professionalism. I pay tribute, as did the hon. Gentleman, to the work of the RFA and the dedication of its staff.
The review of the RFA was initiated by the previous Administration. Some have suggested that it was driven by a decision to commercialise the RFA. It says here that I cannot speak for the intention of the last Administration, but I was glad to hear the hon. Member for North Durham explain that it was indeed driven by the Treasury.
Mr Robathan
I believe that candour is important in politics.
The Government are anxious to ensure that we deliver the capability that is required, and do so as efficiently as possible. To that end, we undertook an informal market exercise over the summer to test the assertion by some that industry could deliver the tasks currently conducted by the RFA more efficiently. I should emphasise that that was not a formal process, but was undertaken to ascertain the extent to which the question was worth addressing—as some, including my hon. Friend the Member for Canterbury (Mr Brazier), who questioned General Richards a few days ago, have suggested it is.
While there was strong commercial interest in contractorisation of the RFA and the industry would be prepared to operate the service at all threat levels, and although the study concluded that there might be scope for some market efficiency savings, no enthusiasm was expressed for either acquiring the existing RFA flotilla—in whole or in part—or assuming both the capital and operating risks. On that basis, therefore, there is insufficient evidence in favour of changing the current RFA business model, which has served us well for a number of years. However, we are keen to ensure that it delivers the required responsibilities as efficiently as possible.
The strategic defence and security review has involved some very difficult but unavoidable decisions for the armed forces, none of which has been made lightly. They will lead to changes in the size of the RFA that will reflect the changing size and shape of the Royal Navy. Final decisions have not yet been made, beyond the decommissioning of one Bay class amphibious support ship that was part of the SDSR announcement in October. My right hon. Friend the Secretary of State hopes to be in a position to announce the detailed force structure changes shortly, but the House will understand that some reductions in the size of the RFA will be involved. They will include personnel reductions, but, like the hon. Member for Hayes and Harlington, we hope that they can be made as much as possible through natural wastage. The hon. Gentleman made a good point about the age profile of the work force.
The Department is currently discussing with the departmental trades unions the need for early release activity to manage what will, I fear, be surplus RFA manpower. Until those consultations end, I cannot give the details of how members of the RFA might be affected, or the terms on which reductions will be managed.
My speech has been rather curtailed, but let me end by saying that although the challenges to be faced by the RFA after the SDSR and the value for money study are not insignificant, they are challenges that we believe the organisation has accepted head on, and they reflect an element of the difficult decisions that we have had to make throughout the SDSR. What I understand is known, in nautical terms, as the headmark for the Government remains Future Force 2020. We need to manage expectations and uncertainty—which we do not like—for both uniformed and civilian personnel, and that will be a key leadership challenge at all levels.
Let me again commend the Royal Fleet Auxiliary for the work that it does, and for the capabilities it brings to the naval service and defence now and into the foreseeable future. I am always happy to have a talk with the hon. Member for Hayes and Harlington, and look forward to doing so again.
Question put and agreed to.
Written Ministerial Statements
(13 years, 5 months ago)
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Anti-Avoidance (Tax Policy)
(13 years, 5 months ago)
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The Exchequer Secretary to the Treasury (Mr David Gauke)
The Government are fully committed to tackling tax avoidance and will take necessary steps to protect the Exchequer and maintain fairness in the tax system.
At the June Budget the Government set out their commitment to improving predictability and stability in the tax system in “Tax policy-making: a new approach”. In that discussion document, the Government announced that they will adopt a more strategic approach to the risk of avoidance. By building in sustainable defences to avoidance we will reduce the need for frequent legislative changes and limit the cases when the changes are introduced with immediate effect.
However, there will still be occasions where the Government need to introduce immediate changes to legislation in order to address significant avoidance risks. The Government’s response to these risks will be balanced with their commitment to improving predictability and stability in the tax system. The Government will shortly publish a draft protocol that will set out the circumstances in which they will consider changing legislation with immediate effect. This will be published alongside the Government’s response to the consultation on improving tax policy making on 9 December.
It is within this context that the Government are announcing today a number of changes to legislation to tackle tax avoidance. Some of these have immediate effect.
Group Mismatches
The Government are introducing legislation taking effect from 6 December to counter tax avoidance schemes that aim to reduce a group’s liability to corporation tax through asymmetrical tax treatment of intra-group loans or derivatives (group mismatch schemes).
The legislation amends section 418 of the Corporation Tax Act 2009. Section 418 was introduced to block schemes that involve the provision of intra-group finance through the use of convertible securities. In the schemes the debtor company claims tax deductions for larger amounts than the credits on which the creditor company is chargeable. The amendments ensure that section 418 will apply where:
a company connected with the creditor company is or may become entitled or required to acquire shares in a company; or
amounts are taken into account under the loan relationship rules in determining the chargeable profits of a controlled foreign company.
Because of repeated avoidance in this area, and following the issue of a discussion document in March, HMRC has today published a technical note containing draft legislation to tackle group mismatch schemes using a principles-based or generic approach. This legislation will come into force from the date of Royal Assent to Finance Bill 2011, following further consultation on the detail.
Derecognition
The Government are introducing legislation taking effect from 6 December to counter tax avoidance schemes involving accounting derecognition. This follows consultation on a technical paper published by HMRC on 6 July.
The proposed legislation amends sections 311 and 312, and sections 599A and 599B, of the Corporation Tax Act 2009. This legislation addresses avoidance schemes under which, in accordance with generally accepted accounting practice (GAAP), amounts that are taxable under the rules on loan relationships and derivative contracts are not fully recognised in a company’s accounts. In such cases, a company’s corporation tax computations must be prepared on the assumption that all such amounts were fully recognised. The legislation currently applies only where a number of specific conditions are met, and has been amended on a number of occasions since its introduction in 2006, in response to new avoidance schemes that purport to circumvent the conditions.
As a result of persistent avoidance using derecognition schemes, the Government are announcing that the legislation will now apply as a general rule, without reference to specific conditions, wherever a company is a party to tax avoidance arrangements and, in accordance with GAAP, amounts are not fully recognised in its accounts. In addition, a company will be denied a debit for a loss arising on derecognition of a loan relationship or derivative contract, again where the company is party to tax avoidance arrangements.
Further details are contained in a draft explanatory note published on HMRC’s website today, together with the proposed draft legislation.
Disguised Remuneration
As confirmed at the June Budget, the Government will introduce legislation to tackle arrangements involving trusts or other vehicles used to reward employees, which seek to avoid or defer the payment of income tax or national insurance contributions (NICs), including to provide a tax-advantaged alternative to saving beyond the annual and lifetime allowances available in a registered pension scheme.
A further announcement will be made shortly.
Functional Currency—Investment Companies
Draft legislation will be published on 9 December 2010, alongside other draft clauses for Finance Bill 2011, to counter avoidance involving changes in the functional currency of an investment company. The legislation will take effect for accounting periods beginning on or after 1 April 2011. This will ensure that when a UK resident investment company changes its functional currency no foreign exchange gains or losses arising from loan relationships or derivative contracts will be brought into account for tax purposes in the first period of account using the new functional currency.
At the same time, investment companies will be able to elect, prospectively, for a different functional currency for tax purposes than the currency used in the accounts.
VAT Supply Splitting
Draft legislation will be published on 9 December 2010, alongside other draft clauses for Finance Bill 2011, to counter avoidance relating to the supply of services where arrangements have been made for the supply of printed matter that is ancillary to those services to be made by a different supplier.
The VAT Act will be amended to withdraw zero-rating from printed matter where it is ancillary to a differently rated service, and where, if the service and printed matter had been supplied by a single company, the printed matter would not have been zero-rated.
The legislation will come into force from the date of Royal Assent to Finance Bill 2011, following consultation on the detail.
General Anti-Avoidance Rule
As announced in the June 22 discussion document “Tax policy making: a new approach”, HMRC engaged informally over the summer with a range of interested parties to consider whether there was a case for a general anti-avoidance rule (GAAR) in the UK. Those discussions showed that there was some support for such a rule, but it was clear that there were also concerns that a rule would generate uncertainty about the tax treatment of business transactions and about how that uncertainty could be managed in practice.
I am setting in train a study programme to establish whether a GAAR could be framed to meet the objectives of deterring and countering tax avoidance in a fair way, while providing certainty, retaining a tax regime that is attractive to business and minimising compliance costs for businesses and HMRC and, if so, how the provisions of the GAAR might be framed.
This study will be led by Graham Aaronson QC, supported by a small group of experts. The membership of the group is being finalised, and details will be announced in January. The group will complete its study by 31 October 2011, informing Ministers of its conclusions and, if applicable, providing model provisions and explanatory notes. The Government will consider the outcome of this work as part of the Budget decision-making process, taking account of the impact on certainty for taxpayers as to the tax treatment of transactions and the implications for HMRC in terms of costs and other priorities. The Government would not introduce a GAAR without further formal public consultation.
I will place a copy of the terms of reference for the group in the Library of the House.
Disclosure of Inheritance Tax Avoidance
HMRC are today publishing a document in response to the consultation on bringing IHT on transfers of property into trust within the disclosure regime (DOTAS). The Government will, as planned, bring such transfers within DOTAS, but will make some changes to its implementation as a result of the consultation. The necessary regulations, taking into account those changes, will come into effect on 6 April 2011.
E-Communications (Mutual Sector)
(13 years, 5 months ago)
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The Financial Secretary to the Treasury (Mr Mark Hoban)
The Government are committed to fostering diversity in financial services, promoting mutuals and creating a more competitive banking industry. Much of the legislation applying to mutuals has existed for a long time and an up-to-date legislative framework is a pre-requisite to a successful mutual sector.
Mutual societies are under a number of statutory obligations to communicate with their members or the public in the conduct of their business. Today the Government published a consultation document that proposes to amend legislation that will facilitate the use of electronic communications, such as e-mail, by the mutual sector to discharge these statutory obligations and allow mutuals to reduce their administrative costs.
The deadline for responses to the consultation is Friday 28 January 2011 and electronic copies of the consultation document, which includes the draft statutory instruments, will be deposited to the Libraries of both Houses of Parliament.
National Broadband Strategy
(13 years, 5 months ago)
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The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt)
I am pleased to announce that I will be publishing a national broadband strategy today. The strategy sets out how the Government plan to deliver their ambition to have the best superfast broadband network in Europe by 2015 and build on the commitments I made in my statement to the House on 8 June 2010.
A first class broadband infrastructure is essential for creating jobs, opportunities and economic growth in the digital age. Our country needs a reliable and secure broadband capability that encourages innovation and creativity, supports the year-on-year growth of our digital industries—now worth £130 billion or 10% of gross added value, and meets the growing demands of its 40 million users.
To that end, I was delighted to secure an unprecedented £830 million of public investment for broadband as part of the recent TV licence fee agreement.
The strategy published today will outline how Broadband Delivery UK (BDUK) will use the £530 million available in this spending review period to support broadband and stimulate further private sector investment. It sets out the goal of delivering a fibre point in every community in the UK by the end of this Parliament, bringing superfast broadband within reach of communities urban and rural, and commits to ensuring that homes and businesses right across the UK are able to access a decent level of connectivity, even in the most remote areas.
The strategy includes:
a mixed-technology approach with fixed, wireless and satellite all having a role. It is recognised that one technology is not suitable for all circumstances, although high capacity fibre optic is likely to be a key feature of the UK’s network;
ensuring access to existing infrastructure, including BT’s network of ducts and poles and encouraging owners of other networks to develop new revenue streams through selling access to their infrastructure;
new guidance prepared in conjunction with the British Standards Institution and Building Research Establishment to builders and contractors on how to ensure new buildings are broadband-ready in the form of a publicly available specification (PAS 2016);
a commitment to the liberalisation of the 800MHz and 2.6GHz spectrum, to allow the development of next generation mobile services; and
working with local authorities to clarify existing guidance on streetworks and micro-trenching with the aim of reducing the cost of broadband roll-out.
I will also be announcing my proposal to use £50 million of the £530 million allocated in the spending review to support a further wave of rural projects in addition to the projects already announced in the Highlands and Islands of Scotland, Cumbria, Herefordshire and North Yorkshire.
A copy of the strategy and a full copy of my speech will be deposited in the Libraries of both Houses.
Children's Commissioner Review
(13 years, 5 months ago)
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The Minister of State, Department for Education (Sarah Teather)
This Government are a proud signatory of the United Nations Convention of the Rights of the Child (UNCRC), are committed to its implementation, and believe it is vital that children and young people have a strong, independent advocate to champion their interests and views and promote their rights. That is why on 12 July this year the Secretary of State for Education invited Dr John Dunford to undertake an independent review of the Children’s Commissioner for England. Today the Government publish his report and recommendations, which I welcome. I know this is an issue of great interest to many parliamentarians, and I have placed a copy of the report in the House Library.
In summary, Dr Dunford has concluded that there is a need for a Children’s Commissioner if Government are to meet their commitment to implement the UNCRC. He recommends a strengthened remit to promote and protect children’s rights, with the role incorporating the responsibilities of the children’s rights director at the Office for Standards in Education, Children’s Services and Skills (Ofsted) and also being able to assess the impact of new Government policies on children’s rights. Dr Dunford recommends greater independence, with the commissioner submitting an annual report, and any other reports, direct to Parliament as well as to Government, rather than reports being submitted to Parliament through the Secretary of State for Education, as at present. It will be for Parliament to determine how else it would like to engage with the new Children’s Commissioner. The full implications of Dr Dunford’s recommendations will take some months to work through, but the Secretary of State and I are pleased to accept them now in principle and will consult in due course on legislative changes.
Dr Dunford was asked to consider the commissioner’s powers, remit and functions, the relationship with other Government funded organisations carrying out related functions and value for money. He has carried out a thorough review of the evidence, for which I am grateful. His call for evidence attracted over 200 responses from adult organisations and individuals and over 700 responses from children and young people. He has held extensive discussions with organisations that work with and for children and young people, MPs and peers, and the children’s rights director’s office. He has also visited the Children’s Commissioners in all four countries of the UK and Ireland, and commissioned an academic review of the international evidence.
The conclusions that Dr Dunford has drawn are powerful. His review makes a convincing argument for the need for a Children’s Commissioner, and I accept that without one there would be significant implications for children’s lives and for the UK’s international standing. Dr Dunford has assessed whether the role of the Children’s Commissioner meets the Cabinet Office tests against which all arm’s length bodies have been reviewed, and I accept his view that it does so.
I have noted that despite some achievements on specific issues, the impact of the Office of the Children’s Commissioner to date shows a clear need to reform its remit and operating model. I accept Dr Dunford’s proposals that the role should be in accordance with the United Nation’s Paris Principles for Human Rights organisations, with responsibility for promoting and protecting children’s rights on the basis of the UNCRC, and reporting directly to Parliament as well as to the Department for Education. I also agree with Dr Dunford that within these rights lies the responsibility for children to respect the rights of others, and that this should better enable children to act as young citizens and reinforces the proper exercise of authority by parents and other adults such as teachers.
The Secretary of State is clear that the Children’s Commissioner must represent value for money in exercising its powers and functions, and Dr Dunford has identified opportunities in this regard. While accepting that the commissioner needs to be adequately resourced to fulfil the role, I believe that all public funding should be used in accordance with the Cabinet Office’s efficiency guidelines for arm’s length bodies, and that this need not compromise independence or statutory powers and duties. Dr Dunford recommends merging the functions of the Office of the Children’s Commissioner with the children’s rights director in Ofsted, providing the opportunity for greater coherence and impact, and scope for savings. I believe that this is a sensible way forward, and will be discussing next steps with Her Majesty’s chief inspector. Dr Dunford has also identified that the salary of the Children’s Commissioner is excessive in comparison to others in similar roles and I will address this in setting up the new arrangements.
Dr Dunford’s recommendations mean that the statutory basis and form of the Office of the Children’s Commissioner must change. I will consult in due course on legislative changes. In the interim, the current role and functions of the Children’s Commissioner will continue. This includes the commissioner’s remit over non-devolved matters impacting on children and young people in Northern Ireland, Scotland and Wales. I do understand the difficulties that the current position presents for the Children’s Commissioners in the devolved Administrations. I will want to work with them to achieve a situation, within the devolution settlements, where the interests of children in Scotland, Wales or Northern Ireland can be fully represented by the commissioner for that jurisdiction.
While it will take some time for any legislative changes to take effect, I am determined to act in the spirit of Dr Dunford’s recommendations as soon as possible. The Secretary of State does not intend to use his current power to direct the Children’s Commissioner to undertake an inquiry, and while the current legislation will still mean that the commissioner needs to consult him prior to undertaking an inquiry, the Secretary of State will be happy to offer his views but will not expect to have any role in how the commissioner then decides to proceed.
Dr Dunford recommends that a reshaped Children’s Commissioner for England holds Government to account against the UNCRC. I agree with Dr Dunford that for this to deliver benefits to children, Government and policy makers must be receptive to that approach and advice. I can therefore make a clear commitment that the Government will give due consideration to the UNCRC articles when making new policy and legislation. In doing so, we will always consider the UN Committee on the Rights of the Child’s recommendations but recognise that, like other state signatories, the UK Government and the UN committee may at times disagree on what compliance with certain articles entails.
In conclusion, Dr Dunford’s recommendations should result in a Children’s Commissioner that has greater profile and credibility, and can better impact on children’s lives. At the centre of this coalition Government’s thinking is a determination to see children and young people achieve to their full potential, and the desire to empower individuals to shape their own future. I believe that reinforcing our commitment to children’s rights, and creating a stronger independent advocate for those rights, is an important part of delivering on that ambition.
Childhood (Commercialisation and Sexualisation)
(13 years, 5 months ago)
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The Minister of State, Department for Education (Sarah Teather)
I am announcing today an independent review of the commercialisation and sexualisation of childhood.
Parents express real concern about children being pressured into growing up too quickly, to become consumers or sexualised adults earlier than is appropriate. The Government have therefore made a commitment to take action to protect children from excessive commercialisation and premature sexualisation.
I have asked Mr Reg Bailey, chief executive of the Mothers’ Union, to conduct an independent review of the issue and to make a full report with recommendations in May 2011. I should like the review to take a wide-ranging and independent examination of the evidence and provide recommendations that identify measures that will result in businesses collectively and individually changing their behaviour and which empower consumers to voice their concerns more effectively. To that end, I have asked Mr Bailey to consider the views of both consumers, particularly parents but also children themselves, and the business community; as well as drawing on the expertise of existing regulators and other experts in the field.
In undertaking his review, I have also asked Mr Bailey to build on the previous reviews conducted by Professor David Buckingham on the impact of the commercial world on children’s wellbeing, by Dr Linda Papadopoulos on the sexualisation of young people, and by Professor Tanya Byron on child safety in a digital world. I have asked Mr Bailey to examine the evidence in these reviews and more recent research and to produce robust and challenging recommendations for Government to consider in the following areas:
Risks of harm of commercialisation and sexualisation and barriers to parenting;
Principles (what is acceptable in this area and what is not);
Consumer voice; and
Corporate social responsibility relating to children.
Copies of the Minister of State for Children and Families’ letter asking Mr Bailey to carry out the review will be placed in the Libraries of both Houses.
Ship-to-Ship Transfer Regulations
(13 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Transport (Mike Penning)
I wish to inform the House of the outcome of the review of the Merchant Shipping (Ship-to-Ship Transfers) Regulations 2010.
On 8 July, I announced the review of the regulations and I asked all interested parties to make representations to me by 30 September. On the same day, I also laid a statutory instrument—the Merchant Shipping (Ship-to-Ship Transfer) (Amendment) Regulations 2010—before the House, in order to defer the coming into force date of the regulations from 1 October 2010 until 1 April 2011.
During the period of the review, from 8 July to 30 September inclusive, I received 32 written representations and held three meetings with interested parties at their request.
In considering these representations, I have been left in no doubt that this is an important issue—not only for the shipping companies who benefit from these practices, but equally for local residents who have concerns about the potential impact of any accident on their coastline. In deciding how best to proceed, it has been necessary to strike a balance between ensuring that these operations are properly regulated, while recognising the benefits of ship-to-ship transfer.
On the basis of the written representations and the points made to me in meetings conducted in the context of the review, I have drawn the following conclusions:
I intend to change the policy on ship-to-ship transfers outside harbour authority areas. Instead of a general prohibition, there will be a regime which will:
restrict ship-to-ship transfers outside harbour authority areas to a single designated area within the UK territorial sea;
establish a system of permits issued by the MCA; and
give effect at the same time to the new chapter 8 of annex I to the MARPOL convention.
I intend to maintain, without change, the policy of requiring oil transfer licences for harbour authorities. Harbour authorities which already have a history of hosting ship-to- ship transfers will, of course, continue to benefit from transitional arrangements.
I shall also take account, in reshaping the policy, of some specific instances where a type of ship or a type of activity needs to be treated in a way which departs from the general rules, or where the application of the rules needs to be adjusted to allow normal harbour activities to continue unhindered.
The Department’s officials will now proceed to draft the necessary amending legislation, on the basis which I have described. I shall be taking a keen interest in the progress which they make.
I will be placing an analytical table, which summarises the points of substance made in the written representations and the meetings held with interested parties, on the Department’s website and in the Libraries of both Houses.
Disability Living Allowance Reform
(13 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)
I am publishing today “Disability Living Allowance reform”, a formal public consultation on our proposed reforms to disability living allowance (DLA).
We are already undertaking large-scale reform of the welfare system, for example the universal credit and our flagship Work programme. Our welfare reforms are designed to protect people in the most vulnerable situations, including disabled people. We remain steadfast in our support for the principles of DLA, as a non-means-tested cash benefit contributing to the extra costs incurred by disabled people.
However, DLA has not been fundamentally reformed since it was introduced in 1992. We now have a disability benefit which is confusing for individuals to understand, based on unclear criteria and often results in inconsistent awards, and since 1992, both the case load and the cost of DLA have grown to a level that is unsustainable. Changes to DLA are long overdue and must address questions of fairness and value, while supporting disabled people to lead independent lives. We must ensure DLA better reflects the needs of disabled people today, rather than in the 1990s, and that it enables support to be targeted to those with the greatest need.
This is why I want to bring disability benefits into the 21st century by replacing DLA with a new benefit—personal independence payment. This is an opportunity to improve the support for disabled people and enable them to lead full, active and independent lives. Personal independence payment will maintain the key principles of DLA, but it will be delivered in a fairer, more consistent and sustainable manner. It is only right that support should be targeted at those disabled people who face the greatest challenges to leading independent lives and this reform is required to enable that, along with a clearer assessment process.
The consultation document sets out our proposals and seeks responses from disabled people and disability organisations. The document covers:
The need for reform, including the rising case load and expenditure and what we believe is wrong with the current benefit;
Our proposals for reform including the new objective assessment, taking into account aids and adaptations, eligibility criteria, the treatment of children and over 65s, and signposting claimants to support to help them manage their condition; and
How we envisage the benefit being delivered, including the benefit’s role as a passport to other support and integration with other support, such as adult social care.
We welcome views from across Great Britain on the DLA proposals, conceived within the framework of a 21st century welfare system that is efficient, effective and above all fair.
Copies of the consultation paper are available in the Vote Office, and will be available shortly at http://www.official-documents.gov.uk/menu/cmd2010.htm.
The consultation period will be from 6 December to 14 February 2011. I will make a further statement regarding the response shortly after the consultation period ends.
Social Fund Budgeting Loans
(13 years, 5 months ago)
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The Minister of State, Department for Work and Pensions (Steve Webb)
The social fund helps people to meet additional costs they may find it difficult to budget for. This is especially true when people on the lowest incomes are facing difficult and expensive times in their lives such as having a child or paying for a relative’s funeral.
This is why, in the forthcoming Welfare Reform Bill, we will introduce legislation to make social fund budgeting loans available to help families to buy maternity items or items for a new baby or to help them towards meeting some of the costs of a relative’s funeral. This help will be available in addition to the Sure Start maternity grant and the social fund funeral payment from late next year.
Grand Committee
(13 years, 5 months ago)
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Budget Responsibility and National Audit Bill [HL]
(13 years, 5 months ago)
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The Deputy Chairman of Committees (Lord Colwyn)
My Lords, I have the usual announcement to start with: if there is a Division in the Chamber while we are sitting, the Committee will adjourn for 10 minutes.
Clause 4 : Main duty of Office
Amendment 20
Lord Eatwell
“( ) In fulfilling its duty imposed by subsection (1), the Office must assess and report on the risks to the public finances.”
Lord Eatwell
My Lords, before moving on to Amendment 20, I shall make a couple of general remarks about how we have done so far. All sides want, I think, to make the Bill a success. That is not really a matter of political dispute. The Committee has already unearthed some serious failings in drafting. For example, on fiscal policy, the OBR is supposed not to regard a critique of economic policy as within its remit, but on the issue of judging the sustainability of fiscal policy the context of general economic policy is within its remit. What is it to do? Is it one way or the other?
Then there is the question of Clause 5(3)—the clause with the inverse meaning, as I think of it now. Everybody thought that it was designed to prevent something from being done, but then we discovered to our amazement that it is all about what has to be taken into account. This sort of obscurantist drafting gives the law a bad name. There were also the statements in the charter, notably the reference to “intergenerational fairness”, over which we have the grave suspicion that the person who drafted the phrase had not the faintest idea what it meant.
Yet none of these is a political issue. None of them really merits the instruction, “Resist”. All of them are items to debate and to correct. This is a fine example of why technical Bills such as this should go to pre-legislative scrutiny. Be that as it may, my message to the Minister and to the anxious officials behind him is: “Loosen up”. Let us use this Grand Committee for the constructive purpose that it was intended to have and try to do what we all want, which is to ensure that this Bill works, works well and works for the long term.
With respect to Amendment 20, the OBR has made a major step forward in recognising the uncertainty around the probabilistic nature of economic forecasting —and quite right, too. However, this has clearly not yet penetrated the thinking of government Ministers. In the Chancellor’s Statement last Monday, he boldly declared that the OBR had ruled out the possibility of a double-dip recession, when in fact it had done nothing of the kind. The OBR suggested that there was a 50:50 chance that the growth rate would be 2.1 per cent next year but that, at the same time, there was a significant chance of between 10 per cent and 20 per cent that growth would be zero—that is, that there would be a double dip.
However, while the assessment and presentation of the uncertainty of forecasts have been greatly improved, no progress has yet been made on the other risks embodied in the Government’s overall fiscal position. For example, it is now clear that for the last decade—and I recognise that this was under the previous Government—tax revenues have been overly dependent on taxation of financial services. The severe problems in financial services contributed disproportionately to the fall in government revenues and to the growth of the deficit. This, which is a sort of all-eggs-in-one-basket problem, is a standard feature of corporate risk analysis and could, with value, be introduced into the analysis of public policy as well. Similarly, everyone is now aware that the UK economy has become seriously unbalanced, which is just the sort of issue that would be highlighted by regular and careful risk analysis. If the OBR were to extend its analysis of uncertainty to include a risk-sensitive analysis of the public finances, it would provide a complementary and extremely valuable service to policy-makers and align public policy-making with the best practice in private policy-making and private risk assessment.
Chapter 4.10.1 of the charter relates risks only to,
“risks surrounding the economic outlook”,
but associates the economic outlook only with the forecast, not with the state of the economy as it is. This amendment focuses attention on a wider concept of risk—the risk inherent in the underlying parameters of the fiscal and economic stance—and, by doing so, extends risk analysis into the areas of best practice that are now found in the private sector. I beg to move.
The Commercial Secretary to the Treasury (Lord Sassoon)
My Lords, I am happy to start by saying that I agree that we should, as far as possible, stick to the technical. I am grateful to the noble Lord, Lord Eatwell, for confirming that he would like to make this a technical analysis of the Bill.
I agree that it is critical for the OBR to assess the risk to the public finances and that that should be clearly set out. The amendment proposes that this provision should be in the Bill, whereas we propose that it should be in the charter, first focusing on the economic risks and secondly focusing on the fiscal risks. As the noble Lord said, there are references to risks in chapters 4.10.1 and 4.10.2 of the draft charter: the first relates to the economic forecast and the second relates to the forecasting of the public finances. I believe that together those two references to risk give the OBR a clear and wide-ranging remit. I will think about the specific drafting in the light of the points that the noble Lord has made, but I believe that the charter is the right place for this. Clearly, the drafting on the sorts of risks that the OBR looks at should not in any way constrain it from looking at the relevant risks, so I will have a look to make sure that, on reflection, we have got all the risks covered.
The OBR has, of course, a duty to act consistently with the charter, so it should not be necessary to include this provision in the Bill. However, we must get it right in the charter, which is where I think we should leave it. I ask the noble Lord to withdraw the amendment.
Lord Eatwell
Gosh, that was quite a loosening up. I think that the noble Lord has taken the point. In my reading, the charter seems to confine risk analysis to the probabilistic analysis of forecasts—to the fan charts and so on. I want to stimulate the OBR to think about the risks inherent in the economic posture, if we may call it that, of the country at any one time. On the two illustrations that I gave, I think that if forecasters, particularly official forecasters, had been sensitive over the last decade to the excessive share of taxation coming from the financial services and had realised the risk of having all one’s eggs in one basket or had been sensitive to the problems associated with the overall balance of the economy, which I know the Government wish to address, we might have had some danger signals hoisted earlier than they were. However, in the context of the Minister’s assurance that he will look at this issue and perhaps amend the charter accordingly, I beg leave to withdraw the amendment.
Lord Higgins
“( ) The Office must publish with its forecasts the assumptions on which they have been based.”
Lord Higgins
My Lords, it should be convenient, as has been suggested, that we discuss Amendments 26 and 39 at the same time. This is an important aspect. We are going into a situation where the Government have an official forecast, but a great many other forecasts will be produced at the same time. The helpful document produced by the Treasury, Forecasts for the UK Economy, shows just how many other independent forecasts there are, but the OBR one will clearly have a particular and unique importance. If it is going to be compared with forecasts by other forecasters, we need to know the assumptions on which the official forecast is based, because we all know that the assumptions that are made essentially determine the outcome of the forecast.
I realise that the charter also refers to the assumptions being spelt out but it seemed more convenient in this instance to put that into the Bill. Indeed, I am inclined to think that this is so important that it ought to be in the Bill rather than in the charter. There seems to be general agreement in the draft charter that this should be so, but, I am not clear where these assumptions appear in the first example that we have been given of an OBR report, Economic and Fiscal Outlook—November 2010. It would be helpful if we were told exactly where the Government believe that these assumptions are being spelt out.
The other amendments also relate to what one might in simple terms describe as the “model”. In this context, I am not clear precisely what model is being used. The Treasury had a model, of course, which was published and was used by various outside organisations, including the so-called ITEM group. Are we to understand that the OBR forecast will totally replace the Treasury forecast that used to appear in the Red Book? If so, is the OBR none the less going to use the same model that the Treasury used, or does it have a model of its own? In either case, it would be helpful if my noble friend could place in the Library, or publicise more widely, exactly which individual model is being used; we would then have a better basis for comparing it. Are we also to understand that if the Treasury model disappears, the ITEM group—for the benefit of Hansard, I should point that it is spelt out in capital letters rather than just being referred to as the “item group”—will go on using the Treasury model, or will there be a replacement?
I agree with the opening remarks of the noble Lord, Lord Eatwell, about the importance of getting the technical aspect of these matters straight. The technical arguments are important if the OBR’s forecasts are to have the credibility that they ought to. I would be grateful if my noble friend could respond to those simple points so that we understand where we are going in the future. Perhaps he might point out to me where the assumptions are specified in the November document that was the first example of the OBR’s work.
Lord Eatwell
My Lords, my noble friend Lord Peston suggested to me that I should follow the introduction of this group of amendments by the noble Lord, Lord Higgins, by speaking now to Amendment 39. As noble Lords will be aware, this is simply an alternative means of achieving the objective that the noble Lord, Lord Higgins, seeks.
One of the most important aspects of any piece of serious economic analysis is that it should be capable of being replicated. If the OBR’s forecasts are to achieve the status that we on this side and, I presume, the Government hope for them, they must be capable of being replicated. This can be done only if full information is available at the time of publication.
The issue of replication is typically associated with the natural sciences, where replication of experiments is a fundamental requirement of any empirical scientific statement. However, the Minister may be unaware that it is now standard practice for any article published in a leading applied economics journal to provide the electronic address at which the data and other relevant information required to replicate the results in the article are available. In these days of large datasets and complex econometric models, data accessibility is critical to effective peer review—even effective assessment of whether any analysis or forecast should be taken seriously.
Amendment 39, in my name and the names of my noble friends Lord Davies and Lord Myners, will ensure that effective appraisal of OBR forecasts and other economic analyses are possible. As is made clear in the preface to the OBR report that we discussed last week, compiling the fiscal forecast requires detailed information from many government departments. That is why our amendment refers not only to data and methods but to costings, which the OBR are required by the charter to confirm. In other words, all the raw materials on the basis of which judgments have been made and forecasts have been constructed should be available for objective assessments of those forecasts to be made. This will not involve any significant extra burden on the staff of the OBR, since the data and costings must already have been assembled in electronic form for the OBR to do its work.
The noble Lord, Lord Higgins, raised an interesting point about the model that might be used by the OBR. We have been told that the Treasury will retain its own forecasting unit. We would like to know whether the forecasting model to be used by this unit is to be the same as the model used by the OBR, in which case any differences in forecasts would simply be matters of judgment. That would surely be a ridiculous duplication. It would be much better to develop alternative perspectives, since they can often throw fresh light on difficult problems.
In supporting the general line that the noble Lord, Lord Higgins, has taken, I simply add that we want to be in a position where serious researchers can replicate the approach and findings of the OBR in order to be able to evaluate them effectively.
Lord Peston
My Lords, noble Lords will be aware from my remarks last time in Committee that I would not have set up an OBR. I regard it as a waste of public money, to be perfectly honest, but I entirely accept that we are going to have an OBR, since the Government have a majority in the other place and in practice seem to have a majority in your Lordships’ House. Therefore, I entirely agree with my noble friend Lord Eatwell that, if we are going to have such a body, we might as well make it a better one, rather than a worse one. Therefore, we have a duty to scrutinise the proposed legislation and come up with a variety of suggestions, in the hope of persuading the Minister that we could make a better fist of it than the Government have done so far. There I echo the remarks of my noble friend.
On this group of amendments, I repeat something that I said last week. The OBR’s November economic and fiscal outlook report produced a series of forecasts that are not based on any recognisable or explicitly stated economic theory. This is forecasting without theory, which is slightly different from forecasting without a model, although the two are connected.
I have found it difficult to discover from the economic and fiscal outlook report what assumptions the OBR has made—and, presumably, will continue to make—about the way in which the economy works. The central issue as far as serious economics is concerned is whether it is assuming that the economy is a self-adjusting mechanism that will come to a full employment equilibrium—the kind of assumption that what I regard as obsolete economics used to make—or whether it is taking for granted, first, that the economy will not come to an equilibrium at all or, secondly, that there are multi-equilibriums and it does not know where the economy is going to go. Whatever the case, many believe that, wherever it settles, it is most unlikely to settle at anywhere recognisable as a place of full employment.
On a related matter about the facts and how seriously we should take the OBR forecasts as they are now, we have available, as the noble Lord, Lord Higgins, pointed out, the immensely helpful survey published by the Treasury of all the independent forecasts, to which I shall refer further on Report. I have analysed the independent forecasts statistically and it is interesting to note that, given the averages, standard deviations and the other statistical criteria, the forecasts of the OBR and the independent forecasters for 2010 and 2011 are much in step. However, it is extraordinarily interesting to note that the OBR forecast for 2012—that GDP will grow at 2.6 per cent per annum and will continue to grow at that kind of rate—is remarkably optimistic compared with the forecasts of the independent forecasters; it is statistically significantly different. The OBR has not discussed this matter, nor have outside commentators, but your Lordships—we shall return to this issue on Report—have to ask how the OBR has come up with this optimistic view.
There was a time when the Conservative Party believed in the free market—those days seem long gone—and would have taken it for granted that, as the independent forecasters overwhelmingly are in the business of making money from accurate forecasting, they have a tremendous incentive to forecast accurately. Therefore, if one had a choice, one’s normal inclination would be to say, “If you believe in the free market, you will choose the free market forecasts as opposed to the OBR’s forecasts”. We shall return later to the significant issue of the optimistic OBR forecast for 2012 against the rather more pessimistic forecasts of the independent forecasters.
There may be two good explanations for the difference: first, many of the independent forecasters do not look that far ahead and we may have a biased sample of what we get from the Treasury; and, secondly, the OBR may have more information—for example, it may be better advised on government policy—than the independent forecasters. I am not saying that necessarily the OBR is mistaken; I am saying that the difference is, from any analytical and statistical point of view, noteworthy.
Lord Myners
My Lords, I, too, speak in favour of the amendment tabled by the noble Lord, Lord Higgins. Unlike my noble friend Lord Peston, I am in favour of the OBR. However, I share with my noble friend some anxieties about whether we need another set of economic forecasts. We should warrant another set of forecasts, in particular if the Treasury is going to produce its own, only if those from the OBR prove to be better and more accurate than those produced by commercial forecasters and other bodies. Therefore, it is important that we are able to analyse the forecasts made by the OBR, in order to understand the logic behind them and the assumptions that have been employed. That can best be done—and the veracity, standing and confidence that we wish to have in the OBR supported—if the model used by the OBR is freely available for analysis by peers, commentators and parliamentarians.
I have one question for the Minister. He has advised us that HMT will continue to produce its own economic forecasts. However, he has criticised HMT’s forecasts on the grounds of their accuracy and the spin placed on them by politicians. If he believes that HMT was leant on by politicians, it would be interesting to hear some examples, because during my 18 months in government I saw no evidence of Treasury forecasts underlying government policy being influenced in any way by politicians. The Minister has also criticised the amount of content of HMT’s published forecasts, including the fact that HMT did not publish forecasts for unemployment. Will he confirm that in future HMT will publish a full and comprehensive set of its own economic forecasts, which will in particular include forecasts for employment and unemployment?
Lord Sassoon
My Lords, this discussion has been interesting because it confirms how much material the OBR has already published, in its economic and fiscal outlook and alongside it, which enables us to have a richer discussion than we might ever have had in the past. I am grateful that the noble Lord, Lord Peston, is nodding. We have made considerable strides. I do not want to rake over old ground, as the noble Lord, Lord Myners, provokes me into doing, but we must keep coming back to the point that he makes by implication—namely, that we have employment and other forecasts in the 150-page economic and fiscal outlook document. We have many pieces of data that we did not have before and we will continue to have them in future.
I hope that we all agree that there is a huge amount of additional transparency. We have fan charts and all sorts of other things that make clear the basis on which the forecasts have been produced. These forecasts are in no way made or influenced by Ministers or their political advisers. I think that we all agree that transparency is at the root of what we are trying to achieve.
The amendments in this group seek to ensure that the OBR publishes the assumptions, economic analysis, data, methods and costings that it uses to compile its reports. We believe that that is absolutely achieved in the design of the structure that we have put forward. The OBR will have a statutory duty to act transparently. Chapter 4.8 of the charter states that,
“the OBR is to act openly, setting out with clarity the assumptions and judgements that underpin its work. It should proactively seek to make available its analysis”.
Thus the general duty is in the Bill, which is backed up by the wording of the charter that expands on it.
We now have evidence from last Monday’s document and the surrounding publications of the OBR about how it will do this in practice. Perhaps noble Lords have looked at the 20 Excel spreadsheets on the OBR’s website. I suggest that these give convenient access to the forecast data in a way that has not remotely been done before. In addition to those spreadsheets, over 20 separate documents with supplementary information have been published by the OBR since August.
One of the tests of whether this meets the legitimate demands of the most sophisticated external forecasting bodies is what the Institute for Fiscal Studies noted earlier this year, which is that the OBR had by that stage already published more detail than ever before on the assumptions underlying its forecasts and on the impact that changes in those assumptions would have on revenues and spending. We have made a significant step change. A lot of the information is available in electronic form. The construct of the Bill plus the charter achieves what we all want from this.
I turn to the specific points raised, particularly by my noble friend. The OBR has complete discretion over the model that it uses and what methods go around the modelling. In its recent economic and fiscal outlook report, the OBR had already made some adjustments to the methods that it used in June, so it is moving the way in which it has adopted the Treasury model. The Treasury will continue to retain economic and fiscal forecasting expertise because ultimately Ministers need to be supported by a forecasting capability. That will include the possibility of the Treasury continuing to use its own model, but the official forecasts will be those of the OBR.
Baroness Browning
Will my noble friend confirm that, in the event of the Treasury not using the OBR’s forecast, it will give a full explanation of why it differed from the office’s views?
Lord Sassoon
Yes, I can confirm that, although that is not in any way the expectation.
On the specific question of the ITEM Club and the model, the club will no longer have a statutory right to be given a copy of the Treasury model because that arose from the Industry Act 1975, which is being repealed. It will be for the Treasury to consider whether it continues to make the model available, but that will not be a statutory matter any more.
On how the arrangements between the OBR, the Treasury and other parts of government work, that will be set out in the memorandum of understanding, including use of the Treasury economic model, although of course it is entirely at the discretion of the OBR as to what tools, models and methods it uses.
On the question of where the assumptions are to be found, I can certainly find them littered throughout the document published last week, including, for example, table 3.6 on page 67, which as I read it is a mixture of inputs and outputs. There are other assumptions made right through the document.
On the critical question of the approach to economic forecasting raised by the noble Lord, Lord Peston, that is summarised in paragraph 3.7 on page 28. I am glad that people find the Treasury monthly report on the latest independent forecasts useful. It is intended that the Treasury will continue to publish that document and make it available on the Treasury website.
I think that the construct between the Bill and the charter covers all the issues on transparency, something that we all seek, and I suggest that the evidence so far of the OBR in practice means that we should have confidence in that construct. On that basis, I ask my noble friend to withdraw his amendment.
Lord Eatwell
I agree with the noble Lord that the amount of information that is published has increased, to general benefit. I spent a few happy hours over the weekend playing with the Excel spreadsheets on the OBR website and plugging them in to a model that I use to think about the economy. I found some interesting inconsistencies and will write to Mr Chote about them.
The point that has come up several times in our discussions concerns the balance between the Bill and the charter. The charter can be changed readily, as it is not primary legislation. We must give careful consideration to whether, for example, transparency as defined in the charter gives a sufficiently strong underpinning to the need to reveal information, or whether statements such as those in the amendment proposed by the noble Lord, Lord Higgins, or in those proposed by me and my noble friends, should be in the Bill. This has come up several times. It is an issue that we should take away and consider carefully before Report. Where should we strike the balance between an explanatory charter that gives guidance to the OBR and the statutory requirements? I do not have a firm opinion. However, on this issue I lean toward the idea that it should be in the Bill rather than in content that could later be amended. Of course, it would have to be put before Parliament—we know the charter procedure—but it can be changed. If we really care about this, perhaps we should put it in a form that cannot later be changed. This is a matter for future consideration.
Lord Higgins
My Lords, we are grateful to the Minister, who has clarified a number of points. I will come back to an obvious and fundamental one. I am still not in the least clear why we will have both an OBR forecast and an official one from the Treasury that will be useful for Ministers. I simply do not understand this.
Lord Sassoon
Perhaps I may clarify that. There will be one official forecast, which the OBR will produce. The Treasury will retain a modelling and forecasting capability, but it is absolutely not the intention, and will not be the case, that there will be another official forecast from the Treasury. Ministers simply require the Treasury to retain that capability, so that if, in circumstances that we do not at all anticipate, the Chancellor or the Treasury want to take a different view from that of the OBR, they will retain the capability of doing so. There is absolutely no intention that there should be anything other than one published forecast, which will be put out by the OBR.
Lord Eatwell
I do not quite follow that. If the Treasury is going to disagree, or at least have the capability of disagreeing, with a forecast put forward by the OBR, how can it do that other than on the basis of a forecast of its own? I note that the word “published” was slipped into the Minister’s final sentence. Surely if the Treasury is going to have the capability of assessing and disagreeing with the OBR model, it must have some forecast of its own.
Lord Myners
Perhaps I, too, may make a comment. I took the Minister’s reply to the question asked by the noble Baroness, Lady Browning, about situations where there is a difference between HMT’s forecast and the OBR’s forecast as confirming that the Treasury will be clear about the fact that its own forecast was different and that its policy decisions were informed by its own forecast rather than by that of the OBR.
Lord Higgins
I find this rather difficult. The Minister raises his eyebrows. I simply do not understand what the purpose of this forecast is going to be. Perhaps I may expand on that for a moment. We had an official forecast and we presume that the Government will operate on that basis, but apparently there is to be an internal forecast on which Ministers will base their decisions. The noble Lord is shaking his head.
Lord Sassoon
My Lords, there will not be another official internal forecast. There will be the forecast of the OBR, but that does not mean that the Treasury should not have the capability to—and it will—look at underlying assumptions on which the forecast is based, to make sure that it understands where the OBR is coming from and feels comfortable with it. There will not be some other internal official forecast; there will merely be a capability within the Treasury—and it is important that there should be such a capability—whereby Treasury officials can look at and understand the assumptions on which the OBR’s forecast is made. That will not require, and there is no intention for, the Treasury to produce any separate forecast of its own.
Baroness Browning
My earlier question came from reading the evidence of Professor Wren-Lewis to the Select Committee. He considered that if,
“the Treasury decides that the OBR model is wrong in some sense, I think basically then it is up to the Treasury to decide whether it wants to move to an alternative model or an alternative way of doing things whereby it produces its own forecast and does not rely on the OBR”.
I understand that the Government accepted that when they responded to the Treasury Committee. That was what prompted my earlier question.
Baroness Noakes
Perhaps I may suggest to my noble friend that much of the debate in Committee has been concerned with establishing that the OBR is properly independent of the Treasury. One of the corollaries of having an OBR that is properly independent and that we are all jolly keen to see in a separate building, with staff who are not too intertwined with the Treasury, is that the Treasury will have given away the ability to make some its own appraisals of the economic position. Clearly, it cannot leave itself completely denuded. It would be frankly ludicrous if, in setting up the OBR as a completely independent body to inform the public debate and to be the official forecaster, as my noble friend the Minister has repeatedly said, we left the Treasury with no internal capability to judge for itself whether or not it was happy with what was coming out of the OBR. It would therefore be entirely logical for the Treasury to retain some forecasting capability. In extremis, the Treasury may wish to rest its judgments on its internal forecasts, rather than those produced by the independent OBR, but even without those extreme conditions the Treasury will need to be satisfied that what is coming from the OBR is fit for the purpose of decision-making.
Lord Burns
My Lords, perhaps I may add to the point made by the noble Baroness, Lady Noakes. The OBR will produce two forecasts a year. Between them, data will emerge, conditions will change and all kinds of things could happen in the world at large. The Treasury will need to take a view during that period of whether or not the events that are unfolding are consistent with the forecasts. The Treasury will want to prepare for future announcements of one kind or another. It is hugely important that it retains the capacity to monitor what is happening to the economy in the mean time, to make an assessment of whether unfolding events are consistent with the OBR’s previous forecast and to prepare itself for the work that continually goes on. One of my worries throughout the establishment of the OBR has been that some capacity within the Treasury will inevitably be required if the Treasury is to continue to do the job that it does month by month. The Treasury has to prepare Ministers for speeches, answering questions and making observations on whether or not the economy is evolving in the way that it thought. The idea that there should be no capacity left in the Treasury to make this kind of analysis is frankly unrealistic.
Lord Eatwell
My Lords, from our side, the point is not that that capability should not be there, as it clearly should be. However, confusion was introduced into the discussion by references to a Treasury model and forecasts, which puzzled us all, as opposed to having a capacity to critique and develop the modelling of the OBR.
Lord Higgins
My Lords, I understand the argument of the noble Lord, Lord Burns, and I should like to think further about what has been said on this issue.
Perhaps I may raise a further point in relation to the model. Over the past 80 or 90 years, we have had a huge difference of view as to whether one should adopt a Keynesian or a monetarist approach to these problems. My impression is that the OBR now has an essentially Keynesian approach and that the monetary aspect does not appear in the discussion at all, other than to say, “Well, of course, the Bank of England is targeting inflation”, and let it go at that. However, as I have previously pointed out to the noble Lord, Lord Myners, and others, until we got into quantitative easing the Bank was concerned purely about the price of money—the rate of a single rate of interest—rather than the quantity of money.
I am not the least bit clear about the proposal as it now comes here and to what extent the OBR is taking monetary factors into account. Let me illustrate this by giving an example from many years ago. I am delighted to see that the basic approach to economic forecasting on page 28 is to decide on how much excess capacity there is and then to see to what extent aggregate demand gradually increases and absorbs that excess capacity. That was precisely the policy that we adopted in 1970 under the Heath Government. We said then, in the clearest terms, exactly what is being said now on page 28. Unfortunately, this was misinterpreted as a dash for growth and we were absolutely pilloried by those who said that the money supply had been going up very fast. In fact there was a big difference between the money supply, the money supply figures and what was happening to aggregate demand. The point that I am seeking to make is that this does not take into account the effect of quantitative easing, for example, or, if it does, I am not clear where that would appear in these forecasts, although no doubt the Minister can enlighten us.
Given that we are told that the Bank of England is going to make yet a third, quite different, forecast in addition to the, I am almost inclined to say, surreptitious one in the Treasury—I accept fully the point made by the noble Lord, Lord Burns—I am worried that the fiscal and monetary side is not sufficiently integrated in the forecasts.
Lord Myners
Further forecasts on the economy are made in government. I believe that the Department for Business also produces its own economic forecasts. Almost as many forecasts are produced in government as are produced in the private sector.
The noble Lord, Lord Higgins, makes an important point. This might not be the right forum in which to discuss this, but the balance of intent behind the decisions currently being made by the Monetary Policy Committee is more focused on the words that come after “and subject to that” in its remit than on controlling inflation—that is to say that, in an environment in which fiscal policy is reducing demand in the economy, the onus for sustaining demand is coming from monetary policy, with considerable risk, in my judgment, of inflation.
There is no recognition in the Keynesian thinking of this document about the importance of monetary policy. We have what the Americans call a saltwater analysis of economics rather than the freshwater or Chicago school analysis associated with the monetarist view. It will be interesting to hear the Minister’s view on where monetary policy comes into the OBR’s thinking.
Lord Sassoon
I love it when noble Lords preface their remarks by saying, “This may not be the place in which to discuss these things”, and then go into freshwater and saltwater fishing. The noble Lord, Lord Eatwell, has already said that his study of the 20 spreadsheets has raised some questions that he will address directly to Mr Chote. If my noble friend Lord Higgins would like me to relay his questions to Mr Chote, I will be happy to do so—or he may wish to write directly. Either way, I will return to the amendment. We have so much transparency already that it is provoking lots of questions that I am sure Mr Chote and his colleagues will be happy to answer. I will be happy to act as postman if that would be helpful.
Lord Higgins
I gladly accept that offer and beg leave to withdraw the amendment.
Lord Eatwell
Lord Eatwell
My Lords, at Second Reading it was acknowledged on all sides of the House that requiring the OBR to write what was referred to by the noble Baroness, Lady Noakes, as its own school report was not the best way of achieving an objective appraisal of the office’s performance. However well intentioned or even self-critical an organisation might be, it is inevitable that self-assessment embodies a number of allowances, or perhaps things taken for granted that have become embedded in the organisation and are not made explicit, with the result that the sources of any underperformance are not articulated as clearly as they might otherwise be. That is why the provision in the Bill for self-assessment is ultimately unconstructive and even damaging to the reputation of the OBR. Far better to have an external assessment—I will propose a form of external assessment later—that confronts all aspects of the forecasting, such as methods, data, sources, judgments and presentation. The greater credibility and novel insights of such an independent appraisal would enhance both the performance and the reputation of the OBR. The self-assessment procedure is unsatisfactory and it would be a great help if this provision were removed from the Bill by our acceptance of Amendment 23. I beg to move.
Baroness Noakes
My Lords, the noble Lord, Lord Eatwell, has already referred to the fact that I did not support the OBR carrying out an assessment of its own forecasts, as set out in Clause 4. I stick by that view, for the reasons that the noble Lord has given. However, I cannot support his amendment because, without another amendment, it would take out of the Bill a requirement for any assessment of the accuracy of OBR forecasts. I do not understand why the noble Lord has not grouped this amendment with later ones that would set up a peer review committee to perform this function. It would be a retrograde step simply to take out of the Bill a requirement for an analysis of the accuracy of the OBR’s fiscal and economic forecasts. I would rather have an unsatisfactory review than none at all.
Lord Eatwell
I was hoping to provide space for those who feel as strongly as I do, as apparently does the noble Baroness, Lady Noakes, to suggest alternative arrangements. Indeed, I have put forward my own proposals, which we will discuss later, but a variety of methods could be suggested.
Lord Sassoon
My Lords, I, too, am a bit puzzled as to why we are discussing only half the linked story, but my noble friend has it right when she talks about the defective nature of this amendment in taking out the requirement for an assessment of the accuracy of fiscal and economic forecasts. No doubt we shall come to the question of whether there is any other way of doing it later, when I might not be quite so keen on what she has to say. However, I certainly agree with her that it would be inappropriate to remove the requirement for an assessment of the accuracy of the forecasts. It is an important requirement that there should be such an assessment—
Lord Peston
May I interrupt the noble Lord? I am totally puzzled now. The noble Lord uses the word “requirement”. The people who comprise the OBR will not be idiots. They are going to be experts and qualified economists. Quite independent of what is in this Bill, if the forecasting is not working well, they will ask themselves why they got it wrong. There is no need for a requirement here unless you assume that a bunch of morons is going to be appointed to the OBR. If you get a forecast wrong, you immediately ask why you got it wrong. Why is there a need for a requirement to do something that would be a normal way of working?
Baroness Noakes
I suggest to the noble Lord, Lord Peston, that it is not so much the requirement to do the assessment as the requirement to publish it that is important.
Lord Sassoon
My Lords, I am confused by this, because there are certain other things that I would have thought it would be impossible for the OBR to miss out, such as focusing its forecasts on government economic policies. Where there was a strong wish to put certain things into the Bill that were not there, now it is being said that it is blindingly obvious that the OBR would assess its own performance, so no provision is needed. What goes in the Bill and what does not are matters of judgment. It is my view that this is a sufficiently important matter to justify being included. The noble Lord, Lord Peston, will no doubt be comforted by that, because he has already played back to me the fact that the OBR has stated in its document, Analysis of Past Forecasting Performance, that it is,
“fully committed to transparency, and each year will produce a full and detailed report analysing the accuracy of its economy and fiscal forecasts, and explaining the differences between forecast and outturn”.
It goes on to talk about giving further detail on its forecast methodologies. The office is going to do this anyway and I would like to think that it would be done without the Bill requiring it. However, it is sufficiently important that there should be absolutely no doubting the fact that it will be done.
This is not something that of itself is easy to do. The analysis of forecasting requires fiscal forecasting skills that are in scarce supply. To make the assessment requires access to and full understanding of the data. Critical to the whole process is that actually doing the assessment yourself makes it a learning experience. That goes to the heart of why Mr Chote and his team will do it anyway. We certainly expect to see the OBR doing this and the office has said that it will. However, in the Government’s view the requirement should be on the face of the Bill. In the absence of a discussion that we have not yet had about alternative approaches, I suggest that this is where we need to leave it. For the moment, therefore, I ask the noble Lord to withdraw his amendment.
Lord Eatwell
While I agree with the Minister that doing an assessment yourself makes for a learning experience, having someone else do it makes for an even more pointed learning experience. I apologise to the Minister for the fact that he has been forced to speak half-heartedly about this amendment because he has not had the opportunity to discuss Amendments 40 and 43, which cover the issue and which I see as linked. I do not know how the grouping got made up in this way, but there we are. The noble Lord is suggesting that I did it. I can assure the Committee that that does not fall within my skill set.
Lord Eatwell
I thank the noble Baroness, Lady Noakes. It is, as we say, a learning experience.
Lord Higgins
It is very simple. You ring up the Whips Office and say, “I don’t like the way in which it has been divided up”.
Lord Eatwell
I am grateful for the supervision. However, if we look forward, we will be discussing a set of amendments about which I feel very strongly in the context of reinforcing the powers of the OBR. If those amendments are accepted, that would require this amendment also to be accepted. While withdrawing the amendment at this time, I will be intrigued to see how the noble Lord, who will clearly appreciate the wisdom of my future amendments, manages to square accepting them with rejecting this one. In the mean time, I beg leave to withdraw the amendment.
Lord Barnett
Lord Barnett
My Lords, Amendment 25 is in my name and that of my noble friend Lord Peston. Everything that I have heard so far this afternoon in these brief debates confirms to me why my noble friend Lord Peston and I have been right to wonder whether the huge expense of setting up the whole of the OBR is worth it. In particular, this amendment relates to the whole issue and is central to it. Indeed, the only person whom I have heard using the word “audit” in relation to this 150-page OBR report is the Chancellor. He is worth quoting. He said:
“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”.—[Official Report, Commons, 20/10/10; col. 949.]
My experience of auditing is now a bit out of date. Indeed, once you become a major partner in an audit firm, particularly a senior partner, you do not do a lot of actual auditing. Yet I did a little before that and I am bound to say that, when you give a clear audit certificate, there are no exceptions to it. How on earth can you give an audit certificate in relation to the OBR report? The fact is that it is just not possible to give a wholly unqualified audit certificate in relation to the OBR report. Perhaps I might give one or two examples of why it is impossible.
The words “uncertain” and “uncertainty” go right through this report. Quite obviously, I am not blaming the OBR for that. If you are making, as it is, forecasts and assessments, there is bound to be uncertainty. It quite rightly admits that openly. It is not worth quoting all the examples when there are so many of them, but it refers, in the case of the central forecast, to significant uncertainty. Now if, in your report, you have a significant uncertainty that relates to the whole of the report, how on earth can the Chancellor say that everything that it has said is right and that it is all audited? Perhaps the noble Lord, Lord Sassoon, can tell me what it means. It is not clear to me. It is nowhere in the report, but it was at the heart of the Chancellor’s Statement introducing the comprehensive spending review. He said that the OBR had “audited” the annually managed expenditure savings. In fact, the OBR report refers very often to “estimates”. I assume that it will be accepted that you cannot audit an estimate. Page 25 talks about an “equal likelihood” of growth being up or down—it could be all kinds of things. To say that there has been an audit is clearly nonsense. It is done solely to let the public know that this great new independent OBR is giving the Chancellor an overall audit. However, it has not given him an audit, because it cannot. The report states that it is “difficult to draw conclusions”, but the Chancellor says that there has been an audit. The report says that there are “expectations of interest rates”—I wish that the Chancellor would give me some examples of expectations that could be audited; I have never heard of one. I have not come across anybody who can give me a certain forecast of interest rates for tomorrow, let alone for five years, but those “expectations” are central to the forecast, which itself is significantly uncertain.
I worry about Robert Chote, who has taken on the job of chair of the OBR. It is clear that he is an independently minded man who did a great job with the Institute for Fiscal Studies. However, he is allowing the Chancellor to use him. I am very sorry to see it. The Chancellor is using the respected independence of Robert Chote, and now the OBR, to say what a great job he is doing. That is very worrying, because there is a clear danger of the very perception of the independence of the OBR being undermined. I have quoted previously from the foreword to the OBR’s 150-page document, but it is worth doing so again. It states that,
“we have also drawn heavily on the help and expertise of officials across government”.
It then lists the many government departments whose expertise has been used. Despite having asked Questions, I still have not heard from the noble Lord, Lord Sassoon, or from anybody else how often, either formally or informally, the OBR has met the Chancellor and his colleagues. It is not unimportant to know these things. It is all part of the very perception of the OBR. I hope that the noble Lord, Lord Sassoon, will at least see that it is important to accept the amendment, because it goes to the heart of the independence of the OBR, which the Government want to have us believe. I find it hard to believe. I am sorry that the Government are using—I use the word carefully—Robert Chote and his colleagues to give the Chancellor the aura of being right, when it is clear that they cannot do so and are not doing so. I beg to move.
Baroness Noakes
My Lords, the noble Lord, Lord Barnett, has gone a bit over the top in describing Mr Chote and his colleagues as being “used”. The Statement made by my right honourable friend the Chancellor, to which the noble Lord referred, spoke of an audit of the annual managed expenditure savings. It was not an audit of anything other than one part of the totality of the package that my right honourable friend announced last month. The noble Lord has extrapolated from a relatively small use of the word “audit” into something much bigger that is not justified.
I agree, in a sense, that people such as myself, my noble friend the Minister and the noble Lord, Lord Barnett, who have an accounting background, tend to think that the term “audit” is reserved for this statutory audit function, has a very specific meaning and applies only to the audit of financial statements. However, the term means only “independent examination”, and in that sense I do not see any reason why the figure should not be used.
However, I say to the noble Lord that even when considering the audit of annual financial statements, those statements contain loads of assumptions and forecasts. To do an impairment review, you have to forecast cash flows for 10 years and choose discount rates and things such as that to calculate the figure that you put on your balance sheet. For your pension liabilities, you have to do even more complex calculations involving even more assumptions about the future. So even “audit” has to deal with these difficult areas of future estimation, even within the concept of statutory audit.
It would be helpful if the Treasury were to be reminded that the term “audit” has a rather technical meaning; it would be better to say something like “has independently examined”. Perhaps the Minister could take back to the Treasury that its lexicon could have that amendment added. I come back to my basic point, though, that the noble Lord, Lord Barnett, has gone a little over the top on this amendment.
Lord Sassoon
I am grateful to my noble friend for delivering my script for me. Perhaps I should declare my interest as a fellow of the Institute of Chartered Accountants in England and Wales. There is certainly a technical use of the word “audit” that we chartered accountants and other accountants are used to using. As my noble friend Lady Noakes has explained, my right honourable friend was using a more general use of the term. The Chancellor used the phrase in the very specific context of,
“audited all the annually managed expenditure savings”.—[Official Report, Commons, 20/10/10; col. 949.]
To be clear, there is no question of the OBR doing an audit in the sense used by, say, the National Audit Office. In the context in which my right honourable friend used the word “audit”, it is completely clear that he was talking about scrutiny of those particular savings, as set out in the terms of reference given to the OBR when it scrutinised the Government’s policy costings. If the noble Lord, Lord Barnett, wants clarity on the meaning of the word, the terms of reference are clear.
In answer to the questions about the number of contacts between the OBR and the Treasury, that information is now published on its website. Between 4 October and 29 November 2010, there are seven recorded contacts: four e-mails, two meetings and one transmission of a hard-copy document. As I say, all those details are on the OBR’s website for people to look at.
The clarity over the OBR’s role is provided for through the provisions in the Bill and the charter. There is no intention for the OBR to do an audit in the technical sense of the word. I hope that it has been useful to have had this short discussion to clarify that that is indeed the situation and, having agreed that, I do not think that we need to clutter up the Bill in the way that the amendment proposes. On the basis that it is not strictly necessary, I ask the noble Lord if he might withdraw it.
Lord Peston
My Lords, when it suits him, the noble Lord is keen on the casual use of language. Can I take it that “audit” does not now mean audit? Does it mean to scrutinise? Can we see the documentation corresponding to that scrutiny? Is it available?
Lord Sassoon
Indeed, my Lords, as I said, the form of the scrutiny is set out in the terms of reference given to the Office for Budget Responsibility for its review of the spending review and were published as part of the spending review documentation on the Treasury website. If it would help the noble Lord, I can read out the key paragraph of the terms of reference for the Office for Budget Responsibility. Paragraph 4, entitled “Economic and fiscal forecasts”, states:
“The Spending Review will allocate spending between departmental expenditure and annually managed expenditure within the envelope set at the June Budget. As part of the Spending Review, and consistent with the approach taken in the June Budget, the OBR will provide independent scrutiny of the Government’s estimated costing of annually managed expenditure (AME) policies”.
Lord Peston
I am sorry, but I would really like my question to be answered. I do not want to know the form; I want to see the actual scrutiny. Nothing in the big document includes that scrutiny. The Chancellor claimed, using the Minister’s words, that the OBR had scrutinised all these expenditure savings. I should like to see the document which says, “We looked at this and this is our analysis”. I want to see the scrutiny; I do not want to know how the office did it. I want to know that it was actually done. I have not the faintest idea of where to look for this scrutiny, but it is not in the big document—which is what I call it because I cannot remember its name. Where is it?
Lord Sassoon
My Lords, the scrutiny is one of the things that underpin what the noble Lord calls “the big document”. If the OBR had any questions about the AME numbers, it would litter its document with commentary on it. However, it is quite clear from the terms of reference given to the office by the Treasury that it was required to and did scrutinise the AME numbers and was free to make any comments it felt like making on them.
Lord Peston
I would like to see where they are. I know the difference between form and substance, and I would like to see the substance.
Lord Sassoon
I would need to go back to the Treasury website, but I believe that in among all the supplementary documents there is a commentary. That is on the website, but I do not have with me the suite of documents which back up the big document. However, I believe that the material is set out in the supplementary documents. I would be happy to send the noble Lord a reference for where to find it.
Lord Myners
Before we rush away to look for this information on the website, let me say this: the noble Lord is a Minister within the Treasury and shares a floor with the Chancellor of the Exchequer, so no doubt he can give us some sense of how this scrutiny operated. I am trying to imagine in my mind’s eye the 12 or so employees of the OBR scrutinising annually managed expenditure. I am trying to imagine how they would look at the AME of the Department for Culture, Media and Sport, let alone its subdivisions, or the AME of the Department for Work and Pensions. Can the Minister at least give us a flavour of how that work was conducted? That would whet our appetites before we see the full information on the website, as he has assured us we can.
Lord Sassoon
As the noble Lord knows very well, if he would like to ask the question, I will pass it on to Mr Chote and his colleagues who, I am sure, would be happy to answer on how they carried out those parts of their remit. It is for them to say how they carried out their remit, and if the question has not been answered satisfactorily by the information already published on the website, I am sure that they would be happy to respond to further questions. Again, I offer my services as post boy, if the noble Lord would like me to pass on the question.
Lord Myners
I am not sure that the answer is entirely satisfactory. The Chancellor described this as an audit. He went beyond the language used by the OBR. We are asking the Minister of the Crown, based in the Treasury, to give us a sense of how this scrutiny was conducted. I am beginning to feel that the Minister does not know the answer. If that is the case, it would be helpful if he said, “I have no idea how this was scrutinised”, after which the Committee could form its own view.
Baroness Noakes
My Lords, the Opposition are getting overexcited this afternoon. The small phrase in the announcement made by my right honourable friend the Chancellor that there has been an audit of the AME savings is being considerably overinterpreted. As my noble friend suggested, it would be helpful if Mr Robert Chote were asked to say how he conducts this aspect of his work. I am sure that if there are then further questions that noble Lords wish to raise, they will be able to. It would be helpful if my noble friend references any material that is already publicly available. However, it is not reasonable to go beyond that this afternoon.
Lord Eatwell
While agreeing with the noble Baroness, Lady Noakes, I think that there is an important point here. If there is a process of scrutiny that is designed to give us a degree of confidence in the Government's costings and in the forecasts made by the OBR, it would be helpful to know, when the OBR scrutinises the costings by the various departments of their savings, whether it agrees with them 100 per cent. If it does, that would be very disturbing and unfortunate: it would be like an old Soviet election. We would expect a degree of disagreement—perhaps not much, but a bit—which would give us confidence in the scrutiny process. It would be helpful if the Minister would tell us whether in the scrutiny process the agreement was 100 per cent or rather less.
Lord Sassoon
I am grateful to my noble friend for trying to bring this back into perspective. Of course the OBR scrutiny, as the noble Lord, Lord Eatwell, acknowledged just now, will be based on challenging the assumptions underpinning the AME costings. How it then formed the judgments that it did is for the office, not me, to interpret. However, I am happy to point noble Lords towards what has been published and see whether there is anything else that the OBR thinks would be helpful to say on the matter after the discussion this afternoon. Clearly, the OBR will not sign off on its scrutiny of AME savings if it does not think that the methodology and the numbers are reasonable.
Lord Barnett
My Lords, there is no need for noble Lords to waste their time looking at websites. I submitted a Written Question to the Minister asking when the OBR scrutinised these particular points. The Answer stated that the noble Lord, Lord Sassoon, passed my question to Robert Chote, who quickly gave me an answer. He referred in particular to chapter 3 of the 150-page document. I went through chapter 3 very carefully. Like the noble Lord, Lord Peston, I could not see in the whole of the chapter any details about scrutiny—far from it. Chapter 3.2 states:
“This is our central projection, or in other words, we believe there is an equal likelihood that growth will turn out to be higher or lower than we forecast”.
How do you scrutinise that? Or perhaps you should audit it. Or perhaps I have been going over the top, as the noble lady, Baroness Noakes, said. If I really wanted to go over the top, noble Lords on the Committee would know that they have heard nothing yet.
The noble Baroness, Lady Noakes, seems to think that she is still sitting on the Front Bench. I do not mind that. She was very good on the Front Bench. Occasionally she got it right. However, today she tells me that I am over the top. I wish someone, perhaps the noble Lord, Lord Sassoon, would explain where I am over the top. I have said that Robert Chote is being used by the Treasury. That is undoubtedly the case, and all that this brief debate has done is emphasise that. Indeed, the Minister has still not replied, or perhaps he has accidentally overlooked replying, to my Question about how often since or before this report Robert Chote and his colleagues met the Chancellor and other Ministers.
Lord Sassoon
Forgive me, but I went through the detail of what was published on the OBR’s website by Mr Chote, and I shall say it again. According to the document released by the OBR on its website, between 4 October and 29 November 2010 there have been seven substantive contacts between the OBR and Treasury Ministers, special advisers and their private office staff, including four e-mails, two meetings and one transmission of a hard-copy document. The details of the two meetings are included in the log on the website. I have tried to give this information and I repeat it now. There have been two meetings—on 4 November and 18 November. The details are set out on the website.
Lord Barnett
I must tell the noble Lord that I may not be doing my job properly, but I do not spend my life going through Treasury or OBR websites. Perhaps I should; it might make me better informed. I would not go “over the top”, as the noble Baroness described me. I doubt it. It might make me even more so. The noble Lord, Lord Sassoon, has now told us information that I confess I had not read on the website. It may be that every other Member of the Committee has read it on the website.
Lord Barnett
I am sure that the noble Baroness, Lady Noakes, read the website carefully. She did not quote it to me, but I now have the figures, which are a bit disturbing. I will read them with greater care later. Once again, Robert Chote is doing the job that the OBR is being set up to do—to tell the world how good the Treasury is. I had a little experience at the Treasury for five years. Officials are excellent, in my experience. I can see them over there, but they are not nodding, because they would not do that. The noble Lord, Lord Sassoon, can nod on their behalf. He is quite right; they are very good. I always found them to be excellent. However, that does not make the Chancellor right in saying all the things he says, either in introducing the comprehensive spending review or at any other time. I confess not only to being not over the top but to being too moderate in my remarks. I am very concerned.
The Deputy Chairman of Committees
My Lords, a Division is taking place. Does the noble Lord feel that he can wind up in 30 seconds, in which case I am sure he can carry on?
Lord Myners
“( ) There is a duty on the Office to comment on the completeness, balance and accuracy of major economic statements made to Parliament by the Treasury, particularly the Budget.”
Lord Myners
My Lords, in many ways the points that I want to make here have already been made by my noble friend Lord Barnett regarding an earlier amendment, and I run the risk of being accused by the Minister of, in his term, raking over the coals again. The key issue here, though, is to ensure that Mr Robert Chote and his two fine colleagues on the committee of the Office for Budget Responsibility are not put in a place where their words are taken to be saying more than they actually do.
As noble Lords know, I continue to express support for the creation of the OBR and of the appointment of Mr Chote and his two colleagues. I also commend the Government for the steps that they have taken to ensure that there is an independent process around appointments to the committee of the OBR. I regard the document published last week as being a significant improvement in financial governance in the country.
It is therefore perhaps somewhat churlish to say, “This is all very good but perhaps we should have a little more”, but there was one thing missing last week in the Chancellor’s Statement to another place. He put a lot of spin, to use tabloid language, on the OBR statement. He is not the first Chancellor to do that; his predecessor but one was particularly prone at times of the Budget and the Pre-Budget Report to putting spin on information contained in the Budget—indeed, to the point of often forgetting to mention things that were in the Budget which were subsequently regarded as being very important. I would not want to see the OBR used in the same way.
The purpose of my amendment is to seek to ensure that, when the report of the committee of the Office for Budget Responsibility is produced for Parliament by the Chancellor or by a Treasury Minister, there is a reasonable test of the completeness and the accuracy with which the report is described to Parliament. As the noble Lord, Lord Barnett, has already indicated, the report last week is replete with language about uncertainties, such as fan charts and the use of terminology to suggest probabilities and risks around central forecasting.
Lord Newby
My Lords, I am sure that all noble Lords wish that Chancellors were models of balance and completeness in the way in which they present figures, but the noble Lord, Lord Myners, is placing an unrealistic burden on the OBR if he expects it to undertake this task. For example, he uses the word “balance”; balance is not an objective fact but, to a considerable extent, is a subjective view. That goes equally for “completeness”—at what point does the failure to refer to the paragraphs on page 73 in the OBR report render the Chancellor’s statement incomplete? When the Chancellor has made a political speech on the economy, to expect the chair of the OBR to audit it, to coin a phrase, in some way as the noble Lord suggests is, frankly, impossible. While I agree with the sentiments behind the amendment, I do not think that it is workable.
Lord Burns
My Lords, I support the remarks of the noble Lord, Lord Newby. The noble Lord, Lord Myners, knows that what he is asking for is impossible; we also know that he can be very good at creating a little bit of mischief every now and again and we have to see this amendment in that light.
The OBR can be responsible only for its own documents; it cannot possibly hold the Chancellor to account. That is a job for Parliament, including the Treasury Committee and the Economic Affairs Committee. I can think of nothing that would make the job of the OBR more impossible than to give it a task that began to resemble this. The key thing is that the OBR has to be kept out of the political debate but the noble Lord, Lord Myners, implies that he would like to plunge it directly into that debate. I am sure he has used the amendment as a vehicle to make quite sensible points about some of the practices that occur from time to time, but the OBR will not protect us from those.
Lord Sassoon
My Lords, the noble Lord, Lord Myners, accused himself of being churlish. The noble Lord, Lord Burns, accused him merely of creating mischief. I offer no view, but agree completely with the noble Lord, Lord Burns, and with my noble friend Lord Newby, that his amendment would widen the OBR’s remit into completely inappropriate and vastly different territory from that covered by the Bill. The very focused remit in the Bill covers forecasts and the sustainability of the fiscal position. I noted that the noble Lord, Lord Myners, talked about the OBR commenting on the presentation of its report by the Chancellor—which would be difficult, for the reasons given by the noble Lord, Lord Burns—but his amendment goes much wider and is concerned with commenting on major economic statements, which covers a huge range of things well beyond the OBR's focus. I come back to the concerns that were expressed by noble Lords at Second Reading about the critical importance of the impartiality of the OBR. For example, the noble Lord, Lord Eatwell, said:
“I am sure it is right that the OBR should not become embroiled in political controversy”.—[Official Report, 8/11/10; cols. 16-17.]
That is exactly where the amendment of the noble Lord, Lord Myners, would take it—well beyond the sustainability of the public finances, which should be its remit. I ask him to withdraw his amendment.
Lord Myners
My Lords, far be it from me to wish to cause mischief. I have listened with great interest to the contributions of the noble Lords, Lord Newby and Lord Burns, and of the Minister. The Minister is correct that the wording of my amendment is very wide—wider than the OBR itself. However, I have often found it helpful in life to start wide, listen to the wise comments of others and narrow down. The noble Lord, Lord Newby, suggested that the word “balance” was capable of widely differing definitions, which would raise issues of implementation, and that possibly the phrase “absence of bias” might be better. I will reflect on that before Report. For the time being, I beg leave to withdraw the amendment.
Lord Peston
Lord Peston
My Lords, of course I tabled Amendment 29 before I had heard the Minister’s replies to many other amendments. What he emphasised most was the independence of the OBR and its ability to make up its own mind what it wants to do. I assume therefore that when I say it should be able to do this, he will get up and say that it can if it wants to. I do not think that I need to detain the Committee much longer, but I would like to hear the Minister confirm that the OBR can do what it wants. I beg to move.
Lord Sassoon
I shall try to be almost as brief. I agree absolutely that the OBR should have access to external expertise and that there should be appropriate transparency around this. The design of the OBR will allow it to have access to external expertise as it sees fit, and indeed the office held a range of discussions prior to producing the recent forecast. The office may convene advisory panels if it thinks that that sort of external perspective would be of help.
My only difficulty with the amendment is that the office would be required to publish the evidence taken from expert witnesses. I think that it should be for the OBR to determine what it thinks it is appropriate to publish. That is because we do not want to constrain freedom of exchange. The office has a general statutory duty to act transparently, within which context obviously it will think carefully about what it should publish. Further, although I hope that it will not be necessary, there is of course the backstop of the Freedom of Information Act to which the OBR is subject. I think we should leave it to the discretion of the OBR to choose to publish evidence from such experts as it consults.
I hope that my response has given the noble Lord, Lord Peston, the confirmation that he was seeking, and that he will feel able to withdraw his amendment.
Lord Peston
I thank the Minister very much for that answer. I, too, am making the assumption that the OBR will read our debates and therefore know what we think. Subject to that, I beg leave to withdraw the amendment.
Lord Higgins
Lord Higgins
My Lords, it may be convenient also to consider Amendments 31 and 32. When I first looked at Clause 5(3), it seemed fairly straightforward. It states that if the Government’s policies are relevant to the OBR’s performance of its duties, the office should not look at any alternative policies; that is, it should not suddenly say, “We want to look at the policies of the Labour Party as well as those of the coalition and make a comparison between the two”. That is what I understood it to say. The alternative proposed in one of the later amendments is rather more stringent than that, in that it effectively provides that the office should not look at any alternative policies at all, while the other amendment says that it should. So, in a sense, we have a choice. On balance, it is arguable that the Government, having reflected on this, came to the view that the OBR should not look at alternative policies, which might create a very confusing situation. Nevertheless, the subsection does seem to be unnecessarily restrictive.
To my surprise, during a discussion in our previous Grand Committee, it turned out that the clause was intended to do something quite other than what it appears in simple terms to do, and we had a lengthy discussion about that. I still do not understand either what the amended interpretation was supposed to do or how it would do it. It would be helpful if the Minister could give us some idea of that now, or alternatively could consider the matter further. However, as it stands, the provision seems to be quite straightforward. I beg to move.
Lord Eatwell
My Lords, when I prepared my speaking note for a discussion of this series of amendments to Clause 5(3), I wrote the following: “The intention behind Clause 5(3) is clear and sensible”. I now realise how enormously wrong I was in that observation, because, following our discussion last week, to which the noble Lord, Lord Higgins, has just referred, it is apparent that Clause 5(3) is neither clear nor sensible. These amendments give us at least an opportunity to talk around the issues and provide some material for the Government to help them to bring forward—as I hope and am confident they will—their own amendment to Clause 5(3).
Amendment 31 was prepared when I thought I knew what the clause meant: that the OBR should focus on developing a successful forecasting methodology and applying it to the evaluation of government programmes alone, keeping out of the arena of political controversy. The noble Lord quoted me on that just now and I stand by my belief that it should be the case. Even on these grounds, the clause is not well drafted. As I pointed out at Second Reading, it might be possible to conceive of opposition policies that do not impinge on government policies. My example was of an employment programme for which funding had been secured from the European Union so that there was no impact on the Government’s fiscal stance. Such a programme would not be an alternative but an addition to anything that the Government themselves were doing. Therefore, there is a degree of ambiguity as the clause stands.
My Amendment 31 seeks to eliminate this ambiguity by stating explicitly that in so far as OBR reports include an assessment of the impact of policies, reference should be made to government policies alone. I believe that my redraft of Clause 5(3) unwittingly achieves with far greater clarity what we now know the Government were hoping to do with their subsection, which is rather messy—indeed, hopeless—at the moment. It embodies the positive statement that government policies should be taken into account, which is what we were told it was supposed to do last time, and ensures by the use of “only” that policies emanating from elsewhere will not be part of the appraisal or forecasting activities. I think that I have actually cracked the Government’s problem for them.
It will be evident from what I have said that I disagree with the goals of the amendments moved by the noble Lord, Lord Higgins, which would take this out altogether, or tabled by my noble friends Lord Barnett and Lord Peston. I say that the OBR should focus on the Government alone and that it would be unfortunate if it were turned into a sort of policy referee. It might be possible if economic forecasting was a precise science, but it is not and there will always be a certain amount of judgment involved. It is not like a measuring rod with which you can say whether something is accurate. That is not what economic forecasting is about. At an appropriate time, I will move Amendment 31. I believe that the Government will bring forward something like this to solve the problems that we have identified in this part of the Bill.
Lord Higgins
I should perhaps have said in my opening remarks that I had, in effect, had second thoughts. It may be that my amendment simply leaves open the question, but we really want to clear it up.
Lord Peston
My Lords, I speak to Amendment 32, which is in my name and that of my noble friend Lord Barnett. When I first saw subsection (3), I must say that I was appalled, in particular by the words “may not consider”. This body is supposed to be independent and, unless we are to get a new form of thought police brought in here, can presumably consider anything that it likes. That does not mean that it should be involved in a report on itself. However, to tell a group—at the moment, a group of three expert economists—that what it can think about is limited by an Act of Parliament is absolutely absurd. I draw the Committee’s attention to what “may not consider” means; that you cannot even think or talk about something and that it has nothing to do with you. This is incompatible with the group’s independence and professionalism. I wonder what serious, self-respecting economist would wish to work under those circumstances. I would not, under any circumstances, be willing to work and be told that. I can remember the sad old days in the Treasury when everybody was told that under no circumstances were we ever to discuss or use the word “devaluation”. It did not have any effect: we just did it privately or secretly, and so on. That was the worst example of this that I can remember.
I was appalled by this subsection and I thought that taking out “not” was the best way of dealing with it. However, the method proposed by the noble Lord, Lord Higgins, is better still: take out the whole subsection. It may well be that we could put in another clause of a more positive nature. It is perfectly obvious that the OBR’s job is to consider the whole issue in the context of government policy, because, as the Minister has emphasised—although I slightly disagree with his logic—the OBR is not a decision-making body, it is just a forecasting body. I do not entirely accept that distinction, as noble Lords are aware, but I can at least see the Minister’s position. I accept what my noble friend Lord Eatwell and others have said; that forecasting is the OBR’s main role. There should not be a clause in what will eventually be a statute telling the OBR what it may consider, unless the meaning of “consider” in the English language has changed. My general view is that the approach of the noble Lord, Lord Higgins, was much better than mine or that of the noble Lord, Lord Barnett. We should remove subsection (3).
Lord Newby
We had a long debate on this issue at our previous meeting and I am not going to rehearse all the arguments. I suggested, out of frustration, that we were spending too long on this form of words, which, in slightly more words, actually had the same purpose as Amendment 31. We did not spend any time looking at it, because we were considering the amendments in order. However, Amendment 31 is clear and achieves the purpose that we sought to achieve in our debate last time, which was that the OBR, in making its assessments, obviously should take account of government economic and other policies. Equally, in the context of the second part of the subsection, the OBR’s role should not be what the noble Lord, Lord Peston, thinks it would be. It should not be able to stray and look at anyone’s alternative policies—that way madness lies. The OBR must have a straightforward remit to look at what the Government are proposing and work on the assumptions that the Government are making in their policies.
Lord Burns
My Lords, I agree with the noble Lord, Lord Newby. I had hoped that the purpose of the clause was to restrict the activities of the OBR to avoid it getting into political trouble. There are two clear cases where I could see this happening. One is where it is asked to continue a practice that has emerged in the past 20 or 30 years, whereby a Government ask the Treasury to cost the opposition manifesto as an election approaches. That practice has been divisive and has not suited anyone. I had hoped that this clause, by restricting the OBR to consideration of government policies, would prevent the Government or anyone else—for example, the Treasury Committee—asking it what the effect would be of implementing the Opposition’s manifesto.
The second thing that I had hoped would be avoided was getting into the sort of detailed arguments that took place in the summer about what the effects of particular packages of measures would be on economic activity, unemployment, the PSBR and so on. The remit given to the OBR by the Bill, as I read it, is to tell us what the effect would be on public finances of a whole set of government policies, taking into account the world environment and everything else, and whether or not the Government are on a sustainable path as a result of that collection of policies. That remains very challenging and is what the OBR’s job should be restricted to. It is set out early in the Bill. I had assumed that this clause was there to prevent encroachment, or a widening of the OBR’s remit to include a number of other things, all of which would lead us into a difficult area of political activity.
Lord Burns
My Lords, for the reasons that I have set out about the importance of the political impartiality of the OBR, I felt that the original subsection (3), although a little inelegant, did much of its job. However, I also support the spirit of Amendment 31, although I am a little concerned about the use of “effects”, which could in future give someone the opportunity to ask to have particular subsections of government measures analysed for their effects on the economic outcome and on the public finances. I worry that going down that road could cause problems in future.
Lord Sassoon
My Lords, perhaps I might go back to confirming what we are seeking to do and not to do in the Bill. We have discussed all these related issues at some length. The noble Lord, Lord Burns, has got it pretty much spot on in terms of what we are trying to achieve, but for the avoidance of doubt I shall restate it.
With regard to the core forecasting remit, the intention is that the OBR should consider government policies and not other policies. To take the point made the other day by the noble Lord, Lord Eatwell, we want to ensure that the OBR can take account of external shocks, for example, so in technical drafting terms his amendment would not quite work as it focuses narrowly on policy. We agree, anyway, that it is the Government’s policies and not other policies that need to be considered. We must not leave out the fact that, in doing the forecasts, the OBR can look at scenarios and at other issues.
With regard to the noble Lord’s specific question about an EU-related policy, either it has been adopted by the UK Government and is therefore included in government policies or it is not. Either the EU policy example has been adopted as policy in the UK or it has not, therefore it falls accordingly. That would get picked up, so that much is clear. Equally, it is the clear intention that the OBR should not be drawn into costing alternative policies, whether they are opposition policies or just other scenarios or partial packages of policies. That is what is intended by the construct in the Bill, and part of it is clarified by paragraph 4.12 in the draft charter.
Even though I am convinced that the Bill achieves what most, if not all, of us are trying to achieve in these various respects, I take to heart the fact that we have spent a lot of time going around the interaction of Clauses 4 and 5(3) and, to an extent, the relationship with Clause 1. Notwithstanding the fact that I think that the Bill works as drafted, I am listening carefully to all the points being made. I will go away and see whether anything can be done to make it even clearer in the Bill what the intentions are. However, it is difficult drafting. We should certainly not take out Clause 5(3) in its entirety, because, as the noble Lord, Lord Burns, pointed out, we want to make sure not only that the forecasts are concentrated on the right thing but that the OBR is not drawn into other political controversies.
Lord Peston
Can the noble Lord give one clarification on that? We all agree that, if we are going to have an OBR, we must keep it out of political controversy, but do the “government policies” to which he referred include the behaviour of the Monetary Policy Committee of the Bank of England?
Lord Sassoon
When I talk about government policies, I mean government policies. What assumptions the OBR makes about monetary conditions, interest rates and so on touches on an issue about which my noble friend Lord Higgins asked earlier. I have undertaken to relay his request to see whether Mr Chote wants to say any more about how the OBR considers monetary policy issues. Certainly, while I said that the OBR should consider government policies, there are lots of other things that it needs to consider. It is clear that it is making assumptions about interest rates and so on that are taken broadly from what the Bank of England lays out.
Lord Peston
Since we are putting this on the statute book, is it the case that the OBR would not be offending the law, as it will eventually be, by paying great attention to what the Monetary Policy Committee of the Bank of England was up to? I merely want some reassurance on that. There is no way in which it can do any forecasting unless it does that.
Lord Sassoon
I assume that in all normal circumstances it will look intently at the forecasts of the MPC about future inflation and interest rate prospects.
Lord Burns
Perhaps I may help the noble Lord, Lord Peston. One must assume that the Monetary Policy Committee will abide by the law under which it conducts its affairs.
Lord Sassoon
In summary, I cannot promise that there is any way of making all this clearer. I think that there is consensus among us as to what we are trying to achieve in this area. I shall think hard about whether we can make it even clearer. On that basis, I ask my noble friend Lord Higgins to consider withdrawing his amendment.
Lord Higgins
My Lords, that is a very sensible reaction on the part of the Minister.
Lord Eatwell
Before the noble Lord withdraws his amendment, I agree entirely with the Minister that there is a clear degree of consensus on what we are all trying to achieve. However, there is a degree of consensus that Clause 5(3), as currently drafted, does not achieve it. When we have concluded Committee, I intend to write to the Minister about this matter and a number of others where I think that we have total consensus on what we want to achieve and even perhaps to suggest meetings prior to Report to sort it out. That way, everybody can be clear about and comfortable with what we shall in due course pass into law. Having said that, I really do not see how Clause 5(3) can survive as currently drafted but, given that we are now really clear about what we want to do, we can sort something out.
Lord Higgins
My Lords, the whole purpose of a Committee stage is to get to the bottom of certain difficult aspects of a Bill. I am sure that it is right that the Minister should look at the matter very carefully between now and Report, in particular with the parliamentary draftsmen. I have no doubt that the noble Lord, Lord Eatwell, and others can look at it as well. It might be helpful to keep in touch on whether we all agree on the amendment to table or whether we should put down alternatives. At all events, I beg leave to withdraw the amendment.
Lord Eatwell
Lord Eatwell
My Lords, Amendment 36 refers to Clause 6(1)(b) and seeks to remove the attempt to qualify Clause 5(2). I begin by confessing that, on close inspection, my amendment is imperfectly drafted. I did not wish to eliminate any guidance that the charter might provide with respect to the beleaguered Clause 5(3) because guidance is certainly needed there. However, if Amendment 31—or something like it—appears on Report, the qualification of Clause 5(3) will be unnecessary. The core purpose of the amendment is to remove the ability of the Government to use the charter to qualify Clause 5(2).
Noble Lords may think that the terms “objectively”, “transparently” and “impartially” are perfectly well defined by the Oxford English Dictionary and that no further guidance or qualification is required and, if they examined the draft charter, they would find that they were absolutely right to think that. Taking just one of the words which one would think would be easy to understand, I invite noble Lords to consider the charter definition of “objectively”. Paragraph 4.7 of the charter states that this means that,
“the OBR should not analyse or comment on the particular merits of Government policy”.
The problem is that the philosophical issue has been pushed on to another word because we now need a definition of the word “merits”, as I will illustrate.
In Clause 5(3), which we have toiled over for some time, the OBR is required—as we all agree—to consider government policies that are relevant to its forecasting duties. Let us suppose that the OBR demonstrates that a particular government policy results in an increase in unemployment—and one must give credit to the Government and to the OBR for now publishing unemployment forecasts—then, as it is universally accepted that unemployment is a bad thing, such an assessment will inevitably reflect on the merits of the policy. If it increases unemployment, that is a bad aspect of the policy and is a comment on its merits; it cannot be anything else. Therefore the definition of “objectively” has been qualified in such a manner that it no longer has the generally accepted meaning of the word.
If we accept the guidance of the charter, the OBR could not comment on what is happening to unemployment because employment and unemployment are universally accepted as merits and demerits. Trying to define these words is simply an exercise in exclusion and limitation. The words have clear, commonsense meanings. Moreover, as the noble Lord, Lord Turnbull, told me earlier, the word “impartiality” in government circles has already been defined by the Committee on Standards in Public Life. A definition of the word exists in government life and it does not require another one. If the Treasury definition were contrary to that of the Committee on Standards in Public Life, that would be very disturbing.
The question is: why do we need this? The fundamental danger in Clause 6(1)(b) is the possibility of further guidance distorting the normal meaning of words that are fully understood in common parlance. It is far better to rely on common sense in understanding these words. The lack of qualification gives them strength; any qualification would seriously weaken their value. I beg to move.
Lord Turnbull
I support the amendment, at least in so far as it relates to Clause 5(2), for much the same reasons as those set out by the noble Lord, Lord Eatwell. These words are meant to be drawn either from the seven tenets of public life set by the Committee on Standards in Public Life, or from the synonyms for them in the Civil Service Code. If there is any amendment to be made it is that Clause 5(2) should bring the words used into line with the accepted vocabulary that is used in these other documents. You would then dispense with Clause 6(1)(b) as it relates to subsection (2).
At Second Reading, the most telling criticisms that were made on an occasion where this initiative was largely welcomed, was the sense that independence was being granted with one hand by the Treasury and that another clause subtly began to claw it back, and that this somehow undermined the sense of true independence. We can dispense with this and, if any changes are desired, the wording of Clause 5(2) can be brought into line with the vocabulary that is used in these other statements of the values of public life.
Lord Sassoon
My Lords, I find this interesting because what the noble Lords, Lord Eatwell and Lord Turnbull, have said exemplifies why we need some back-up explanation of these terms in the charter. That must be the right place for it because the noble Lord, Lord Eatwell, started by saying that we could rely on the Oxford English Dictionary definition of the three terms but then went on to refer to the usage given to the terms by the Committee on Standards in Public Life. That in itself points out that, even on his construction of how these words should be used, there are at least two sources. I have neither the OED nor the committee’s statement in front of me, but I would be surprised if they were precisely the same. Then the noble Lord, Lord Turnbull, referred to the Civil Service Code.
In arguing for the amendment, the noble Lords have precisely explained the difficulty that we are in: however you do it, you go back to different sources for the meaning of these important terms. It is therefore important in the charter to try to tease this out. I agree that this could be done in a number of ways; it could refer to the OED, the Civil Service or a number of other things. However, this discussion has reinforced my view that somewhere we need to provide some guidance.
I shall give the Committee another example, very much in this space, about the kind of difficulty that we can otherwise get into, and this relates back to one of our previous discussions. The US Congressional Budget Office has an impartiality remit, but it defines “impartiality” to mean that it has to include analysis of policy proposals made by all political parties. I think that we all agreed earlier that that is precisely what we do not want the OBR to do, and that suggests to me that it is a reason why we need to give a bit of guidance in the charter for what the three critical terms mean. Indeed, Robert Chote himself, following questions on impartiality, told the Treasury Select Committee:
“I think you want to make sure that the remit of the OBR is agreed ex ante, rather than the subject of a contentious debate ex post on whether it is doing what people want it to do … if it is left to the OBR on its own to draw the line, there will always be people just below the line who will be disgruntled … which will reflect on the OBR”.
That was in the context of a wider discussion about the virtues of, and the need for, clarity.
Nothing is set out in the charter that can undermine the Bill. The guidance can relate only to functions conferred by the Bill; it cannot add to or distort them. Further, as we have noted, the charter must be approved by another place before it can come into effect. I have listened carefully to the debate, which has suggested to me that even those who say that we do not need the interpretation of the charter are actually using different definitions. I think that the charter is the right place in which to provide the OBR with the clarity that it quite rightly seeks. For that reason, and because the noble Lord admits that the amendment does not quite work technically, I ask him to withdraw it.
Lord Eatwell
I am grateful to the noble Lord. If we get Clause 5(3) right, it may work very well, but we have been chewing this matter over perhaps to excess. The Minister made one point about the issue of impartiality with respect to the Congressional Budget Office. While there is some relationship between the CBO and the OBR, the Congressional Budget Office is actually a creature of Congress. That is different from the OBR, which is a creature of the Executive. It means that we have a very different issue before us.
I am still disturbed by the definition of “objectively”. As I pointed out, the notion of merit and demerit is rather difficult in and of itself, and therefore, in preparing for the final draft of the charter, I would like the Government to consider whether the word “merits” conveys exactly what they want it to.
Lord Sassoon
I am not sure whether this will help, but just to be clear, we are expecting the OBR to assess the impact of policies on forecasts. So there is no question of merits and demerits, other than that we are trying to exclude all questions of merit and demerit and keep to the factual impact of policies. I am struggling a bit with any suggestion that we are somehow dragging the OBR into considerations of merit or demerit. The noble Lord took the example of employment and unemployment. All we ask of the OBR is that it should tell us what the factual situation is and absolutely not to comment on its merits or demerits. There is no question of enormity of judgment by the OBR in this or any other respect.
The basic underlying language here is the same as that which applies to the National Audit Office in the National Audit Office Act 1983. That is all we are trying to replicate in this respect, even though this is scrutiny and not audit.
Lord Eatwell
The noble Lord sounds like the fellows in my college whose standard reaction to any proposal of mine is, “We’ve always done it that way”. One peculiarity in the drafting of this Bill and of the charter is that everything is defined in terms of negatives. What we have in the charter is that the OBR should not analyse or comment on the particular merits of something. Why not say what you mean by using words such as, “The OBR should analyse or comment only on the impacts of Government policy”, as the Minister has just said? Why is everything defined in terms of the negative? Why can we not say what we want to achieve in positive terms?
The other problem with this is that I give the Government enormous credit for incorporating Clause 5(2) in the Bill. They deserve tremendous credit for doing that. However, subsection (1) weakens it, not necessarily as presented now, but it provides an opening for future Governments to change this guidance. That is what we do not want. It is unfortunate that this qualifying subsection is incorporated in Clause 5(2), which is tremendously to the Government’s credit.
I shall take away the Minister’s comments and think about them. In the mean time, I beg leave to withdraw the amendment.
Lord Higgins
Lord Higgins
My Lords, the amendment, which has a whole clause to itself, is not difficult to understand. The Bill as drafted states:
“The Office must aim to carry out its functions efficiently and cost-effectively”.
The amendment seeks to delete the words “aim to” so that it reads, “The Office must carry out its functions efficiently and cost-effectively”. There would be a loophole if the office could simply say that it was aiming to do this when it may not achieve that objective. More sensibly it should be mandated to operate efficiently and cost-effectively, otherwise it may overspend its budget by an enormous amount and say, “Do not worry, these are unforeseen circumstances. We aim to do it”. I beg to move.
Lord Sassoon
My Lords, of course the OBR should be cost-effective and efficient—there is no question about that—and the amendment seeks to increase the requirement for it to be so. However, in reality the amendment would not change in substance the requirement on the OBR because, if it was ever challenged on this point, the challenge would be subject to what it would have been reasonable for the OBR to have done. I agree with my noble friend that it would be nice if we could have more direct language here but I am advised that the amendment would make negligible difference. That is because if it was ever tested in a legal context—one hopes it will not be—the reasonableness of what the OBR had done would be encapsulated in the words “aim to”.
At the risk of the noble Lord, Lord Eatwell, jumping up again, I have to say that this is the same as the requirement on the National Audit Office, as set out in Part 2. It is not necessarily a good defence; I merely observe—
Lord Sassoon
Of course, in the wider context, the accounting officer will have to answer for the OBR’s cost-effectiveness and efficiency and it will be subject to the normal governance and scrutiny arrangements for public bodies. Those scrutiny arrangements will include an audit, I say advisedly, by the NAO, which will have the power to examine and report to Parliament on a number of matters, including the economy, efficiency and effectiveness of the OBR.
I thank my noble friend for trying to tease out what is going on here. It has enabled me to ask questions and to establish that the words as originally drafted essentially encapsulate the test that a court would use if the OBR was ever challenged. On the basis that we are trying to arrive at the same point, I hope he will withdraw the amendment.
Lord Higgins
It will be a question of it coming not to court but to the NAO, which is dealt with in the second part of the Bill. It seems to me that the office would have been on much stronger ground if it was simply told that it must carry out these functions than if it merely said, “Oh well, if it’s all right, I was aiming to but I’ve failed”. None the less, to a degree I take the point made by my noble friend and I beg leave to withdraw the amendment.
Lord De Mauley
My Lords, this might be a convenient if somewhat early moment for the Committee to adjourn until Thursday at 2 pm.
House of Lords
Housing Benefit
(13 years, 5 months ago)
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Baroness Morgan of Drefelin
To ask Her Majesty’s Government what assessment they have made of the impact of their proposed housing benefit changes on the number of homeless children.
Lord Knight of Weymouth
My Lords, on behalf of my noble friend Lady Morgan of Drefelin, and at her request, I beg leave to ask the Question standing in her name on the Order Paper.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, we have carried out an impact assessment on the changes to housing benefit. This was published on 30 November 2010. It does not contain an estimate of the impact on homelessness as we cannot anticipate the behaviour of tenants or their landlords. To reduce the risk of households becoming homeless we have a substantial package of financial and practical support in place, and we are giving households up to nine months’ transitional protection so that they can look for alternative accommodation if they need to.
Lord Knight of Weymouth
My Lords, the Government’s impact assessment that the Minister referred to estimates that 450,000 children will be affected by these benefit changes. Shelter estimates that 129,000 children will be forced to move home and that 54,000 live in families whose income, after housing costs, will now be pushed below £100 a week. Given that the Government say that they intend to take forward further analysis of the child poverty effect, should they not suspend these controversial orders until that important work is complete?
Lord Freud
My Lords, there are some extraordinary claims being made around these measures. There are some heroic assumptions in the Shelter figures. For instance, they are based on an average shortfall of £18 a week, which is well above what the shortfall will be. I should point out that 40 per cent of people in the private rental sector move every year and 70 per cent move within three years.
Lord Rix
What advice can the Minister offer people with a learning disability, who might find that they can no longer pay rents, which are increasing all the time, particularly in the London area? Does he think it appropriate that the Government should inflict trauma on people less able to cope with that trauma, some of them very vulnerable indeed?
Lord Freud
My Lords, the Government are fully aware that some people will have to make adjustments in their living arrangements. That is why we have put a large amount of resource into helping that transition process. The current figure, which we announced last week, has been increased by another £50 million to a total of £190 million over the SR 2010 period.
Lord German
My Lords, the Government have told us how many people will be affected in the private rental sector by the changes that they have laid. On the other side the argument now seems to be that, if you take out issues around London, no one will see their rent reduced and they will therefore be turfed out on their ear. Meanwhile, the Government believe that the private sector will reduce its rents. Why is the Minister so convinced that the private sector will reduce its rents?
Lord Freud
My Lords, I thank my noble friend for that question, which gets to the heart of the issue. There are three reasons why we think there will be an adjustment in the marketplace. First, we as taxpayers represent 40 per cent of the private rental market. Secondly, there have been some surveys of landlord attitudes; roughly half say that they are prepared to reduce rates. Obviously, they are sending a message back to the main buyer. Thirdly, last week we put in place a mechanism to help that adjustment process. We are prepared to pay direct rents to landlords where they are prepared to show flexibility in helping people to stay in their homes.
Baroness Sherlock
Will the Minister comment on the concern expressed by charities that families may be forced to move repeatedly? In particular, can he comment on the fact that all the evidence shows that families at risk who move repeatedly can be put out of the reach of the social services? What steps will the Government take to protect vulnerable families in that situation?
Lord Freud
My Lords, one of the points that was raised by SSAC, the advisory committee, was that by having two sets of changes in April and October we were potentially making people make two sets of adjustments. That is why we fine-tuned our arrangements, as we announced last week, so that they come into effect in April, but there is a nine-month period for people to make an adjustment. We have also put in £50 million to help local authorities deal with the transition—some of which will be difficult—to make sure that it goes as smoothly as possible.
Baroness Gardner of Parkes
As it is very important that families are kept together, can the Minister assure us that in the instances where families have to move—we all appreciate that we do not know how many yet or how that will be—every effort will be made to retain families as a complete unit rather than split the children away?
Lord Freud
My Lords, in response to my noble friend on that very important question, clearly we have every intention that families should be kept together. That is why we are putting so much money into managing the transition—£190 million—to make sure that it goes as smoothly as possible.
The Lord Bishop of Lichfield
My Lords, is the Minister aware of this morning’s report form the Joseph Rowntree Foundation that highlights the significant number of children in poverty who live in households where the parents are in work? Will the impact of housing benefit changes affect working and non-working households alike—with families becoming homeless and, as the most reverend Primate the Archbishop of Canterbury suggested, being forced to move away from employment however badly paid they are?
Lord Freud
My Lords, the right reverend Prelate makes an incredibly important point. As the Joseph Rowntree Foundation reported today, the latest figures show 2.1 million children in poverty from working families and only 1.6 million from out of work families. The whole purpose of our reform of the benefit system is to get rid of that problem—to make sure that there is a smooth transition between out-of-work and in-work, that work always pays, and that it has the effect of bringing people out of poverty.
Police: Retirement
(13 years, 5 months ago)
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Lord Hunt of Kings Heath
To ask Her Majesty’s Government what assessment they have made of the impact of the decision of a number of police forces forcibly to retire police officers who have 30 years or more service.
The Minister of State, Home Office (Baroness Neville-Jones)
My Lords, the Government have not made any such assessment. It is the responsibility of police authorities and chief officers to manage the resources and staff available to them to ensure effective policing for the communities in their area. They are best placed to consider operational decisions including the impact of using their powers under Regulation A19.
Lord Hunt of Kings Heath
My Lords, does the Minister not think it extraordinary that some of our most experienced police officers are being forced to retire while the Government are prepared to waste millions of pounds on the election of police commissioners? Can the Minister tell me how many police officer jobs will be lost in order to pay for the politicisation of our police force?
Baroness Neville-Jones
My Lords, the Government do not accept the conclusion to which the noble Lord has just leapt. As things stand, the officers who are eligible for retirement, having 30 years’ service, number 3,260 out of a total force of 143,000 warranted officers. Therefore, I do not think that we should exaggerate the quantum of those involved.
Lord Dholakia
My Lords, will the Minister ask the police authorities to carry out an impact assessment on crime and security because of the cuts in numbers? Will she ensure that those cuts do not have an adverse impact on the recruitment of people from black and ethnic minority communities, which is a serious problem in police forces?
Baroness Neville-Jones
My Lords, the Government continuously assess the impact on policing of the measures that they take, but the matter that we are talking about is an operational one. I am sure that the police will wish to ensure that there is no discrimination in their recruitment policies.
Lord Reid of Cardowan
My Lords, does the Minister accept that this is a matter not just of numbers but of quality? Notwithstanding the autonomy of local police services, will she prevail on them at least to consider the loss of experience and wisdom, not to mention the loss to the public purse, arising from arbitrary and enforced retirement after 30 years’ service? Will she ask them to give the fullest consideration to maximum flexibility when choosing retirement for any person?
Baroness Neville-Jones
My Lords, this is an operational matter for the police and I am sure that they will take note of what the noble Lord has just said. A number of chief constables, including the head of the Metropolitan Police Service, have indicated that they do not wish to lose the experience that is available to them. I remind the House that this power is available to the police. It permits them to retire people; it does not oblige them to do so.
Lord West of Spithead
My Lords, my question relates to specialisations. I accept that these decisions have to be made by local police forces but, for example, as the Minister will well know, people such as counterterrorist support officers working for NaCTSO tend to be at the very end of their careers and have huge experience. I believe that somehow the Government have to make a judgment in the overall balance of the advice that goes, for example, to the architectural industry and other areas. Does the Minister have any way of measuring the cuts that are being made in various areas so that there is a national view of the impact on areas as important as counterterrorism?
Baroness Neville-Jones
My Lords, as I have just said, this is a power that is open to the police, and senior police officers are not obliged to take this measure, among the measures that are open to them. The Government are clear that we need police to be available on the streets. HMIC has noted that 11 per cent of the available police force is invisible to the public at any given moment. In other words, we need to drive out a great deal of the bureaucracy that was imposed on the police by the previous Government. I am absolutely certain that the police will take their responsibilities seriously in ensuring that terrorism does not in any way prevail in this country.
Lord Laming
My Lords, the Metropolitan Police has one of the finest child protection units in the country—indeed, nowadays I would say even beyond this country. Can the noble Baroness use her influence to ensure that, in the reductions that are to take place across the board in the police force, the highly specialised units that deal with the most vulnerable children are properly protected?
Baroness Neville-Jones
My Lords, I am sure that the House shares the sentiments that the noble Lord has just expressed and I have no doubt that the police do too.
Baroness Howe of Idlicote
My Lords, where does age discrimination fit in here, if it fits in at all, either legally, if the discrimination legislation has come into force, or morally?
Baroness Neville-Jones
The regulation relates to the number of years of service that an officer accrues—that is, 30 years—and it is the only measure that the police have under the existing system for retiring people in the public interest. However, that does not necessarily correlate to anyone’s age. I do not think that it is an age discrimination matter; it is a length of service issue.
Baroness Scotland of Asthal
My Lords, further to the question asked by the noble Lord, Lord West, how do the Government intend to preserve a service when individual services may take a decision which does not allow for national coverage to be maintained? How are the Government going to make sure that does not happen?
Baroness Neville-Jones
It is a matter of the close links that the Government have with the police. I am sure the police will wish to ensure, through ACPO and their other organisations, that the net result of the decisions taken by individual commissioners makes sense in policing terms. I have no doubt that the Government will be in touch with them over this.
Schools: Pupil Premium
(13 years, 5 months ago)
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Baroness Williams of Crosby
To ask Her Majesty’s Government what will be the requirements for a child to be eligible for a pupil premium.
The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)
My Lords, the Government consulted on the eligibility criteria for the pupil premium earlier this year and that consultation ended on 18 October. This consultation included proposals for eligibility criteria, including free school meals, tax credit data or commercial packages, as well as on whether to include looked-after children and service children. We are considering the outcome of the consultation and will make an announcement in due course.
Baroness Williams of Crosby
I thank the Minister for that reply. Perhaps I may remind him that at present children on free school meals get roughly half the proportion of GCSEs at A to C level as those who are not on free school meals—that is to say, their attainments are half as great. Given that, can the Minister tell us how he will ensure that pupil premiums are indeed paid to advance the attainments of disadvantaged children and that schools are not tempted to use those payments to encourage more children on the edge of getting five A to Cs rather than those where the return will be certainly slower? Will he consider making it an entitlement—not a general grant but an entitlement—for each disadvantaged child?
Lord Hill of Oareford
I am grateful to my noble friend, and I agree with her that it is extremely important that the purpose of the pupil premium—to help the children who need it most—is upheld in the system we deliver. She is absolutely right about the disparity in educational achievement between children on free school meals and those who are not on free school meals: 54 per cent who are not on free school meals get five A* to C while only 27 per cent who are on free school meals achieve it. The point about ensuring the money is used for the purpose for which it is intended is absolutely right. Our intention is that it will be for heads to spend as they think fit the money which will go to schools, in the way that they believe can best deliver help to the pupils they know. However, they will have to account each year for how the money is spent. I agree with my noble friend that one would not want the money to be used for people who are, as it were, gaming the system. That is part of a broader consideration we need to take about how to ensure that the system is not gamed in future.
Lord Hill of Oareford
The point about the pupil premium is that it is linked to deprivation. As we all know—no one better than the noble Lord, Lord Rix—there is a lot of overlap between children with SEN and children with deprivation. The key point is that the pupil premium is intended for deprivation.
Lord Avebury
My Lords, considering that Gypsy, Roma and Traveller children are the most educationally deprived of any section of the community, will the pupil premium be payable automatically in respect of those children?
Lord Hill of Oareford
That is an extremely good question. I suspect that there is a question around the identification of those children, but if they are being educated and are registered in school, and if they fulfil the eligibility criteria, as one would imagine they would, then the money for that would go to that school.
Lord Campbell-Savours
My Lords, who will monitor the annual review to which the Minister referred, which is at the discretion of head teachers, and who will be responsible for undertaking that review? How will those head teachers themselves be held accountable?
Lord Hill of Oareford
As I said, my Lords, the intention is that those head teachers will spend it as they think fit. It will be a matter for their judgment because they know the pupils best. If, for instance, they think that the money would be better spent on one-to-one tuition rather than something else, they should make that judgment. We suggest they should have to account publicly to parents and publish how the money has been spent, so that people can see the linkage between the money and what it is spent on.
Baroness Walmsley
My Lords, given the importance of early intervention, will the Government supply an equivalent amount of money to early-years settings that take children from very disadvantaged backgrounds? If so, will the same criteria be used as are used for children who are at school beyond the compulsory school age?
Lord Hill of Oareford
As my noble friend will know, because she and others in her party have campaigned for this so hard, the Deputy Prime Minister announced fairly recently that there will be a sum, building up to £300 million over the spending review period, for extending help for the most disadvantaged two year-olds in early education.
Lord Knight of Weymouth
My Lords, will the eligibility for the pupil premium be broadly similar to that for the current education maintenance allowance? If the Government are serious about increasing educational opportunities, should not eligibility for the pupil premium passport entitlement to the EMA at 16 and bursaries for tuition at university thereafter?
Lord Hill of Oareford
My Lords, the pupil premium, as the noble Lord knows, is intended for pupils from the age of reception up to year 11. I am aware of the issues around the education maintenance allowance and the point that underlies the noble Lord’s question. The enhanced discretionary fund, which will be targeted on those who most need the help, will, I hope, deal with some of that. For 16 to 18 year-olds, deprivation factors are already in the funding formula which will help to address some of the same issues.
Lord Mawhinney
My Lords, what do the Government intend to do with those head teachers whose reports to parents indicate that the money was not used for the premium?
Lord Hill of Oareford
As usual, my noble friend is a few steps ahead of me. We will need to address how we police that, and to reflect on the point made by the noble Lord, Lord Campbell-Savours, as well. We are not yet even at the point of announcing the premium so I am afraid that I cannot give my noble friend a completely satisfactory answer about what we will do in a year’s time.
Lord Brooke of Alverthorpe
But did not the noble Baroness put forward a perfectly legitimate solution to the problem? In many of the areas of localism, which many of us support, there will be people who do not implement what the Government wish, and they will not be accountable in the way that one would expect. Should we therefore not be moving towards ensuring more entitlement to the basic requirement, such as making the pupil premium an entitlement?
Lord Hill of Oareford
My Lords, obviously I heard the point made by my noble friend and underlined by the noble Lord. We need to reflect on these points and will announce before Christmas how we will go forward on the pupil premium, what the eligibility criteria will be, and how it will operate.
Parliament Act 1911: Centenary
(13 years, 5 months ago)
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Lord Roberts of Llandudno
To ask Her Majesty’s Government whether they will mark the centenary of the Parliament Act 1911.
The Chancellor of the Duchy of Lancaster (Lord Strathclyde)
The Government have no current plans to mark the centenary of the Parliament Act.
Lord Roberts of Llandudno
I am most disappointed by the noble Lord’s Answer. The Parliament Bill became an Act on 18 August 1911 and a century has gone by. With all the talk of reform, should we not at least set a deadline of 18 August or a date close to it—I do not intend to call the House back on 18 August unless noble Lords so desire it—for the reform procedure?
May I also make a suggestion about any new voting system? The Labour Party says in its manifesto that it wants a proportional system for elections to the House of Lords, and we say in the coalition agreement that we, too, want a proportional system. The preamble to the Parliament Act 1911 suggests that the present House of Lords be substituted by,
“a Second Chamber constituted on a popular instead of hereditary basis”.
Would the Leader please give us his response to that?
Lord Strathclyde
My Lords, I am sorry to have disappointed my noble friend with my Answer. I fear that I am going to disappoint him again, although I must say that I admire his perseverance after 100 years since the last Liberal Prime Minister passed the Parliament Act 1911. I think he is optimistic to suggest that the Chamber will be constituted on a different basis by August next year, or that any of us will be here to mark that occasion on 18 August. I can tell him, however, that the Deputy Prime Minister intends to publish a draft Bill early next year that makes provision for a wholly or mainly elected Chamber with elections on a system of proportional representation.
Viscount Tenby
Does the Leader of the House agree that a proper and speedy way of marking this celebration might be to give a fair wind to the Bill of the noble Lord, Lord Steel of Aikwood, on the reform of the House? In this matter I declare an historical interest.
Lord Strathclyde
The noble Viscount, Lord Tenby, certainly does have an historical interest, and I admire his perseverance and that of my noble friend Lord Steel, who had yet another Second Reading on his Bill on Friday. I am not one of those who regard the passage of the 1911 Act as one that the House of Lords should celebrate. I think it was a disaster for the House of Lords. We took on the House of Commons at the wrong time, we overstepped the mark, and if it should be commemorated, it should be commemorated by an act of mourning.
Lord Grocott
My Lords, is it not worth reflecting, with all due respect to the noble Lord, Lord Roberts, who is so persistent on these matters, that one stark contrast between the Parliament Act 1911 and the attempt which the Government are apparently making towards reform today is that the 1911 Act, as the Leader of the House has reminded us, was about defining the powers of the House of Lords in relation to the democratically elected House of Commons? Is it not worth taking a lesson from that in acknowledging that the present reforms are all about a directly elected House of Lords, which would clearly diminish the House of Commons and lead inevitably to conflict or even a blockage between the two Houses? Until the Government address, which they have not done so far any more than the previous Government did, this fundamental question of the effect of an elected Lords on the powers and influence of the House of Commons, they really do not deserve to be taken seriously on Lords reform.
Lord Strathclyde
My Lords, I am with the noble Lord, Lord Grocott, on 1911. It was a moment when the House of Lords did not act responsibly, and this House should not have confronted an elected Chamber. As for everything else that he says, these are matters for the Bill that we will publish early next year and for the debates that will ensue.
Lord Elton
My Lords, when mulling over the proceedings of this afternoon and tonight, will my noble friend bear in mind what many of us have observed over many years, which is that every Government, as they get older in government, want more power in relation to Parliament and that, in this, they are heartily supported by a Civil Service that regards Parliament as a considerable nuisance? Will he therefore, when he comes to frame a measure to remedy the present situation, avoid giving more power to the Government in relation to Parliament as a whole and reflect that this House must always supply, in control of the Government, what the other House cannot?
Lord Strathclyde
My Lords, this Government will be different, which is why so much of our legislative programme is about devolving power to people. The localism Bill, which will be published shortly, and the Bill on elected police commissioners are all about taking power away from the Executive and handing it back to people.
Lord Elystan-Morgan
My Lords, does the Minister accept that as a matter of legal interpretation, the words “popular basis” apply not only to a directly elected House but to a House that is appointed on a broad popular basis?
Lord Strathclyde
My Lords, that is a good try. I am not sure that I agree with the noble Lord, and I am certain that it was not in the mind of the parliamentarians who passed the 1911 Act.
Lord Tordoff
My Lords, to follow on from the remarks made by the noble Lord, Lord Grocott—I think it is our turn here, and it is now 30 minutes.
National Security Strategy Committee
The Chairman of Committees
That a Select Committee of ten members be appointed to join with a Committee appointed by the Commons as the Joint Committee on the National Security Strategy, to consider the National Security Strategy:
L Cope of Berkeley, L Fellowes, L Foulkes of Cumnock, L Harris of Haringey, L Lee of Trafford, B Manningham-Buller, B Ramsay of Cartvale, L Sterling of Plaistow, B Taylor of Bolton, L Waldegrave of North Hill;
That the Committee have power to agree with the Committee appointed by the Commons in the appointment of a Chairman;
That the Committee have power to send for persons, papers and records;
That the Committee have power to adjourn from place to place in the United Kingdom;
That the Committee have leave to report from time to time;
That the reports of the Committee shall be printed, regardless of any adjournment of the House;
That the Committee have power to appoint specialist advisers; and
That the evidence taken by the Committee shall, if the Committee so wishes, be published.
Parliamentary Voting System and Constituencies Bill
(13 years, 5 months ago)
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16:58 - Division on Amendment 5. - Ayes: 199 / Noes: 195 - Amendment 5 agreed.
17:38 - Division on Amendment 15 - Ayes: 166 / Noes: 210 - Amendment 15 disagreed.
Lord Rooker
Lord Rooker
My Lords, this is my second offer of a lifeboat to the coalition. Last week, I offered one on the indicative aspect, and today I offer “before 31 October”. It does not alter the Bill in any way or force any change. The coalition can still meet their intention to have the referendum on 5 May, even if they accept my amendment. It is now 6 December. We are five months away from that date, or 20-odd weeks. Royal Assent is some time away. The Bill has to go back to the Commons in any event because there are government amendments to the Bill in your Lordships' House. They were in addition to the 286 government amendments put in the Bill in the other place, which doubled its length from 150 pages to 300 pages. Even then, they could not get it right, because they have come to this House and have already tabled amendments. It is all rush, rush, rush. They must ask themselves, “Can we do it?”. I have to say that it shows a level of faith in local government, the Electoral Commission, the weather and the parliamentary process which, in the words of “Yes Minister” is “brave”. There are 20 weeks to go, and we are on only the second day in Committee in your Lordships' House.
Do the Government have a risk analysis of this process? If not, they are not conducting public administration in the same way that most of the public bodies they are trying to abolish already do. On that assumption, I assume they have a risk analysis, and I ask them to share it with the House, perhaps in the speech that answers this amendment.
My amendment is a contingency measure. I will not argue about the referendum question; that is not the issue and we will come to that later. However, I want to make it clear, as I did last week, that this amendment does not stop the referendum taking place on 5 May. If all the things are in place, fine. The question we must ask is: what happens if they are not? What a disaster it will be if we get a bit close to the date and the Electoral Commission says: “Ten weeks to go and we have not quite got this ready”. We also have to ask ourselves about the administrative procedures that have to be gone through as issues are raised about some of the other processes of local government and the Electoral Commission. Let us leave all those aside for the minute: they are mechanical and administrative. What about the voters? How are the voters going to be dealt with at the last minute in this rush, rush, rush? There is never time to educate the public until such time as they are forced to make a decision. People want to get on with their lives—their work and their families—and they are not interested until the deadline comes. Then it will be: “Oh, I have not heard about this. What does all this mean? Does this mean that Parliament is going to change? What effect will it have? What about the misconceptions about the voting system?”. Time might well be needed by the Government to have a decent information campaign.
It is already known, following a series of YouGov polls commissioned by the Constitution Society a few months ago, that there are considerable problems about this idea. Most respondents do not understand AV. Its summary says that the yes and no votes are evenly balanced, but that exposure to information about AV increases the no votes. Perhaps that is the reason for the rush, rush, rush—because polling evidence indicates that the more people know about it, the more they are inclined to vote no. However, it has to be their choice and they must choose in a free way.
The polls also found that there are a number of widespread misconceptions about AV. Well, there are, and I think a few of those will be deployed in the coming days. The polls also indicated that the same arguments are commonly used to justify votes both for and against AV. In other words, I have only gone through half of the findings in summary form and it is clear that there is a hell of a job to do to explain to the public what all this is about. If it can not be done well before 5 May, that would be an absolute disgrace, because the Government could have plenty of opportunity to avoid having that problem if they accept my amendment.
Before 1997, some of us junior shadow Ministers were sent off to Templeton College, Oxford, for a bit of training. Needless to say, the generals did not go. Two things have always stuck in my mind from those sessions we had with ex-Ministers and ex-permanent secretaries. One was: “Always pilot a change”. That is something that would be well taken by everybody. The other one—and I cannot remember who said this without going back to my notes—was: “It is never too late to avoid making a bad decision”. I once said that to one of our Prime Ministers, by the way. The response I got across the table was: “This is not a bad decision”. The fact of the matter is that I was reminded about that. I am not saying that having a referendum is a bad decision, because if we are going to change the voting system, we have to have a referendum. I am not arguing about that. I am arguing here about the timing of it; 5 May is entrenched in the Bill. There is no get-out from that and we do not want a shambles. The Electoral Commission has already warned the other place and the Deputy Prime Minister has told a Select Committee there, though he did not give any details, about the factors that might cause a problem. However, it would be quite useful to have those teased out because we need to show the public, in case things do start to go wrong or even if it is a success, that these things were thought about beforehand.
Come the referendum, whatever the take of each side on this, that would not be any good. With the public’s misconceptions, there is evidence that we will need a decent education campaign because of what will be thrown on both sides of the argument. We cannot do that until the Bill has Royal Assent. After Second Reading, I realised that certain amounts of public expenditure can be used. Once the Government have secured a Second Reading, certain changes are triggered. But it is only after Royal Assent that the treasurers and accounting officers in local government and other institutions can say, “Hang on, this is really on”.
The Lord Speaker (Baroness Hayman)
I have to tell the Committee that if Amendment 5 is agreed, I cannot call Amendments 7 to 12 inclusive by reason of pre-emption.
Lord Hamilton of Epsom
My Lords, I support the noble Lord, Lord Rooker, on this amendment, not because I am completely relaxed about whether this referendum on the alternative vote is held on 5 May or later, because I am not. I think that there will be enormous confusion if the referendum is held on the same day as local elections. As the noble Lord, Lord Rooker, has pointed out, this is an extremely complex matter, which is not well understood by the electorate. Therefore, we need a special day. I am not too worried when it is after the local elections on 5 May, but it should be on a separate day. I know that this would involve £15 million-worth of public expenditure at a time of austerity. But this is a very important change in our constitutional arrangements and it has to be properly debated. The people of this country have got to understand what is at stake.
If the referendum is to be wrapped up in local authority elections with certain, say, Labour campaigners saying, “Vote for your Labour candidate, but vote against the alternative vote in the referendum”—the Conservatives would be doing similar—that will be extremely confusing to the electorate. Therefore, it is important that the referendum is held on a separate day. This is a radical and important change in our electoral system, and it should not be allowed to be muddled up in the local elections. I do not think that it will be satisfactory for anyone, whatever the result of the referendum, if it goes through while the electorate do not understand what was going on. We need a separate date. We need to debate it properly and to make absolutely certain that the people of this country understand what is at stake and understand the issues involved in whether we have an alternative vote system or not. That is why it should be on a separate date and why I am pleased to support the noble Lord, Lord Rooker, in his amendment.
Lord Tyler
My Lords, it would seem from what Members were saying at great length last week in a debate lasting nearly two hours, and again from what has just been said, that as a Parliament we have never had to face the prospect of two big decisions on the same day. I remind your Lordships—and I shall be interested to hear from the opposition Front Bench in a moment—that the previous Administration pushed through the referendum on London government and mayoral and Assembly legislation, with the exact same collision of votes on 7 May 1998. The noble and learned Lord, Lord Falconer of Thoroton, may like to comment on the following extract from a speech by his colleague Mr Nick Raynsford, who was then the responsible Minister:
“We are holding the referendum on 7 May deliberately to gain the benefits from combining the poll with local government elections. That will result in a considerable saving in public expenditure, which I would have thought all hon. Members would welcome. Separating the referendum date from the local election day would probably result in additional public expenditure of some £2 million to £3 million and could reduce voter turnout. That is not in the interests of democracy or of economy, and the Government do not intend to propose that”.—[Official Report, Commons, 19/11/1997; col. 380]
What was right for London is apparently not right for other parts of the country. Perhaps Members on the other side think that somehow the voters of Scotland and Wales are not capable of taking two quite distinct decisions on the same day but people in London are.
Lord Rooker
I never once referred to combined elections. That is not the issue as far as my amendment is concerned; I know that others in the group are concerned with this. My question is this: what were the relevant dates for that legislation? I know the referendum the noble Lord, Lord Tyler, refers to was for London only and not national, but how close to the referendum did the legislation start through the two Houses? That is the point that I am raising. I am not arguing against 5 May; I am just saying that if something goes wrong between now and then, my amendment is a lifeboat and we can still have the referendum.
Lord Tyler
I can answer the noble Lord, as it happens, because I have very good brief. That Bill started its progress through the House of Commons on 28 October 1997 and was not completed until well into 1998, so it is a very similar situation to the present one. I go a step further, which is why I hope we are going to get a contribution from the opposition Front Bench. Amendment 12 specifies that this referendum should take place on the same day as the mayoral and Assembly elections in London in 2012. What is right for the goose is surely right for the gander. How can we possibly argue, as Members opposite did for hours the other night—it seemed interminable—that somehow the Scots are not capable of taking this decision on the same day when London has done so in the past, and there is a proposal, which has been supported by at least some Members opposite, to do so again in 2012? I stand up for the Scots as a fellow Celt. I think they are quite capable of taking this decision on the same day, and I hope your Lordships’ House will take the same view.
Lord Elystan-Morgan
My Lords, there is a fallacy in the argument of the noble Lord, Lord Tyler. There are certainly many arguments for holding these elections on the same day as elections in Scotland, Wales and England, and there are many arguments against. My point is limited to this issue. Why did Her Majesty’s Government think for a moment that it was right to come to a final determination on this matter without consulting the Scottish Parliament and the Welsh Assembly? It seems to me, looking at it either with naivety or with remorseless logic, that it was either a case of negligence or a studied discourtesy. Which was it?
Lord Grocott
My Lords, the noble Lord, Lord Tyler, has missed the point of my noble friend’s amendment, which is characteristically sensible and clever. It in no way prevents the Government from having the referendum when they want to have it. It simply gives them, as my noble friend has expressed very clearly, another lifeboat. It would have been so much simpler if we had had an indicative referendum, as has already been said, because huge chunks of this document would not have to be debated between now and 5 May, if that is when the Government want to hold the referendum. Those would be matters to consider after the indicative referendum, but the House has decided not to go ahead with that. As my noble friend said, the choice is still there for the Government to take.
I put this to the Government in as gentle a way as I can. Quite often you put documents together before an election, although on this occasion the coalition document was put together after the election. This would not be the first Government in history to find that it was not possible to enact some of their intentions. That would not be a first in British constitutional history.
Lord Reid of Cardowan
My noble friend will have noticed the staunch support for Scottish wisdom given by the noble Lord, Lord Tyler, and I am sure that the nation is grateful for that, but if the noble Lord is actually looking at the wisdom of the Scots, will he look at the last time there was a dual election in Scotland, when there were local government elections, a referendum on first past the post for local government, Scottish parliamentary elections on the alternative vote and the criticisms afterwards? It was a shambles for which the Labour Government were rightly upbraided. That is precisely the point that is being made about the potential on this occasion.
Lord Grocott
I very much agree with my noble friend. We have so many different electoral systems—five already with one proposed implicitly in this legislation and another additionally proposed if and when we come to elect the House of Lords. Before long, one will need at least a first year’s study on the British constitution to understand the various electoral systems that are being simultaneously offered to the British public. That is something that requires serious attention.
We all understand the Government’s intention. Apart from financial reasons, I would like them to explain why it is so urgent to get this dealt with by 5 May. We recognise that all too often Governments do not get what they want. That is sometimes for very good reasons. Perhaps the Liberal Democrats know a little about this at the moment in respect of student fees. When that happens, the ideal position to be in is one of some flexibility, which my noble friend offers with this amendment.
I offer one thought. I had the honour of having the responsibility in this House of trying to schedule government business in a way that was, as far as humanly possible, acceptable to the four parties to the discussions—the three political parties operating independently and the Cross-Benchers. It is an extraordinarily difficult business to achieve satisfactorily. For the life of me I cannot see how this Bill, which has not had the pre-legislative scrutiny or proper consideration for a Bill of this size—which is actually two Bills because it will become the Act that delivers the referendum, should the vote go in favour of a change in the voting system—can be considered in the time available between now and next February. It is beyond me.
We are on page 1 and I will sit down soon lest I be accused of filibustering, which I am emphatically not going to do in considering this Bill. We have another 300 pages to go. We have three more Committee sittings before Christmas. We have a half-term break scheduled. There have to be two weeks between Committee and Report on the Bill, three days between Report and Third Reading and heaven knows how many exchanges of ping-pong between the two Houses. It is quite beyond me how that can be achieved. I have not done the maths but, even if we spent all the legislative days left between now and next February on this Bill—assuming we get through, let us say, five pages a day, which would be pretty good going at the rate we are going at present—I do not see how on earth this can be delivered.
If the Government are sensible, there will not need to be any vote. If there is any reason other than the alleged saving for having all these elections on the same day, please let us hear it. The only one that I have heard is the financial argument, which we must take seriously. Of course, the best financial argument of the lot would be the one that I would offer to the Government, which is not to hold the referendum at all. Perhaps we could have the figures on that just to show the probity with which I assessed these questions of public expenditure. If there is another explanation, let us have it, but in the mean time what is conceivably lost by having the flexibility that my noble friend is offering?
Lord Fowler
My Lords, I very much support what my noble friend Lord Tyler said. I think the noble Lord, Lord Grocott, gave away his game right in his last remark. I speak as a neighbour of the noble Lord, Lord Rooker, for goodness knows how many years in Birmingham. He is always unbelievably persuasive and I am quite often on his side, but not on this. We have here a bewildering number of dates, not just his: in addition, we have 30 June, 15 September, 6 October, 13 October and 3 May 2012.
I argue that there is a very positive reason for having it on 5 May, as proposed. I am a strong supporter of referendums, unlike the noble Lord, Lord Grocott, in what I take his view to be. Against the fashion I took the view that we would be much better served as a nation had we put the big European issues to the electorate right from the beginning in referendums. I said that in my first election manifesto of 1970, so I come to it as a supporter. Following that, however, I also believe that we should have the biggest possible turnout for such a referendum. The fact that 5 May coincides with other elections I see not as a disadvantage but as an advantage. Far more people are likely to produce a good turnout on that day than, say, for a separate election in September or October, let alone in 2012. It would obviously also be far more cost-effective; the extra cost of a separate election would be eliminated.
I cannot see the advantage of what is now being proposed. With all legislation the test should be what is in the interest of the user and the consumer. In this case the consumer is the elector, and I would have thought overwhelmingly that his interest would be very much to have it on the same day. He is much more likely to go out willingly on that day, and we will achieve a much bigger vote.
At this point it is worth remembering the evidence of the Electoral Commission to the Political and Constitutional Reform Committee. It is interesting because the committee specifically sought clarification of the commission’s position on the combination of a referendum with other polls. In 2002, the commission had stated that referendums on fundamental issues of national importance should be considered in isolation. Jenny Watson, the chairman, explained that the commission had reconsidered this view and had decided that the evidence was not conclusive enough to support its earlier position that a referendum should never be combined with another poll. According to the committee:
“Ms Watson said that the Commission had decided that on balance there were definite benefits from combining the AV referendum with other polls, especially because there would not be so much ‘voter fatigue, which would be the case if you didn’t combine,”.
That was the commission’s considered opinion against a background of scepticism on this position. I agree with that. I think it is a very strong case. The question is clear and the public are entirely capable of making up their minds on this issue, and it is a bit condescending to suggest otherwise.
Lord Brooke of Alverthorpe
The amendment is not about voting on the same day; it is about a contingency plan in the event of Parliament not being able to deliver in the timescale required to meet 5 May. I am in favour of a referendum, but it is very risky to move forward with the possibility that it could not be held because Parliament cannot deliver. Will the noble Lord address that issue?
Lord Fowler
The noble Lord has had to listen to the debate for only the short time in which we have been speaking to know that the attack is coming on several fronts at the same time. It is perfectly true that the noble Lord, Lord Rooker, stuck to that particular argument, but that has not been the only argument adduced. My argument is, counter to that of the noble Lord, Lord Rooker, that all power and effort should be devoted to having the referendum on 5 May because that is to the advantage of the public and the whole system. That is how we will get the biggest possible vote, and it is for that reason that I support the 5 May date. We would be quite mistaken to turn our back on it.
Lord Lipsey
Like many other noble Lords, I did not find it easy to get in here from where I live, in Wales, this morning. I regret that I did not see the groupings suggested for these amendments in advance, because we would have done better to separate the amendment proposed by the noble Lord, Lord Rooker, which would give us a contingency plan in case it was impossible to make 5 May, from the amendments that I and some other noble Lords have put forward, which suggest an alternative date. It is my view, which I shall argue again, that it is not right to have these referendums on the same day.
Before I come on to the aspect of that argument, I shall say a couple of words in response to the speech of the noble Lord, Lord Tyler, who is a great supporter of the alternative vote—and I am glad to have common ground with him. I did not take it terribly well when he said that the debate on this has already been interminable. It is a bit odd to say that a debate has been interminable as you jump to your feet to make a substantial contribution yourself. Leaving that to one side, I believe that this is a desperately important matter, particularly to the people of Scotland and Wales, who have some representatives on the Benches opposite. To say that we have had an interminable debate—I think that we had one of about an hour and a half the other day—suggests that this Government are uninterested in concluding debates in a civilised and thorough manner and merely want to push this Bill on to the statute book with a sort of droit de seigneur because they won the general election. So I thought that was sad.
I also did not find the noble Lord’s 1998 analogy terribly convincing. Yes, there were two separate polls in London in 1998, but they were both on local government matters—elections to the council and changes in the structure of government in London. People’s minds were on local government at that time, and it is not unreasonable to expect a combined vote on that. But here you are having local government elections at the same time as you debate what system should be used for national elections. I certainly do not underestimate voters’ intelligence; it is when Governments try to confuse them that voters get confused. There could not be any recipe more confusing to the voter than combining a referendum on what system should be used for general elections in future with one on who should run their local council tomorrow. That is a very sad combination and, on this side of the House, we have tried various ways to skin the cat and to avoid it.
The other topic that will come up on other amendments is cost; it is the only substantial argument put forward by most of the speakers for the Government for combining the two things. I except the noble Lord, Lord Fowler, from that charge. On this matter, I have just received a most helpful and polite note from the Leader of the House in response to the promise that he made last week to set out the cost in full. It sheds light on one confusion that arose last week, when nobody knew whether it would save £15 million, or whether £30 million would be saved, by having the two things on the same day. I shall paraphrase the noble Lord’s letter, and no doubt he will interrupt if I get him wrong; he said that it would save £15 million, because it would cost less to have the referendum on AV, and that it would save £15 million in addition because it would cost less to have local government elections if there was an AV referendum. My sense is that an official has sensibly not tried to get too sophisticated in the analysis and has attributed half the cost to one thing and half to the other.
That is a great clarification for which the House will be grateful. It enables us to concentrate on the wider figure. I am not going to have a discussion on whether £80 million, £50 million or £30 million is a very large sum of money. My experience is that many people do not distinguish the number of noughts on the end of a figure anyway. If I had £1 for every time the Guardian has said £1 billion when it means £1 million or £1 million when it means £1 billion, I should be rich enough to pay for the referendum out of my own back pocket.
There is a curiosity highlighted by this. If it is worth having such a referendum at a cost of around £80 million, surely it is right to pay an extra £15 million—less than 20 per cent of that—to have a referendum that really means something and settles the argument one way or the other once and for all. Penny-pinching to the tune of £15 million would not make great sense and is in danger of dumping us with an illegitimate referendum. The reality, as every Member of this House knows, is that it has nothing to do with cost. The Government want it on that day as part of a deal. The Lib Dems, wrongly in my view, think that they are more likely to win the referendum if it takes place on 5 May. It has nothing to do with cost, which is a convenient stick to beat opponents with.
So, do we think that combining referendums with local elections is a good thing? It saves money, which is a good thing. Why then, in Wales, is there to be a referendum in March and another in May? Why not combine those two? It would save money. That shows again the vacuity of the cost argument. It is not about cost. That is why the Government are prepared to pay for a referendum on Welsh legislative powers in March separate from the one in May. It is about the view of Lib Dem members of the coalition that they are more likely to win on 5 May and the Government’s view that the Lib Dems can have what they want, as long as they—the Government—get their boundary changes and a reduction in the number of MPs that will increase their advantage in the House of Commons as a result.
This is a crude political deal justified to this House as it was to the other place on arguments that have no substance. I hope that noble Lords will not back the Government in this attempt.
Baroness Oppenheim-Barnes
My Lords, first, I am a little seduced by the amendment, although I think it is a little sneaky and probably has an overtone. Secondly, I am provoked by my noble friend Lord Fowler, who said that he wishes there had been a referendum before we joined the EEC. I have to say that had there been such a referendum we would not have joined. Thirdly, I support the remarks of my noble friend Lord Hamilton. It is the importance of the occasion and the importance of the outcome that concern me. If there is any doubt at all that that there could be confusion—I am not being patronising about electors—as a result of holding both votes on the same date, I would regret that very much. At all times we should consider the correctness of the outcome. Whichever outcome we may want, it is a matter of what the electorate want.
Lord Stoddart of Swindon
I agree with the noble Baroness and wish to emphasise the fact that changing the system of election does away with a system that we have had for hundreds of years. The Bill proposes to sweep that all aside on the same day as holding local elections. It is an outrageous suggestion. Changing the electoral system is a one-off instrument that will change voting in this country forever. Yet we will be asked to have a discussion of this huge constitutional change in the midst of local elections.
I was a member of a county borough council for 18 years and leader of it for a number of years. We treated our elections seriously. We spent months preparing a manifesto for the elections and went out and fought the elections on the basis of the manifestos. We in the Labour Party, and in the Conservative Party, argued our case. We went around canvassing for our policies. We spoke through loudspeakers on corners of streets to convey our message to the electorate—although I do not think that they do that now. What will we do if, first of all, we have to convince electors that they should vote for our policies—whichever our party—and, at the same time, ask them to make a decision about a vital and profound alteration to our electoral system?
As I have said before, this is an outrageous proposal which treats the electorate with contempt. The electorate are being asked to change something that they have had for 100 years. They understand the system and have got used to it. In times gone by—certainly something has happened since—the electorate were producing electoral decisions based on a very high turnout, sometimes 75 or 80 per cent. Here we are asking them to change the system without a proper discussion. This system is complex—it is a change that people will not easily understand. People deserve to be informed of exactly what results will appertain from the change and be told exactly how it will work before they can make a decision. That cannot be mixed up with local elections.
I cannot understand why the coalition is bringing this forward. It has time to make a change. Although I do not agree with the AV system, it would probably do better if it had a separate referendum at a different time so that people could be asked to understand what is being proposed. If the Government are unable to change their mind on holding the referendum at the same time as other local and regional elections, they will regret it very much. I urge them to change their minds.
Lord McAvoy
My Lords, I support my noble friend’s amendment. It gives me, and others, another chance to state yet again that, apart from the occasional speech, I do not find any great resistance among the Labour ranks to the actual fact of holding a referendum. There will be people who are very principled against it and I respect that. However, it has to be judged against the majority. I do not think that my noble friend’s amendment is a destructive or wrecking amendment, designed to defeat the Bill and bring the Government into chaos—although it would not take much, right enough. However, that is another story. The timing of the Bill in relation to other matters this week might split this collaboration Government. Supporting this amendment does not necessarily mean being against the referendum. I would look forward to a referendum and would participate strongly against AV. That is everybody’s right if and when it happens. I make it clear again, especially for the benefit of the Liberal Benches, that I am not against the referendum. Let the people speak and I will do my best to influence them.
Mention has been made of Scotland. The noble Lord, Lord Tyler, yet again aggressively mentioned what happened in Scotland. Frankly, you would need to have been there to see the shambles. It has been indicated that this is a simple thing. There was a sly reference, suggesting that, by expressing doubt about the efficacy of the referendum, we are somehow casting aspersions on our own people. The Scots are pretty good at insulting other people; we are not too bad at insulting our own as well, but do not let anybody else insult us. One had to be there in May 2007. I spoke about this last week so I will not go into too much detail about it.
I find myself being tempted down the road of dealing with the Liberals again so I will spend just a minute on them. The noble Lord, Lord Tyler, uses the word “internal” about this debate. My God, this is only a very early stage. Last week, when we discussed the first group of amendments, the only Liberal who spoke was the noble Lord, Lord Rennard. The Liberal Benches were otherwise silent. There was no participation, scrutiny or involvement and there were no interventions—nothing. Is that what this House is here for? There might have been an occasional intervention but they were so fleeting that I do not remember them. I see the noble Lord, Lord Tyler, indicating disagreement. I did not hear or see much involvement from the Liberal Benches last week. I think there was one intervention from the Conservative Benches from the only noble Lord who happened to be there at the time—the noble Lord, Lord Hamilton. If this House is a revising Chamber, as I strongly believe it is, where was the participation? The Liberal Peers should look to their own house on that.
There was no consultation with the devolved Assemblies on holding the referendum on the same day. Before I am accused of repetition, that cannot be said often enough or sincerely enough to get across to the Government just how insulting that is held to be in Scotland. There was no consideration, no consultation and no involvement. Scotland was somehow tagged on as though it was a type of poodle at the end of Westminster. I say that although I am no Scot nat. It has been badly handled and it indicates what has been disregarded in the rush.
The noble Lord, Lord Fowler, made some points; frankly, they could be telling. I do not dismiss in any way what he said. They are relevant matters, worth discussing. However, they are made inoperable in this sense. I have here the business and minutes of proceedings for this House. The forward business for Monday 20 December of this year—not next year—says that it is expected that the Committee stage of the Parliamentary Voting System and Constituencies Bill will conclude. That is the rush to judgment, referred to by several of my noble friends, which we could all collectively regret, although I hope not. I do not want to cite the Dangerous Dogs Act, which many noble Lords will recall. However, in response to the noble Lord, Lord Fowler, the rush to judgment is dangerous and it should not continue.
My noble friend Lord Rooker has mentioned the lifeboat syndrome, and that is right, because this amendment would give the Government a chance to think again. I keep coming up against a brick wall in the sense that the logical, rational side of me cannot grasp why there is this rush to legislate—a 300-page Bill being rammed through the House of Lords in a matter of weeks. Then the politician in me asks, “Why? There’s got to be a reason”. And once again we come up against the reason: the reason is political expediency. The Conservative side of the collaboration Government are desperate to get their boundaries Bill, and the Liberal part of the collaboration Government are desperate to get a referendum Bill to save their party from destroying itself even more than it is going to do this week. That is political expediency and it is to be regretted. I hope there is a legitimate response to the amendment of my noble friend Lord Rooker.
Baroness Hayter of Kentish Town
My Lords, I would like briefly to follow up the wise words of the noble Baroness, Lady Oppenheim-Barnes, when she asked the question: how important is this? It seems to me that the time taken for debate is a reflection of how important we think this issue is—although I dare say she and I would have perhaps agreed a generation or two ago on behalf of the suffragettes, had our predecessors moved more quickly to give them the vote. It seems to me that, on this issue, we need a thorough discussion about systems of voting and a consideration of how important this is with regard, for example, to elected police commissioners. I am unsure exactly what—
Baroness Oppenheim-Barnes
I was not making that point at all. The point I was making was not about how the case for or against the referendum was being rushed; it was simply about the date of the decision.
Baroness Hayter of Kentish Town
I apologise if I have misunderstood, but it seemed to me that the word “important” was of great significance to this issue, which will have long-term consequences for the way the whole of our political system develops—probably much greater than, for example, elected police commissioners. As I was going to say, however, I would be interested to know what system they are to be elected under—maybe an additional system to add to the ones we have got.
The importance of this issue is greater than considerations of cost—not only because it is not a once-in-a-generation but a once-in-three-generations decision, but also because of the unintended consequences. The consequences might be desirable or they might be undesirable: how we as political parties—which is most of us in the House, although obviously not all— do our politics; how we organise; how we campaign; how we select candidates. All those sorts of issues have yet to be thought through. I was very against my own party’s decision—I am very sorry; I see that I have upset the Front Bench in front of me—to bring in a closed voting system for the European elections. I thought they were wrong, I told them they were wrong, I threatened that I would not vote Labour if they brought that system in. But the women who had called for the vote for women for so long would never forgive me if I did not vote, and I knew that my hand would drop off if I did not vote Labour, so eventually I did. But I thought that the system was wrong, and I maintain it was wrong. What is important, however, is how that has made a difference to how we do our politics. So even if I was wrong and the system chosen was the perfect one, it had consequences for the way that we campaign, for the way that we select and, indeed, for the power of the parties. I think that it gave far too much power to parties in the selection of candidates. We had not had time on that occasion to think through and talk about it. I believe that my party was wrong in doing it at that stage.
However, before we cast our votes in the referendum, I believe that we need a debate on how these different systems have worked. How have the Welsh and Scottish systems worked? How has it worked in Northern Ireland, where there has been a local government system for a long time? How is the European system working? We need that debate and therefore it seems to me important to give us time before we come to this decision. We need time to debate the matter in this House—although we are privileged and that is a luxury—but even more important is to make time for the electorate to consider this important question before we ask it to make such an important decision.
Lord Howarth of Newport
My Lords, I fear that a number of important issues are all too liable to become confused in the minds of electors on 5 May if the referendum is held on the same date as the local elections. The Government are understandably preoccupied with advancing their policy of a referendum in which the people of this country will be offered a choice as to the future system of elections to the House of Commons. It is a profoundly important issue. Also to be held on that day are local elections, which are profoundly important as well. We ought to keep the interests of local government in the forefront of our minds, as there is a question about respect for local government that we should consider very carefully. However, perhaps I may come back to that point in a second.
Whichever side of the argument we may be on—in favour or against the alternative vote system—and whichever side we are on in the argument about whether there should be some sort of change to the system of electing Members of Parliament, I think we all agree that this is a momentous issue of the utmost importance. It is also an issue that will be considered only on very rare occasions in our political life. I believe that there is a compelling case for keeping the nation’s deliberations on that issue distinct from the deliberations on other important issues that are to be put to the vote. Therefore, in the interests of clarity and wise decision-taking, and, as my noble friend Lord Rooker put it to us, in the interests of simply not rushing the process, there seems to be a very strong case for holding the referendum separately from, and later than, the local government elections.
The noble Lord, Lord Fowler, argued in favour of holding the two elections on the same day precisely on the basis that the referendum is extremely important and that it would be most unsatisfactory if it were to be determined on a low turnout. However, I put it to the noble Lord that there is a better and more reliable means of ensuring that there is an adequate turnout, which is to introduce a threshold requirement into this legislation. That is a debate for another day but I think we shall have that debate. Personally, I hope very much that Parliament will conclude that we should not change anything so fundamental in our constitution as our system of elections to the House of Commons on a derisory turnout, that we should insist on a requirement for a minimum percentage of those entitled to vote and that, if that minimum percentage is not reached, there will be no change to the system. I think that that is a better way to secure the entirely valid objective of the noble Lord, Lord Fowler.
Perhaps I may come back for a moment to the question of respect for local government. One sadness of my political life is that in all the years that I have been in one House of Parliament or another I have seen local government disparaged and demeaned, and, if I may say so, that has been all too characteristic of Parliament and of Governments of all parties over a long period. We are at risk of showing insufficient consideration and respect for the validity and importance of the local elections on 5 May next year. One understands why in the mid-1970s central government felt that they had to move to restrict some of the more exciting activities of local government. Indeed, one Secretary of State said that the party was over.
But the Treasury—above all, the Treasury, I believe—exploited that opportunity quite ruthlessly. Expenditure in this country and power in this country are, in a way, a zero-sum game, and the Treasury was deeply resentful of any fiscal independence on the part of local government and of any independent rights that local government might have to raise money. So we saw increasing restrictions. We saw capping. We saw limits on borrowing. We saw an increasing tendency of government to ring-fence the grant to local government through specific grants. All of this has been profoundly bad for our democratic culture in this country. If there is an alienation from our politics in this country then I believe that, in important measure, it stems from this source. Therefore I think that we should always think very carefully about the standing of local government, the dignity of local government and, indeed, the independence of local government to act as a check and a balance within our constitution and within the power structure of this country.
To muddle up the issues on 5 May next year could with some justification be interpreted as cynical and as far too characteristic of the habitual attitude of central government and, I fear, of Parliament to local government. For that reason also, therefore, it would be unfortunate if the two sets of elections were to be held on the same day next spring or early summer. However, the amendment in the name of my noble friend Lord Rooker is not prescriptive in this particular matter. It allows a margin of flexibility. It allows the Government to reflect carefully on whether it is wise to hold the referendum on the same day as the local elections. As my noble friend said, it also provides a contingency margin so that, if we do indeed find that the preparations cannot be advanced with sufficient speed and the conditions in which the referendum would be held would be unsatisfactory, the Government can with dignity adjust the date and we can still go ahead with the referendum on this extremely important issue, but we can do so in a sensible set of circumstances. So I hope that the House will be willing to support my noble friend Lord Rooker if he presses his amendment this afternoon.
Lord Soley
My Lords, I rise with one intention only: to ask a specific question of the noble Lord, Lord Strathclyde, and ask him to deal with it in his response. In asking it I should declare an interest as one of the political panel drawn from all the political parties, from both the House of Commons and the House of Lords, who act as advisers and information givers to the Electoral Commission.
At the moment the Electoral Commission believes that it is possible to hold these elections on joint dates without problems. Along with everyone else, however, it acknowledges—I think this was the key point made by my noble friend Lord Rooker—that problems could arise; and if they do arise, that will have a major impact on how well the referendum—or indeed the elections, but particularly the referendum—is held.
If in the course of events the Electoral Commission decides that it is not able to conduct a referendum in a manner that is acceptable to both national and international standards, will the Government put off the referendum to another date? That is an important question and I hope the noble Lord will address it with some care.
Lord Campbell-Savours
My Lords, I want to follow that specific question. I am pleased that my noble friend was able to intervene before me. It is not just a question of whether the Electoral Commission would recommend that the date be changed; it is whether the Government for other reasons might wish to change the date of the referendum. I would remind the noble Lord, Lord Strathclyde, that in 2001 a Government had to defer elections due to the foot and mouth crisis. All over the country, returning officers were arguing with their local authorities that it would be impractical, because of problems at polling stations, to carry out polling on that particular day. In addition to the question asked by my noble friend, I would therefore like to know what would happen in those circumstances.
In Clause 4(7) of the Bill there is reference to,
“Section 16 of the Representation of the People Act 1985 (postponement of poll at parish elections etc) does not apply to any polls taken together under subsection (1)”,
and subsection (1)(b) refers specifically to,
“a local referendum in England”.
So I think that we should have some assurance about what would happen in the emergency circumstances that might arise.
I had to leave the Chamber for personal reasons during the course of a couple of speeches, but I understand that reference was made to our alleged inconsistency in these matters. I would like to draw the House’s attention to the then Constitutional Reform and Governance Bill which was considered by Parliament earlier this year—a Bill produced by the then Labour Government. Under Clause 29 of that legislation we find my noble friend's amendment. Under “Referendum on voting systems”, it states:
“A referendum is to be held, no later than 31 October 2011, on the voting system for parliamentary elections”.
In other words, we showed in our Bill the flexibility that my noble friend seeks to establish in this Bill. Our position is perfectly consistent with the position that we took earlier this year.
I am very pleased to see a large number of Cross-Benchers in the Chamber today. The other day we debated an aspect of this Bill, when some of us were a little concerned that the Cross-Benchers had perhaps not been able to hear the debate. That is the insufficiency of consideration that has been given to the effectiveness of the electoral system proposed in this Bill. There is a lot of evidence out there to suggest that the optional multi-preference election system under the alternative vote system—which applies not in Australia generally in its federal Parliament arrangements, but only in one state, Queensland—is flawed. There has been a lot of academic work to prove that. In later stages of the Bill I will bring forward evidence, on the basis of international evidence which we have been able to collate, to dismantle systematically the case made for that system.
Even this morning I received a paper on STV which applies under the Scottish system for local elections. The interesting thing about STV in Scotland is that when a by-election takes place there it triggers an AV election. In other words, within the United Kingdom we have examples of AV operating which have not been fully considered by Parliament. The noble Lord, Lord Rennard, drew my attention to that the other day—he nods his head. What happened in those 32 by-elections in Scotland will be of great interest to the House when we produce that information. This morning I received a document, whose authors are Professor David Denver of Lancaster University, Dr Alistair Clark of Belfast and Dr Lynn Bennie of Aberdeen, on the operation of the STV system in Scotland—not on AV as it applies in individual constituencies when there is a by-election.
More work needs to be done on the electrical system proposed in the Bill before Parliament finally decides what the system should be. Furthermore, in the event that we proceed with the system proposed in the Bill, there should be time for a full public debate before any referendum takes place within the United Kingdom.
Lord Rennard
The noble Lord seems to suggest again, as have a number of noble Lords, that there simply has not been sufficient time to consider the relative merits of electoral systems and in particular AV. Is the noble Lord aware that a royal commission recommended the adoption of the AV system in 1910; that an all-party Speaker’s Conference made the same recommendation in 1917; and that the House of Commons voted for the introduction of the alternative vote system in 1931? Does he consider that this is perhaps the only place where 100 years is deemed inadequate time for consultation before voters are allowed to say how their representatives should be chosen?
Lord Campbell-Savours
That is the intervention of someone who has not done all his homework. It is true that AV was considered, but not in the form that is proposed in the Bill. That is at the heart of my argument. It is a different system. There are three major systems available under the alternative vote and the historic debate in this country has taken place on the Australian system, where it is compulsory to vote. Indeed, if you do not exercise all your votes, under the Australian AV system, your vote is discounted, not even taken into account.
Lord Howarth of Newport
I am very grateful to my noble friend, who has certainly done his homework and research very carefully indeed. Have I been advised correctly that the type of AV system that the Government propose should be used for elections to our House of Commons is found elsewhere in the world only in Papua New Guinea and Fiji? Has my noble friend, in the course of his research, found any lessons of more general application from those two laboratory experiments, which may be useful for us to think about as we consider an appropriate system for use in this country in the future?
Lord Campbell-Savours
I have identified those areas, but I think that the more relevant results are those in Queensland in Australia and in Scotland, which we will go through in some detail as we proceed on the Bill.
Lord Campbell-Savours
As I say, I have spent the last weekend talking to people throughout Scotland about how it operates and it is very surprising to see how it operates.
Lord Grenfell
My Lords, may I have the temerity to point out to the noble Lord, Lord Rennard, who correctly told us when it was last discussed, that a lot of us here, and, indeed, in the country, were not around at that time?
Lord Campbell-Savours
At this stage, I shall resume my seat and await later opportunities to discuss these matters.
Baroness McDonagh
I thank noble Lords who have come back to this issue of confusion. Can we knock on the head, once and for all, the suggestion that we are calling people stupid? People are not quite as obsessed by politics as we are and I always thought that it was the role of this House to look at legislation, to look at how it would work out in the country, in the community, in our experience, and bring back any concerns before legislation is passed. That is what we are doing. We are not, for a moment, calling anyone stupid. On Tuesday, the noble Lord, Lord Strathclyde, thought that in changing his parliamentary constituency in Scotland, he had also changed his European parliamentary constituency. I would not, for a second, call him stupid just because he does not appreciate that Scotland has only one European constituency.
I take this opportunity to ask about the 12 cities that are holding a referendum for mayor. I understand that some might be put off until 2012, but will the Minister tell us exactly where we are on that and, indeed, when the localism Bill will enter the House? Before I move off this issue of confusion, I say only that, if we are not careful—this is a serious point—we could end up having more spoilt ballot papers than the majority of votes, either for or against, under the alternative vote referendum. Given the legality of the Bill, there will be deep problems.
Who are we expecting to convey the arguments on the doorstep, if we proceed with an election in May? I would like to see anyone here get together a group of councillors facing re-election. These people are now going through very difficult times, having to cut something like 30 per cent of their budgets over the next four years. There will be serious cuts in adult services, child services and street cleaning, and some people may be moving to fortnightly waste collections. Any idea that you are going to knock on the door and explain that to the public and then say, “By the way, let’s have a chat about the alternative vote referendum”, is not living in the real world. I would like to be a fly on the wall in a room when anybody here attempts to do that. Without people on the ground being active in campaigns, be they for referenda or elections, they are not democratic election.
It seems rather ironic to have a referendum on our democracy at a time when there are elections in some parts of the country and not in others. By that very fact, you will skew—
Lord Tyler
Would the noble Baroness like to turn to Amendment 12, which is in this group? As I understand it, she is proposing that this referendum should take place on the same day as the mayoral and London Assembly elections, so she is now arguing against her own amendment. Will she come to that amendment in due course?
I know the noble Baroness has been extremely influential in her party. Does she recall that on a number of occasions her Government decided to have a general election to the House of Commons on the same day as local elections? Were those not the circumstances that she is now criticising?
Baroness McDonagh
I thank the noble Lord. He is right, and I never have a problem saying when I am in the wrong. When I laid the amendment, I did so to give us more time to debate it. I think the noble Lord is quite right, and I am happy to withdraw that amendment. The noble Lord, Lord Fowler, said that the fact that a number of us are tabling different amendments is causing confusion. If the Benches opposite want to join us and support either Amendment 5 or Amendment 6, I would be happy to withdraw all my amendments, and I thank the noble Lord for his intervention.
I think it is ironic to have a referendum on democracy on a day when we are having some elections and not others. Not having an election in London will depress the turnout, and there will be a variable result across the country. Therefore, I will support any amendment not to have a referendum on the same day as any other election, and I will appreciate answers to the questions I asked.
Lord Snape
My Lords, I rise briefly to support my noble friend Lord Rooker in his amendment and to speak equally briefly to the amendment standing in my name and that of my noble friend Lady McDonagh. I congratulate the noble Lord, Lord Tyler, on his great debating point. I thought he showed enormous courage by making it. Having just been blown out of the water by my noble friend Lord Lipsey, to bounce back so quickly indicates a degree of perhaps reckless courage, but courage nevertheless.
The noble Lord, Lord Rennard, intervened to tell us what took place about AV in 1911 and subsequently. I have watched the career of the noble Lord with some interest. He has been better at fixing by-elections than at participating in them in his time as chief executive of the Liberal Democrats, but let us bring him bang up to date so far as AV is concerned, and particularly as far as your Lordships' House is concerned. As recently as 1998, AV was denounced as “disturbingly unpredictable” by no less a personage than the late Roy Jenkins. I cannot claim any close association with Roy Jenkins, although I was his Whip in the 1970s, and a pretty tough job that was, but I appreciate that he commanded enormous respect in both Houses of Parliament.
I want to congratulate the noble Lord, Lord Fowler. I know he is a notable personage in the Conservative Party, but his was the first Back-Bench speech I have heard in favour of this Bill. The Conservative Party normally sits mute during the passage of this legislation because it knows full well what it is about. I do not think I am betraying any secrets in saying that the noble Lord, Lord Fowler and I had a long and friendly parliamentary relationship in the other place. Now that we can both escape from the wrath of our respective activists, I can say that we were paired for some years in the other place. I never knew he was a secret referendum addict during that time—not that it would have made any difference, of course, but I thought that his speech was at least supportive of this Bill.
I do not want to delay the House unduly, or to repeat anything that I said in debates last week. However, on AV and its possible complications, I think the noble Lord, Lord Strathclyde, who will reply to this debate, owes the House a detailed explanation as to how exactly voters—and particularly the Scots—will be able to differentiate between the various elections and look at AV as well. He shakes his head: as a Scot, I know he would be delighted to tell me.
Actually, I thought this debate would be replied to from the government Front Bench by the noble Lord, Lord McNally, so I have a proposition to put to him which I hope his noble friend will pass on. The noble Lord, Lord McNally, and I have one thing in common. He used to represent my hometown of Stockport in the Labour interest in those days, before apostasy became fashionable. If the noble Lord, Lord McNally, believes that the alternative vote system is a simple one, and that we are being condescending and patronising to the electorate by saying it deserves a proper and full debate and a date on its own to be voted on, let me issue this challenge. I invite him to walk with me through the streets of Stockport next Saturday morning and ask two questions of anybody we come across. First, are you in favour of the alternative vote system; and, secondly, could you tell me what it is? Perhaps we could ask a third question as well: would you mind accompanying us to watch Stockport County? That is where I will be heading.
I do not want to extend that same invitation to the noble Lord, Lord Strathclyde, because I suspect he is not a round ball man. However, if he would pass the invitation on to the noble Lord, Lord McNally, I would be grateful. If he could tell your Lordships’ House—all of us, and particularly the Cross Benchers—how it is possible to make such a fundamental change to our electoral system on the same day as there are numerous other elections taking place, without causing massive confusion from one end of the United Kingdom to the other, I would be even more grateful.
Baroness Butler-Sloss
My Lords, may I ask the Leader of the House a practical question? Having sat through the debate on Amendment 5, which has lasted now an hour and 20 minutes, and bearing in mind that there is a great deal more of this Committee stage, is it actually practical for the Government to have 5 May as the date for this referendum?
Lord McFall of Alcluith
My Lords, I support the proposition of my noble friend Lord Rooker. When I came into this House a couple of months ago, I was told very quietly that this is a reflective Chamber, and we take our time here and mop up the mistakes made in the House of Commons by looking at Bills in a detailed way. If there ever is an opportunity to caw canny, as they say in Scotland, I think it is this amendment today. My noble friend Lord Rooker said it would not change anything; it would still give the Government freedom to decide when to have the referendum. When I participated as a very keen observer in the Scottish Parliament elections in 2007, in the constituency across the River Clyde from me there were 1,600 discarded and spoiled votes. The majority of our win was less than 100. The SNP then went on to govern Scotland as a result of a shambolic election. I spoke to the returning officers, and they said that it was done too quickly: that too many pressures were piled on them and that situation was the result. As my noble friend Lord McAlvoy has said, the debate here will end on 20 December until next year. All that administrative stuff has to be undertaken after the legislation has been passed. I fear that we could have another shambles as a result.
There is time for us to tell the Government that we can slow down. This is a radical Government in terms of the welfare reforms that they are implementing. A couple of months ago, the Chancellor stood in the House of Commons and pulled £17 billion from the hat. We do not know where those welfare reforms will hit. We know that there is a child benefit threshold for higher rate taxpayers. But last Thursday, the Treasury sneaked out a report stating that another 100,000 people will be taken into the higher rate tax threshold because it has been lowered by £1,400. As a former chairman of the Treasury Select Committee, I say that the problems are piling up for this Government and that they will be answered in perhaps a year or 15 months’ time.
It was the same in the House of Commons when the then Chancellor who went on to be Prime Minister abolished the 10 pence tax rate. I remember saying, “When you do anything in the tax system”, as noble Lords know, “there are always winners and there are always losers. Have you thought about the losers?”. At the time, the Government did not think about the losers. I suggest that there will be losers in the radical legislative proposals that this Government have put forward and that the questions will beg answers in one year or more.
Some problems are being played out at the moment; for example, tuition fees. I am a good friend of the Business Secretary, Vince Cable, but to say that he is standing on his head in terms of tuition fees is an understatement. My former friend Ann Widdecombe has shown us something on “Strictly Come Dancing” that Vince has not done on the tuition fees—simply because the problem has not been thought out.
My noble friend Lord Donoughue was in Downing Street with Jim Callaghan and has written an excellent book. He said that Jim Callaghan as Prime Minister had a “maybe man” in Downing Street. The Government might have had a policy, which they were going to implement, and the “maybe man” said, “Hold on. What are the implications of this?”. This is a “maybe man” moment in this Chamber, so that my noble friend Lord Rooker’s amendment gets the opportunity to be reflected on and the Government do not run headlong into a shambles of their own making.
Lord Falconer of Thoroton
My Lords, this is the sort of opportunity that the Government should take. My noble friend Lord Rooker’s amendment is modest and sensible. He is saying that it would be possible for the Government to have the referendum on any date between 5 May and 31 October 2011. He is not addressing the combination issue; nor is he addressing how long it would take to have proper debates. He is saying, “Give yourselves some flexibility”.
There are obviously two reasons for flexibility. The first is in relation to the administration of the election. In relation to the administration of the referendum, the Electoral Commission believes that,
“on balance … it should be possible to deliver the different polls proposed for 5 May 2011”.
I am quoting the chairman of the Electoral Commission when giving evidence to the Scottish Parliament. It is to be noted that that conclusion, she says, is expressly contingent upon “the key practical risks” being “properly managed”. The Electoral Commission has several times repeated that,
“the rules on how the referendum will be conducted must be clear from at least six months in advance”.
We are now less than six months in advance from the date of the referendum. It has added that,
“provided the Bill receives Royal Assent in time to allow a referendum period of at least 10 weeks, there will be adequate time for the Commission to register campaigners and designate lead campaigning organisations, and for campaigners to put the arguments to voters”.
Put neutrally, it is pretty obvious that there is a significant risk that the administration will not be ready by 5 May 2011. That should be looked at in the context of the Government not having consulted, before they chose 5 May 2011, either the Scottish Parliament or the Welsh Assembly. The Scottish Executive expressed the view that holding the referendum on 5 May 2011,
“shows a lack of respect for the devolved administrations”,
and,
“undermines the integrity of elections to the Scottish Parliament”.
As everybody knows, the Welsh Assembly Government are likewise opposed to holding the referendum on the same day as the Assembly elections.
The Select Committee of this House published its seventh report of the Session 2010-11. It was printed on 10 November 2010 and its cross-party unanimous conclusion was:
“Given that the Bill was introduced in the House only six months before the proposed referendum date, there is a danger that these deadlines will not be met”.
The obvious and sensible conclusion for the Government is to give themselves leeway if they cannot meet the deadlines, either because of organisational issues or issues in relation to scrutiny. A Government who say no to that are a Government in their early days. If they were more sensible, they would say, “Yes, I see the force of the argument and we will agree to that”. If the noble Lord, Lord Rooker, pushes the matter to a vote, we will support it.
Lord Strathclyde
My Lords, we have had another series of interesting debates, largely on the same issue that we discussed the other night—the question of the date. Noble Lords who were there will have recognised that many of the issues that were raised last week were raised again today. I make no great criticism of that. It is inevitable in the early stages of discussing a Bill. The only surprise is that nobody, in an hour and a half of debate, mentioned a subject that was raised several times last week—that of the royal wedding. So as far as I can see, we have moved a great step forward over the course of the past week.
The debate really divided into three groups of speakers. First, there were those who were against the amendment and in favour of the Government’s proposal. Secondly, there were those like the noble Lord, Lord Rooker, who sensed that the Government were doing the right thing in offering a referendum but that they have not thought through all the various contingencies and needed some help and support—the word “lifeboat” was used and that sort of language. And thirdly, there were those like the noble Lord, Lord Grocott, my noble friend Lord Hamilton, and one or two others, who were opposed to the referendum and opposed to AV, and they also would support the amendment.
Lord Campbell-Savours
There is another group as well. There is a group of us who passionately support a reform of the electoral system.
Lord Strathclyde
Yes, there is a fourth group which supports a reform of the electoral system but not this reform. But this amendment is about the date, and all those who will support the noble Lord, Lord Rooker, if he presses it to a vote, have understood that by accepting this amendment, in practice the referendum cannot take place on 5 May. Amendment 5 does not specify an alternative appropriate day. Setting the date in the Bill, as we have done, gives certainty to those involved in the planning and campaigning. I could not help thinking during the course of the debate that if the Government had published a Bill with no date, noble Lords opposite would be the first to get up and say, “How outrageous this is. How can anybody campaign? This is the Government making it up as they go along”.
We decided on 5 May because it is the best date. It is when 84 per cent of the population will already be going to the polls. Or I should say that 84 per cent of the population will have the opportunity of going to the polls—the noble Lord, Lord Foulkes, is right to admonish me on that. I made the argument last week and I make it again: it will save us a great deal of money—something like £30 million—if we go ahead on the day that we have decided.
The noble Lord, Lord Lipsey, said that people will be confused. There is a lot of outrage in the House today about this sense of confusion. As my noble friend Lord Tyler said, people have no difficulty in voting in local elections and general elections on the same day. In this House, we are used to making lots of decisions every day, but the poor people outside are not so blessed with our brains and will find it much more difficult. I think not. People are well capable of deciding who should represent them in terms of local government, the Welsh Assembly or Scottish Parliament. They are able to decide on a simple yes or no whether they wish to have AV. I have no truck with these arguments about confusion.
The noble Lord, Lord Elystan-Morgan, made a point that was echoed by one or two other noble Lords including the noble Lord, Lord McAvoy, about whether it was negligence or discourtesy that we had not consulted the other parliaments and assemblies in the United Kingdom. The Government wanted to make an announcement on a national basis on a given day to Parliament. Even if it was a lack of respect, should we change the date just because of that lack of respect, if there is no other reason not to continue?
Lord Elystan-Morgan
Granted that the Government had a total conviction that it should be 5 May and nothing else, would it however not have been courteous, chivalrous and statesmanlike to have consulted the Parliament of Scotland and the Assembly of Wales?
Lord Strathclyde
I am sure that it would have been all of those things, but none is a reason not to have the referendum on 5 May. That is the point.
The noble and learned Baroness, Lady Butler-Sloss, asked whether, if we carried on like this, there was any prospect of getting this legislation through not just by the end of January but by the end of January 2020. I have my doubts as well. Of course, that gives the lie to the accusation that we are not debating these issues thoroughly. We could not debate these issues more thoroughly than we have done over the past day and a half in Committee.
Before us is the amendment of the noble Lord, Lord Rooker, who offered us the date “before 31 October”. In the same group we are offered 30 June, 15 September, 6 October and 13 October, and the noble Baroness, Lady McDonagh, offered us 3 May 2012. It is a smorgasbord of opportunity. I am grateful to noble Lords such as the noble Lord, Lord Rooker, who have been constructive and helpful by saying that we should save ourselves with this lifeboat of an alternative. However, I am entirely satisfied that, with the evidence from the Electoral Commission and the debates within the Government, we are perfectly capable of holding this referendum on 5 May.
I have one other concern. The real unspoken reason why so many noble Lords opposite are against—
Lord Falconer of Thoroton
I apologise for interrupting, but the noble Lord appears to be moving on. The heart of the argument expressed by the Select Committee in this House is that there is a significant risk that the date will not be reached. If that is wrong, you can have your referendum on 5 May. Could the noble Lord possibly, out of respect to the committee, answer its point?
Lord Strathclyde
My Lords, if there is a risk, it is minimal. We have had the evidence from the Electoral Commission, which believes it is possible and has given evidence to noble Lords on that basis.
Lord Falconer of Thoroton
Its words were “on balance”. Minimal was the noble Lord’s word.
Lord Strathclyde
Whether it is “on balance” or “minimal” we think it is perfectly possible to have the referendum on 5 May, which is why I have set out the case during this short debate.
Lord Soley
I am going to invite the noble Lord to answer my question on this—he took a great deal of interest in it when I was asking it. It is a sort of module in his academic progress.
Lord Strathclyde
The noble Lord, Lord Soley, did indeed ask me a question. He asked—I wrote it down—“What happens if the Electoral Commission declares that the referendum cannot be held to an effective standard because of late changes to legislation?” The Electoral Commission has declared itself satisfied with progress so far. There is no reason why that progress should not continue. The conduct schedules to the Bill are based on tried-and-tested election rules. There is nothing new, nothing revolutionary, everything has been done before. It is on that basis that we do not accept that problems will arise.
The noble Lord, Lord Grenfell, was trying to get in but he has had a change of mind, for which I am very grateful. He does not have to intervene.
Lord Grenfell
I thank the noble Lord for giving way. Has there been a change of heart in the Electoral Commission in this case? How recent is the evidence it has now given that in fact it is happy with the progress made on this? What happens if, in the weeks to come, it is no longer happy? Will there then be a case for the Government to change their mind about the date?
Lord Strathclyde
My Lords, its opinion is rock solid. It has every confidence.
Lord Falconer of Thoroton
The Electoral Commission says:
“It is possible to successfully deliver these different polls on 5 May but only if the risks associated with doing so are properly managed”.
Upon that edifice does the non-round ball man, as he is described, rest his whole case.
Lord Strathclyde
The noble Lord, Lord Grenfell, asked whether the Electoral Commission was going to change its mind. I said that it is not going to change its mind because it is rock solid. It has made the assessments, done the research and taken a view. We have accepted that. None of the amendments so far would give us cause to change that view. All these issues were debated in the elected House—in another place. We have had substantial votes on the changing of the date and the different structures of different electoral systems.
What concerns me most is that many noble Lords, who are opposed to this Bill, oppose it because it is one of the political ideas that binds this coalition. In opposing this they see a valuable weapon in bringing down the coalition. I thank the noble Lord, Lord Rooker, for his kind offer of a lifeboat; I hope he will take it in the spirit in which it is intended if I cannot accept it and very much hope he will withdraw his amendment.
Baroness McDonagh
The noble Lord did not answer my questions about whether there would be any mayoral or local referendums on the same day as this referendum.
Lord Strathclyde
Yes, my Lords, there will be local referendums on this day. There are a number of elections. It might be helpful to noble Lords if I read them out. With the voting systems referendum, there will be elections for the Welsh Assembly, the Scottish Parliament and the Northern Irish Assembly. There will be local elections in England, in 36 metropolitan boroughs and 49 unitary authorities; in some of these, one-third are up for election, and some are all up. Then there are the 194 second-tier districts in England. In other words, 279 local authorities will run elections in England. There will be local elections in Northern Ireland and mayoral elections—that was what the noble Baroness was after—in four local authorities in England: those of Bedford, Middlesbrough, Mansfield and Torbay. Then, of course, there will be parish elections in England.
Baroness McDonagh
That was not my question. My question was whether this May there will be any local referendums on whether an area has a mayoral election and a mayoral system. Twelve were due to take place in May in our largest cities, and the Government considered putting them off for a year. Some of that will be dealt with in the localism Bill, but no one knows when that Bill will enter the other House. The Government seem to be in a lot of confusion and to be having difficulties with their legislation at the moment. Will all or some of the 12 local city referendums take place in May, or will they be put back to 2012?
Lord Strathclyde
My Lords, I am glad for that clarification. I did not fully understand the noble Baroness’s question. The answer is yes—it is likely that there will also be some local, mayoral referendums in England on 5 May, which will be run on the same boundaries as the referendum and local authorities. We have included provision to allow for those polls to be combined with the referendum.
Lord Harris of Haringey
The noble Lord very kindly gave us a list of areas where there will be elections, but perhaps he could give us a list of the areas where there will not be elections. Clearly, London is omitted from that list. Is he suggesting that because of the capital’s enthusiasm for one side or another in this argument, Londoners will somehow troop gaily out to the polls when they have no other reason to do so?
Lord Strathclyde
There will be no elections in the areas that I did not mention. The noble Lord may feel that Londoners will be uninterested, but I have complete faith that the campaigns for yes and no will be able to get Londoners out on this important issue.
Lord Rooker
My Lords, without being personal in any way, can I say that I am really looking forward to the noble Lord, Lord McNally, answering one of these debates? His name is on the Bill, but he has not really played much of a part as the leading member of the coalition here.
Lord Strathclyde
It is a long Bill, and an awful lot of noble Lords on the other side want to ask us questions. My noble friend and I, and my noble and learned friend Lord Wallace of Tankerness, have divided up the Bill and will speak at later stages.
Lord Rooker
I really appreciate the fact that the Leader of the House is taking a detailed role in the passage of the Bill. That being so, he has more clout than the others and therefore could have asked for better briefing. Where is the list of risks? Do not tell me that there is no group of Ministers or civil servants assessing the risks of this measure. If there is not, there will be one hell of a row, because every other public body has a risk assessment of things that can go wrong. It is implicit that in the conduct of public administration there should be an assessment of the risks, but there is no mention of that. There is a fixation on certainty instead. I do not mind that; I am just offering the Government a degree of flexibility on the practicalities. I deliberately did not refer to any of the other amendments on the dates. I do not want to get involved in this debate about the combination of referendums, elections and other dates. I would settle for 5 May, no problem, but is it practical?
In paragraph 24 of the Constitution Committee report, to which my noble friend referred briefly, the Electoral Commission said:
“Provided the Bill receives Royal Assent in time to allow a referendum period of at least 10 weeks, there will be adequate time for the Commission to register campaigners and designate”,
lead campaigners.
My point is that until Royal Assent, not a lot of money can be spent, in the education process, to cover the problems that the public might have. That recent poll was not undertaken 100 years ago, as the noble Lord, Lord Rennard said; it was undertaken by YouGov for the Constitution Society in only August/September this year. The issue is that 10 weeks before 5 May takes us to 24 February, and this House is in recess on that day. We rise on 16 February and are not back until 28 February, so we have lost even more. We are back after Christmas for fewer than six weeks until 16 February.
All I am saying is that we should consider the risk of uncertainties. The noble Lord, Lord Campbell-Savours, mentioned foot-and-mouth disease, and I was involved in some of the meetings at which there were big debates about what to do about the general election. Everyone knew that local elections and general elections were supposed to happen but there were hot discussions in the Cabinet and with the Prime Minister about them. We had a degree of flexibility, but the fact is that no one had planned for foot and mouth. We did not plan for the one in 2007, which was completely self-inflicted. We could have a problem and all I am saying is that, leaving aside some of the issues raised by colleagues, we ought to build in flexibility.
I shall not go through all the debates, but I am grateful for the support of the noble Baroness, Lady Oppenheim-Barnes. It is not a sneaky amendment; it is seductive, if you like—I prefer seductive. If she wants sneaky, there is one much further on in the Bill; it came out of last week’s debate and I fully accept that it could be classed as sneaky. I am trying to give the Government the opportunity to have flexibility. All Governments want it; local government wants it. It was in my mind that 31 October had been referred to somewhere. I had forgotten that it was in the Constitutional Reform Bill. The previous Government introduced a Bill without a date—they said that it should be before 31 October.
I have not talked to anyone in the Electoral Commission, although I went to a meeting the other week at which it could not answer some of the questions put by noble Lords. However, this amendment could not possibly cause the Electoral Commission one iota of concern. The date of 5 May is still a runner. That is the Government’s intention, Parliament’s assumption and the assumption that we want everyone outside to make. There is a degree of certainty. No one will say that it is deliberate, but things can happen outside the control of local government, the private sector and central government. It does not really matter; one can think these things up, which is why I am sad to say that we have not had the list from the risk committee that has been discussed in government. I cannot believe that this has not been dealt with somewhere.
We have not had a good response. I have no intention of pushing this, as there are other issues that I want to talk about, but on this amendment I will test the opinion of the House.
The Deputy Speaker (Lord Geddes)
My Lords, before putting Amendment 5, I must advise the Committee that if it is agreed to, or indeed if Amendment 6 is agreed to, I cannot call Amendments 7 to 12 inclusive due to pre-emption.
Lord Falconer of Thoroton
“( ) The date of the referendum shall not coincide with any poll or polls for any parliamentary assembly or regularly held local government elections.”
Lord Falconer of Thoroton
My Lords, Amendment 15, which stands in my name and that of my noble friend Lord Bach, concerns the combination issue, which has been debated on a number of occasions.
The speed with which the Bill has been put together has been justly criticised. One consequence of the haste has been a lack of consultation on the date of the proposed referendum. The Scottish Parliament and the Welsh Assembly were not consulted about the date, and during the debate on the previous amendment I read to noble Lords the view that the Scottish Parliament and the Welsh Assembly took on that matter.
The poll, as proposed, will be on 5 May next year. On that date, elections are already scheduled for the Scottish Parliament, the Welsh Assembly, the Northern Ireland Assembly, 279 local authorities in England and 26 local councils in Northern Ireland, as well as some mayoral elections. Thanks to the questions asked by my noble friend Lady McDonagh, who sadly is not in her place, we have learnt that, although the legislation has not yet been passed, there will in addition in certain places be a number of referendums on whether there should be mayors. Therefore, 5 May will be a busy electoral day for the vast majority of the British public, even without a referendum vote, and it will be made all the more busy if the poll on changing the electoral system goes ahead on 5 May as well.
We are not suggesting for one moment that voters will be unable to vote in more than one poll at once, but the potential for confusion and administrative complexity must be acknowledged. In its assessment of a combination of referendums and elections, the Electoral Commission pointed to risks arising from different regulatory regimes running concurrently. These regulations can refer to spending limits and also to the make-up of the electoral register. As my noble friend Lord Foulkes informed us in Committee last Monday, overseas voters, for example, are on the parliamentary franchise but not on the local government franchise, whereas citizens of European countries living in the United Kingdom are on the local government franchise but not on the parliamentary one.
Campaigning for the multitude of votes on 5 May 2011 will also cause a muddle. The election campaigns for the local and devolved assemblies will be held on a party basis but the campaign for the referendum will be cross-party. I may be of the same opinion as many noble Lords opposite when it comes to deciding whether we should adopt the alternative vote system for elections to the House of Commons but, should I meet the noble Lord the Leader of the House on the streets of London, I do not believe that we will be arguing for the same party candidate to be returned. On reflection, no party candidates will be returned in London because there will be no voting in London, so I shall be very confused if I am there.
The Gould report on the 2007 elections in Scotland identified the combination of polls as one of the most controversial aspects of the votes that took place on 3 May 2007. Gould concluded in his report:
“If local issues and the visibility of local government candidates are viewed as a primary objective, then separating the Scottish parliamentary from the local government elections is necessary in order to avoid the dominance of campaigns conducted for the Scottish parliamentary contests. In addition, separating the two elections would result in minimising the potential for voter confusion”.
The issues surrounding the local and devolved elections already scheduled deserve the space to be debated and aired without the distraction of totally different matters relating to the referendum. Similarly, if the arguments surrounding the merits or demerits of changing the voting system for the House of Commons are to be fully discussed and understood, they need their own time and space as well. Changing the voting system is a major and significant constitutional reform. It should not get lost among campaigns and arguments.
We believe that our argument for no combination of polls is strengthened given the circumstances in which the date of the referendum vote came about—five days of coalition negotiation and we are told that there is to be a vote on 5 May 2011. It is the sort of thing where it would be useful to consult more widely and then come to a sensible conclusion about the date. Despite knowing that the devolved Assemblies would be voting on this day, neither Scotland, Wales, as I have said, nor Northern Ireland has been consulted on the referendum date. Alex Salmond wrote to the Prime Minister in the following terms:
“I believe that your proposals to hold a referendum on the same day undermines the integrity of the elections in Scotland, Wales and Northern Ireland. These elections are of profound importance to our citizens and I believe they have the right to make their electoral choices for the respective devolved chambers without the distraction of a parallel referendum campaign on the UK voting system”.
The Welsh Assembly Government have been similarly scathing. The fear of distraction from other polls to be held on 5 May was the motivation behind the Welsh Assembly’s decision not to hold its own referendum on extending powers to the Assembly on the same day as Assembly elections.
The cross-party Constitution Committee of your Lordships’ House has noted opposition to the combination of polls. It has quoted the matters I have identified from the Scottish Parliament and the Welsh Assembly and agrees with that sentiment.
There is a critical issue which all of those issues are but an expression of. Our Constitution Committee said that if you have an election on the same day as other elections, even assuming that you can get through the issue of confusion, there is evidence showing that the reform issue will be swamped by the issue of who you want to have as your elected representative, whether it be in the Scottish Parliament, the Welsh Assembly or the local authority. That is what the evidence shows.
I understand why those negotiating the coalition agreement five days after the election were unaware of that evidence. However, now that we know that the experts are saying that this is the position, and in view of the fact that we are dealing with an issue as important as a change in the electoral system, it is very difficult to see what damage, beyond the money that the extra poll would cost, would be caused by having it on a different date. I cannot believe that the Government honestly think that if we had to have them on different days we could not afford to have them. I cannot believe that they honestly think they could not get enough voters out to make it plausible. If they do think that then we should not have this referendum at all.
I ask the noble Lord the Leader of the House to focus on the issue. He wants a plausible referendum which people have confidence in. Listen to the evidence, and have it on a separate day from all of those other polls. I beg to move.
Lord Strathclyde
I am very grateful to the noble and learned Lord for introducing his amendment. As he laid out, it seeks to prevent the referendum from being combined with any other poll. I am aware of the concerns that have been expressed regarding combining polls next May: we had some of them in the previous debate, and last week. However, as I said earlier, 84 per cent of the electorate will already have a reason to go to the polls on 5 May 2011, and combining this with other polls on that day will save in the region of £30 million across all polls.
Combined polls are not unusual and I have every confidence that voters will be able to distinguish between the different polls taking place—in fact, it is increasingly strange to suggest otherwise. What does the Electoral Commission say? It advised that it is possible to successfully deliver these different polls on 5 May. The commission also issued briefings throughout the Bill’s passage through the Commons and has concluded that the Bill contains,
“the necessary provisions for the combination of the referendum poll with the scheduled elections. We are satisfied that the technical issues we have identified with these provisions to date have been addressed by the Government.”.
The commission went on to say:
“The Government has tabled a series of amendments … to reflect relevant changes to the election conduct rules made by the revised conduct Orders for the May 2011 elections to the Scottish Parliament, National Assembly for Wales and Northern Ireland Assembly and local councils in Northern Ireland, which have been laid before Parliament. We welcome these amendments which seek to ensure that the combination provisions are accurate and workable”.
The noble and learned Lord quoted the Gould report. I, too, have read what he said, and we can all quote selectively from it.
Lord Falconer of Thoroton
Before the noble Lord quotes from the Gould report, could he identify for the House the occasions on which a referendum and an election have been combined on the same day in Britain?
Lord Strathclyde
I cannot quote a combined national referendum and national election but that does not mean that you cannot have one now. In respect of the comparison with 2007, Ron Gould said:
“I do not believe that holding both on the same day would create the same degree of confusion and resultant rejected ballots especially if sufficient advance public information and guidance was provided to the voters”.
The rigorous testing carried out by the Electoral Commission should also reassure those worried about voter confusion. The new draft clearly enables the electorate to understand the choice they are being asked to make and to express their views. The Bill also gives the Electoral Commission a role in providing information about the referendum and how to vote in it, which will help to minimise confusion. For those reasons, I hope the noble and learned Lord will feel that we have covered all the questions that he posed.
The only election which comes to mind when there was a combined referendum was the one which the noble and learned Lord will remember so well in London in 1998.
Lord Rowlands
Does the noble Lord think that he knows better than all the Members of the National Assembly and the First Minister of the National Assembly, that this would not be a major distraction to the elections in Wales?
Lord Strathclyde
I understand the views in Scotland and in Wales, and possibly in Northern Ireland as well. However, we have asked the Electoral Commission to give us its considered view. It has done so, and we back it.
Lord Elystan-Morgan
Following that question from the noble Lord, Lord Rowlands, perhaps I can ask who decided that there should be no consultation with the Scottish Parliament or the Welsh Assembly. I accept that there was no obligation whatever on the Government to change their mind on the matter of 5 May but, nevertheless, the decision not to consult was deeply insulting not just to the Parliament and the Assembly concerned but to the nations concerned.
Lord Strathclyde
I accept the noble Lord’s point; he has made it before. Perhaps if we were doing it differently, it would be done in a different way. For reasons of confidentiality and of making a statement, and rather than allowing the rumour mill to flow, it was right to make the decision we did.
Lord Howarth of Newport
Can I tempt the Leader of the House to apologise on behalf of the Government to Members of the Scottish Parliament and the Welsh Assembly, as I think there has been discourtesy towards them? He was good enough to say just now that possibly, if the Government were doing this again, they would do it differently. Will he go a step further and make a handsome apology? They have been treated with discourtesy and disrespect.
Lord Strathclyde
I do not believe in apologising when I am not fully aware of the facts.
Lord Phillips of Sudbury
Will my noble friend comment on the fact that there are many other legislatures where elections, referendums and plebiscites are held simultaneously and the people of those countries do not seem to be incorrigibly undermined in their decisions as a result? Secondly, will he comment on the fact that paragraphs 9 and 10 of the first schedule to the Bill set out a very stringent duty on the Electoral Commission and the various election officers to inform the public? As I understand it, the Electoral Commission intends to circulate to every household in the land a plain English guide to the issues about which the referendum is to be held.
Lord Strathclyde
It is as much a mystery to me as it is to my noble friend why the Labour Party and the noble and learned Lord believe that it will be impossible for people to vote in one election and in a referendum.
Lord Falconer of Thoroton
Let me help. What happens is that people concentrate on the election of individuals and they do not focus on the change. As I am on my feet, perhaps I may also say that I was struck by the reference to confidentiality. Has the noble Lord been trying to keep secret from Scotland and Wales the fact that this referendum was going on?
Lord Strathclyde
My point was that there was an aspect of confidentiality before the decision was announced; of course there was.
Lord Soley
Will the Leader of the House make clear whether this confidentiality relates to shared Cabinet responsibility, or is it entirely separate from that? Is it something that civil servants recommended, or is it a political recommendation?
Lord Snape
The noble Lord brusquely spurned my offer of a meeting in Stockport this weekend, but perhaps I can further tempt him to put some flesh on the bones of this. Can he confirm that there will be no real problem about adding the alternative vote to all the other matters that will be taking place if the Government get their way and we all have to troop out to vote for various things on the same day? How many people has he come across who have actually advocated the AV system? In his experience, aside from the rather peculiar friends that we all keep in politics, who, among ordinary people, knows exactly how AV works or, in fact, does not work?
Lord Strathclyde
I cannot possibly answer the questions of the noble Lord, Lord Soley. If I am able to find out, I will drop him a line. The noble Lord, Lord Snape, introduces an interesting argument: if, as he believes, people do not understand some aspect of this, they should never be asked whether or not they agree with it. Apart from the fact that that shows a surprising degree of arrogance and is patronising to his former constituents, even if they do not understand it now, they will have plenty of opportunity to do so before the referendum takes place.
Lord Snape
I hope I have shown no arrogance, nor have I patronised them. They are not my former constituents, in fact. I am talking about the fellow citizens of my home town—the town that the noble and, alas, absent noble Lord, Lord McNally, represented in the Labour interest in the late 1970s and early 1980s. However, the noble Lord cannot get away with that; it is not a plausible response. The fact is that for people who do not take a deep interest in politics, the letters AV make their eyes glaze over. All that we on these Benches are saying is that before such a momentous and dramatic change is put to the British people in a binding referendum, some explanation ought to be put before them as to why this particular system—denounced as it was for many years by the Conservatives’ new-found allies in the Liberal Democrats—is the one and only choice to be available to them on the ballot paper. As for the other point, about being patronising, the noble Lord will notice that I have an amendment down for debate later which gives people genuine choice between first past the post, which I support, and the AV system, which, as far as I am aware, has no great supporters other than those hoping to save their necks among his new-found allies.
Baroness Hayter of Kentish Town
How much will the mailing to every elector cost, compared with the £15 million extra for a separate referendum? I would also like to ask the noble Lord—I hope the Cross-Benchers will perhaps excuse me for a moment—a particularly party-organisational question. Those of us who have been involved for many years in elections know that an important part of canvassing and knocking-up—I am sorry about the expression, but it is the one that we use—is that last hour or two of getting known voters out. Earlier today I raised the impact of the proposals on campaigning. My difficulty, which I am sure will be shared with noble Lords opposite who have been involved in this, is knowing who to knock up on the night. You want them to vote for your own political party, but if you know they will not be voting the same way on the AV referendum, you might get a bit choosy. It will be quite difficult to get our normal political activity involved late at night. I am sorry for the Cross-Benchers—this is a party issue. However, it is undoubtedly one that, as we vote in the local government elections, will be uppermost in the minds of all our local organisers.
Lord Morris of Aberavon
I add my voice to concerns about the lack of consultation of the Welsh Assembly and the Scottish Parliament. These bodies have been set up for over 10 years and the present Secretary of State makes a huge play of her wish to work with the Welsh Assembly in Wales. If this is a precursor of how the Welsh Assembly and the Scottish Parliament are to be treated in future; if this is the result of hurried legislation; if the Leader of the House sees that he has no duty to apologise, not personally but on behalf of the Government, it augurs pretty badly for the relationship in the future.
Lord Rooker
Perhaps I can add to that. I was not going to intervene in this debate but I was struck by the Leader of the House’s use of the word confidentiality. I have the privilege outside this House of chairing the board of a non-ministerial department—I give a new flavour to the coalition, in some ways, on a UK-wide body. We are responsible and accountable to the four separate Governments. The issue of confidentiality, lack of trust and not being able to be frank and open with Ministers—who are themselves very widely in coalition in the UK—has, in my experience, never arisen. The devolved Administrations are not the enemy. I am not certain but I have a feeling that some Ministers in Whitehall, or the infrastructure in Whitehall, are new to dealing with devolved Administrations who have genuine power—it was new to all of us—and they look on them as the enemy. But they are not.
Lord Strathclyde
I certainly do not think that they are the enemy either. The point I was making was that the correct announcement was to make a single national statement, which is precisely what we did. The noble Lord, Lord Snape, says that nobody understands what AV is. That, of course, will be up to the campaigns and the Electoral Commission to explain. As for the noble Baroness, Lady Hayter, and her issues about knocking-up, again, this is a campaigning issue and it will be up to the campaigns to decide how best to get people to vote yes or no during the course of the campaign.
Lord Falconer of Thoroton
This debate followed the pattern of the last debate: the noble Lord, Lord Strathclyde, was incredibly attractive on the periphery of the debate but refused to answer the central issue—the swamping argument. Instead, he said that we were saying it was impossible to have the debate, which was very disappointing. He was arrogant in treating the request of the Welsh Assembly and the Scottish Parliament for an apology. My noble and learned friend Lord Morris of Aberavon made it absolutely clear that he was expecting not a personal apology but an indication from the Government that this is a serious matter, and an apology—or token of acceptance—that this is not something to be laughed at. Perhaps one reason why the debate was quite frustrating was the dismal performance of Ministers in dealing with the heart of the issue. The only way that it is possible to make the Leader of the House concentrate on the issues is to keep putting them. I would therefore like to test the opinion of the House on the combination issue.
The Deputy Chairman of Committees (The Countess of Mar)
Before I call Amendment 16, I have to say that, if Amendment 16 is agreed to, I cannot call Amendments 18 to 30 inclusive, because of pre-emption.
Amendment 16
Lord Skidelsky
“(3) The question that is to appear on the ballot papers is—
At present, the UK uses the “first past the post” system to elect MPs to the House of Commons. It is proposed that the system should be changed. Please rank the following options in order of preference.
Should the UK use:
(a) the first past the post system;(b) the alternative vote system;(c) a proportional vote system?(4) In Wales, a Welsh version of the question is also to appear on the ballot papers.
(5) Each voter will be asked to mark the ballot paper with—
(a) the number 1 next to the option that is the voter’s first preference (or, as the case may be, the only option for which the voter wishes to vote);(b) if the voter wishes, the number 2 next to the option that is the voter’s second preference, and so on.(6) The voter may mark as many preferences (up to the number of options) as the voter wishes.
(7) Votes shall be allocated to options in accordance with voters’ first preferences and, if one option has more votes than the other options put together, that option shall be deemed to have been selected.
(8) If not, the option with the fewest votes will be eliminated and that option’s votes shall be dealt with as follows—
(a) each vote cast by a voter who also ranked one or more of the remaining options shall be reallocated to that remaining option or (as the case may be) to the one that the voter ranked the highest.(b) any votes not reallocated shall play no further part in the counting.(9) After the reallocation of votes and recounting, the option with the most votes shall be deemed to have been selected.”
Lord Skidelsky
My Lords, it will not have escaped the notice of the House that I am not the noble Lord, Lord Owen. My noble friend had a minor operation last week, and has had to return to hospital, from which he is being discharged today. He asked me to move this amendment in his name, which I am very pleased to do.
This amendment is not about the date of the referendum, but about its substance. In Clause 1 of the Bill, line 7 on page 1 gives the voter the choice between retaining the first past the post system to elect MPs, and the alternative vote system. This amendment is designed to give voters, in addition, an opportunity to express a preference for proportional representation. By allowing voters to rank their preferences, this amendment is sure to result in a majority expressing their preference for one or other of the three nominated options. It is a very simple demonstration of the power of the alternative vote under certain conditions.
Originally, those who tabled the amendment had intended to put all the varieties of proportional representation—AV plus, the additional member system, STV and maybe others—on the ballot paper, but, after consulting, it was decided to add just one general extra option: general proportional representation. This would leave the House of Commons to decide which version to adopt should PR get a majority. That seems sensible. The advantage of putting all the PR options to the electorate is quite compelling in terms of democracy, but, against that, it would overcomplicate the question being asked, and a referendum should be about broad principles and not about details. That is our main argument against the amendments moved by the noble Lord, Lord Campbell-Savours, and the group of amendments put down by the noble Lord, Lord Rooker. I hope that on reflection they will feel willing to support the amendments in the name of my noble friend Lord Owen.
This amendment expresses our disappointment that the alternative vote is the only alternative to the status quo which the Government are willing to offer. Whereas party-political deals are an essential part of political life—we all know that—I doubt whether such a flagrant party-political deal should be the subject of a referendum. We know why it has happened—no one denies it: it was the price of the coalition. The Liberal Democrats wanted electoral reform without a referendum; the Conservatives, who favour retaining the first past the post system, would not concede that, and a referendum on AV was the compromise position.
We also know from many sources, but most recently from Anthony Seldon’s fascinating book, Brown at Ten, that, after the general election, Gordon Brown—who was still Prime Minister—offered the Liberal Democrats a multi-question referendum identical to the amendment I am now moving. The noble and learned Lord, Lord Falconer, will probably know more about this than I do, but anyway, that was the revelation. The former Prime Minister offered the Liberal Democrats a multi-question referendum identical to the amendment I am now moving.
Lord Foulkes of Cumnock
I wonder if the noble Lord could say whether he believes everything he reads in that book.
Lord Skidelsky
I believe everything I read that Anthony Seldon writes.
There was also an offer to make it a vote of confidence to guarantee its passage through Parliament. That was the offer. I am not questioning the judgment of the Liberal Democrat negotiators in turning down that offer in favour of a much inferior alternative, from their point of view. As they say, there were other considerations, but it might be helpful for noble Lords on the Labour and Liberal Democrat Benches to be reminded of this little history—and I think it is authentic—in making up their mind about the value of this amendment.
In our view, narrowing the choice to only two alternatives represents an abuse of the referendum mechanism. Referenda are not part of our political tradition. We use them sparingly to decide on questions of great constitutional consequence. I do not agree with those noble Lords who said that AV represents a radical change in our constitutional system. It retains most of the features of the first past the post system. By providing for reallocation of votes according to preference rankings, it ensures that no constituency Member is returned with less than 50 per cent of the vote. That is a change—it is a majority rather than a plurality—but it does not ensure representation of the minority any more than the first past the post system.
Nor would the alternative vote make much difference in practice. It has been calculated, for example, that the 2010 general election held under the alternative vote system would have returned 281 Conservative, 262 Labour and 79 Liberal Democrat MPs, as opposed to 307 Conservative, 258 Labour and 57 Liberal Democrat MPs. With impending boundary changes, one would expect that gap to shrink even further as time went on.
Lord Campbell-Savours
The Plant commission did not turn down AV. It said that it was a perfectly acceptable system, but that it just preferred another. That system was within the AV family of systems; namely, the supplementary vote. I know that the noble Lord has had to pick up the brief from others who unfortunately are not able to attend, but I am having difficulty in understanding why he does not accept the supplementary vote in his amendment. He alluded to it previously, but it was not clear to me exactly what he meant in his explanation. Will he tell us that before he sits down?
Lord Skidelsky
I think that those who tabled the amendment did not want to overcomplicate the choices being put to voters. When people get into the nitty-gritty of constitutional change, first, they can get obsessive about having their own preferred system and, secondly, it can become very complicated. In our view, it is simply a device to delay any changes. We thought that it would be a better idea to have three broad choices, one of which was proportional representation, leaving it to the House of Commons to decide, if that was the preferred option—that is, if more than 50 per cent of people support it—on which particular variety they would legislate. That was the logic behind it.
I urge this amendment on the Government and ask them to consider it seriously. Not to take advantage of the chance opened up by a promised referendum in order to offer the electorate a major choice about the future of the electoral system would be to miss a major opportunity to test their appetite for political reform. I beg to move.
Amendment 16A (to Amendment 16)
Lord Campbell-Savours
Lord Campbell-Savours
My Lords, I shall speak to Amendments 16A and 17, which are in this group. I wish to follow up on something to which the noble Lord, Lord Skidelsky, referred. He referred to “a proportional vote system”, which would be inserted under proposed subsection (3)(c) to be inserted into Clause 1 under Amendment 16. In other words, this referendum would not deal with only clear alternatives set out in the referendum question; it would pose the question, “Do you want a proportional vote system?”, which at this stage is not to be identified in the referendum question. By implication, there inevitably would have to be an inquiry arising out of a referendum which might choose new subsection (3)(c) as the option.
I am very interested in inquiries because last week we spent several hours arguing the case for an inquiry. What interested me about this amendment, and why I sought in my Amendment 17 to include the supplementary vote, is that that is precisely what I want to see. I want to see an alternative vote referendum based on the need for an inquiry in exactly the same way as is proposed by the noble Lord, Lord Owen, the right reverend Prelate the Bishop of Blackburn and the noble Earl, Lord Clancarty, in their amendment.
In private conversation, I asked the noble Lord, Lord Owen, whether he might be prepared to accept this amendment. There may well be conditions in which some of us would like to divide the House on this. It raises very important issues. He gave me the same explanation; namely, that it is too complicated. But the reality is that, of all the electoral systems that confront the British electorate at the moment, apart from first past the post, the supplementary vote is the simplest system. It is used nationally in the mayoral elections. It has been supported by many millions of voters. Next year, when the mayoral elections finally take place in the new mayoralties—I think that there was reference to 12—I presume that they will also be fought on the supplementary vote. I cannot quite understand why introducing the simplest possible system should be regarded as a complication of the question.
In winding up, I hope that the noble Lord, Lord Skidelsky, might offer to take back to those who have their names to this amendment the suggestion that before Report they might be prepared to include, if they were to retable their amendment, reference to the supplementary vote.
The content of Amendment 16A is the substance of an amendment that I shall move later and, again, it is about the principle of an inquiry. The referendum question at the moment refers specifically to “the” alternative vote—a specific system that has been identified, which I and many of my colleagues reject for different reasons. My amendment, which I would have slotted in as paragraph (d) of subsection (3) as proposed under Amendment 16, would enable the public to vote on a question which asked whether they were in favour of “an” alternative vote system. That would then beg the question of an inquiry to take place and a decision to be taken by Parliament or whoever wanted to make representations. Finally, a decision to be taken by government could be put to the House. I ask the noble Lord to take this back to his noble friends, because I regard the amendment that he has moved as one of the most important to be considered on this Bill.
Lord Lamont of Lerwick
My Lords, as always, the noble Lord, Lord Skidelsky, has made an attractive speech which was full of interesting references, although I think that this is a somewhat curious amendment. The noble Lord, Lord Campbell-Savours, made a powerful point, but it leads me rather in the opposite direction to the noble Lord and to think that one could not support this amendment.
It will not surprise anyone that I speak as someone who has been over time a strong supporter of our existing system. In the 1970s, I even wrote a pamphlet defending our system, called Electoral Reform No Reform. At least I stand by the title because it has always seemed to me that the advantages and disadvantages of electoral systems are more evenly balanced than people acknowledge. The word “reform” is tendentious and “change” would be a better word. I have to confess on reading my pamphlet written 40 years ago that not all the arguments have stood the test of time brilliantly. I accept that there is more of a case than it appeared then for something like the German mixed system.
Some of the criticisms, however, that are made of our system, including one made by the noble Lord, Lord Skidelsky, are fallacious. The noble Lord referred to the first past the post system as one that depends on making the winner someone with a plurality rather than a majority of votes. The criticism is commonly made about our system producing over 50 per cent of the seats with people who have perhaps only 40 per cent of the votes and this is not a majority. The point is made that the Government do not reflect majority opinion under our electoral system. The fallacy in this argument is that there naturally exists in public opinion such a thing as a majority. It is true that if you take any single issue—like whether people are for or against the euro, whether they are for or against privatisation, whether they prefer public expenditure to lower taxes—you can get a majority for any single proposition. But elections are not fought on one proposition; they are fought on four or five issues. Opinion polls show that it is much more difficult to get a majority for four or five issues at once than it is for one issue. So it is a wrong argument to say that you have an electoral system that produces a majority when there is not in fact an underlying real majority.
What is the magic of a majority anyway? In a democracy, power, even by a majority, must be exercised with restraint and with respect towards one’s opponents. All electoral systems create a majority in an artificial way. The first past the post system does it by converting around 40 per cent of the votes into 50 per cent of the seats. The alternative vote system creates a majority artificially by taking the second preferences of the bottom candidate and allowing those to determine the outcome. But the second preferences of the second candidate do not count. The second preferences are given undue weight, which is why I was able to quote in Second Reading what Winston Churchill said about the system when he called it the least scientific in which the most worthless votes for the most worthless candidate determined the outcome. That is the artificiality of the AV system in creating a majority. With PR, equally, majorities are created rather artificially because people take two or three parties that may have fought the elections on completely different programmes, as we well know, and add them together and call it a majority, although nobody actually voted for the programme of the Government. So the artificiality of a majority is something that has to be recognised before one pours all this criticism on first past the post.
Lord Skidelsky
I thank the noble Lord for giving way. I will simply point out that the movers of this amendment are not advocating any particular electoral system. It is neutral between the three choices. It is simply advocating a referendum in which those choices are given. That is all. Your points may be completely valid but they are not the point of the amendment.
Lord Lamont of Lerwick
If I digressed, I apologise to the House and stand rebuked. Specifically on the amendment, its Achilles heel is the one the noble Lord, Lord Campbell-Savours, alighted on—namely, that it gives as an alternative this broad category of a proportional system. Proportional systems vary enormously. Some of them, like the German mixed system, are not so different from our system. They are different but they are not very different. And there is a world of difference between PR on a national list system, as it used to be at one time in Italy and as it is in Israel, and the German system. It is a huge variation, so much so that it would make the question, if it was put in this form in a referendum, completely nonsensical. I do not think one can follow the noble Lord, Lord Campbell-Savours, and say, “We will have a referendum in which two or three of the outcomes may be definite but if a rather vague outcome is voted for, then we will have another inquiry”. This seems to be a slightly unbalanced and rather strange way of proceeding.
The second objection that I have, which is the reason I called it a rather strange amendment, is this device of using AV in order to determine which electoral system we have. It would be extraordinary on something as important as our choice of electoral system, which could have profound effects on the way we run politics in this country, to say that again the result should be determined by the second preferences of the system that people least wanted. The arguments that I put forward against AV seem to apply equally strongly to a referendum. To revert to the point I made earlier, I do not think one could leave PR as a choice just defined as PR. If one tried to answer that, as the noble Lord, Lord Campbell-Savours, was suggesting, by putting the supplementary vote system, or STV, or any of the many different systems of PR, that would make the whole referendum meaningless. So I am afraid that, although the noble Lord, Lord Skidelsky, made a very interesting speech, I think this is a completely unworkable amendment and should be rejected.
Lord Lipsey
My Lords, I am tempted by the amendment moved by the noble Lord, Lord Skidelsky, not only because I always find him an exceptionally persuasive and erudite man but for two other reasons. One is that it uses AV to choose the winner of the contest. No electoral theoretician would think this was a good way of choosing between these preferences. You would need some sort of Condorcet system which ran off options to find the one that emerged as having the most support rather than a system that simply eliminates a better choice. It does not work terribly well for this kind of referendum. AV has the great advantage of simplicity, which is also the reason I, for one, favour it as our national electoral system.
The other reason I am quite tempted by this amendment is that I have no doubt that the result of the referendum, whether it was AV or first past the post, would certainly knock out PR for ever. The power of the arguments that would be placed against a PR system for Britain would be so enormous that nobody would be tempted. As a political observer I add this point. The only people who would be speaking up for PR in such a referendum would be the Liberal Democrats. Liberal Democrat advocacy of anything at the moment is a certainty for its unpopularity. This is the party that has lost more than half the votes that were cast for it at the General Election. The thought of these poor lambs bleating round the country for STV, or whichever system they choose, would make it a certain feature of the result of the referendum that it went down the plughole. So for those reasons, I am tempted by the noble Lord’s proposal, though not perhaps for the reasons that he put forward.
I go back to where I started on electoral reform, about which I did not know a huge amount at the time, which was with the Jenkins committee. That committee’s terms of reference were written, in many ways wisely, by the party of which I am a member. The terms of reference did not say, “Put forward a whole lot of possible options and discuss their merits as the electoral system for Britain”. Nor did they say, “Recommend an electoral system and we will have it”. They said, “Recommend the best possible alternative to first past the post to be put before the British people in a referendum”. I regret deeply that it was not put before the British people in a referendum at the time.
In the same way as the coalition is wise to put forward an alternative for the referendum, in writing the terms of reference widely in that way the Government were right about what a referendum can seriously manage to do. I think that I heard the noble Lord, Lord Skidelsky, correctly. He said that this was an abuse of a referendum. It is not. Let us face it: referendums have their strengths and limitations. They are quite good at resolving a simple question on which the political class is divided. The supreme example in my lifetime was Europe. The referendum of 1975 settled things, rightly or wrongly, for many years to come. There was no other way within our political system that it could have been settled because of the state of the Labour Party at the time and later the Conservative Party, which nearly blew itself apart over Europe. The voice of the British people came down clearly on a single alternative, which was to stay in, rightly or wrongly. That defused a bomb at the heart of the political system.
This is no disrespect to the British people, but I do not think it is reasonable to expect them to come to grips with the degree of complexity of choice such as is implied by this referendum, still less the choice that exists in real life. Imagine the kind of atmosphere that goes on during an election with claims and counter claims being made. Every time someone says, “This is more proportional”, the AV lot will say, “Ours isn’t more proportional”. You would have a cacophony, which even those who have been studying this subject for half their lives, such as me, would have difficulty disentangling. At least the option that we have before us would give the British people a clear choice to make and the arguments between AV and first past the post are not that complicated.
Moreover, as I said in an earlier debate on the Bill, in a number of years’ time people may think, “Well this has worked quite well. We would like to go further to a proportional system”. Or, they may say, “That was a big mistake. Let’s go back to first past the post”. They may say, like the noble Lord, Lord Foulkes, “Never go back”, but that may show the inadequacy of the system that I thought he favoured. It is not a once-and-for-all choice. I agree with the noble Lord, Lord Skidelsky, that there are other choices that could be made about our electoral system. They do not all have to be made in one jump at one time.
I now move on to the case made rather well by the noble Lord, Lord Lamont. The idea that there is something called a proportional system that has a unique set of features is completely without foundation. The differences between STV, the single transferable vote, between national list systems and between the additional member system as used in Germany and recommended in part by the Jenkins commission, are enormous. This calls for a proportional system but there is virtually no proportional system in the world. The only exception is Israel. I have talked to many people about electoral systems but I have yet to find a single person who thinks that the Israeli electoral system is ever other than a complete disaster. It allows for the representation of parties with only tiny members of votes who can then hold the polity to ransom in favour of their peculiar religious objectives. Israel is a disaster among democracies for that reason and, arguably, the current state of the Middle East is a result of that political system.
Other than the Israeli system, there is huge variety among more proportional systems as to how much proportionality. You can have a national list with thresholds, for example. It is a perfectly good system as long as you do not mind all MPs being chosen by their parties, the end of the constituency representative tradition in our country and the complete dominance of the party Whips over our politics forever more. You can have a national list system. STV is not designed to bring about proportionality at all, although it is a more proportional system. STV came out of the 19th century tradition where they wanted a greater emphasis on the character of individual Members of Parliament rather than on the party that they represented. If you look at the Irish STV system, what happens there is that the contest is not between parties but between individual members of those parties about who is the best representative of the people. You can make a case for that but it is not essentially the case for proportional representation, although it produces proportional outcomes. Additional member systems have a completely different set of characteristics again.
At this stage, one can hear the people crying, “Mercy, please. We pay you to sort some of these things out. Some of us think we pay you too much”.
Lord Skidelsky
Is the noble Lord not descending but ascending into discussing the strengths and weaknesses of different electoral systems? That is not the point of the amendment. The referendum will happen. The amendment is about adding another choice to the two being offered.
Lord Lipsey
I see that that is what the amendment would do. However, it adds not one choice, but a plethora of choices without defining what they are, all with completely different characteristics one from the other and having very little in common except that they can, just about sometimes, be squeezed into the rubric of proportionality. That is why this is not a suggestion that should carry faith.
When the referendum campaign comes, I guess that what will happen in the last few weeks is that those who are against any change will say something like, “If you don't know, vote no”. They will try to capitalise on people’s ignorance. Even those in this Chamber—and there are many sitting around me—who favour first past the post would probably rather it was not decided on that basis. They would probably rather the people took a clear view of the virtues of the electoral system that we have and the virtues of the alternatives and made their verdict on that, which we would all accept as the way forward. This is a recipe for an extremely blurred choice of ill-defined alternatives which is hard to explain and unfair to ask people to grapple with. It is made even worse because unless the referendum date is moved as a result of the amendment of the noble Lord, Lord Rooker, which we passed earlier, they will be grappling with this choice at a time when they are dealing with local elections, new mayors and, in Scotland and Wales, with the all-important question of what their national governments should be. This is a seductive amendment, but it is profoundly misguided and I hope therefore that the House will not countenance it tonight.
The Earl of Clancarty
My Lords, I support Amendment 16 in the name of the noble Lord, Lord Owen. In the Committee debates that we have had so far, one thing has been left out to a large extent: the perspective of the public. The referendum should be about fairness and trust: being fair to the public and trusting the public. I support the amendment in the broad spirit in which I interpret it, which is that the public should be given a proper choice and not the restricted one that would currently be imposed on them.
I have heard people say quite a lot recently that the public are not very interested in voting systems. As an example, they are more interested in how the cuts will affect them today, tomorrow and the next day. Yes of course; most people are not going to be that exercised at present about something that is still fairly abstract and we are not even quite sure will actually happen, but when the public has confirmation of the date and the terms of the referendum, they will, with help from newspapers, TV and the internet, rapidly become experts in different voting systems.
However, there will be qualified interested only if the choice is between first past the post and AV: and no wonder, since a win for first past the post cannot possibly be interpreted as a ringing endorsement if AV is the only other option on the ballot paper. Likewise if AV wins, that too cannot possibly be seen as the system the public would most prefer if they have been denied other key voting systems.
Lord Rennard
My Lords, I wish to oppose the inclusion of Amendment 16 in the Bill and to do so as a strong supporter of electoral reform. I actually joined the Electoral Reform Society some 35 years ago at the age of 15. Unlike some supporters of the alternative vote, I remain strongly committed to the principles of proportional representation, and to the merits of the single transferable vote system in particular. However, I share the opposition to closed lists of noble Lords who propose this amendment, whether they be lists of 10 people or just one, as in the current first past the post system. Above all, I am committed to making progress that will allow the voters themselves to have a say in how their representatives are chosen.
I am sure we wish the noble Lord, Lord Owen, well in his recovery. I note from his recent correspondence with the Electoral Reform Society that he has been referring to the alliance commission in the early 1980s, which, on behalf of the Liberal Party and the SDP, looked at electoral systems. He notes that that commission found in favour of STV rather than the alternative vote system, but I ask him when he looks at his Hansard to consider that report again in some detail because it also said that in parts of the country where perhaps it was appropriate to have only a single member—such as in the far-flung rural parts of the country—it was appropriate to use the alternative vote system.
I also draw his attention, and that of some of his noble friends, to the system that operated for choosing single candidates within the SDP—of which he was a member between 1981 and 1988—and in the party that he led between 1988 and 1990. The system chosen for choosing a single person, be it a leader, a president or a candidate, was in fact the alternative vote system.
Lord Rennard
It was the system that is proposed in this Bill and which was proposed by the then Constitutional Reform and Governance Bill put forward earlier this year and voted for overwhelmingly by Members in another place. I ask those in your Lordships’ House who are members of the major parties, and who are considering tonight and on many other days the merits or otherwise of the alternative vote system, to consider how it is that within their own parties—the Labour Party, the Liberal Democrats, the Conservatives, and for that matter the Scottish National Party, Plaid Cymru or the Greens—when it comes to electing a single person, be it a leader, a president or a candidate, it is the alternative vote system, as generally known, that is always used.
In 1996-97, I was the joint secretary of the committee between the Labour Party and the Liberal Democrats that looked at proposals for constitutional reform in the event that the Conservative Party lost the 1997 general election. I served under the late Robin Cook and my noble friend Lord Maclennan of Rogart. We had very high hopes then because it was agreed between the then main opposition parties that as and when there was a general election in 1997, and if the Conservative Party was defeated, there would be a referendum on an alternative proportional voting system. Over the 13 years in which that Government lasted, no such referendum was ever held.
Shortly after the general election of 1997, the late Lord Jenkins chaired the commission that looked at the alternatives; the noble Lord, Lord Lipsey, was a member of it. I have noted how some of those in support of this amendment are quoting the fact that the Jenkins commission, as it became known in 1998, did not find in favour of AV but in favour of a system known as AV+. As the noble Lord, Lord Lipsey, has confirmed in earlier debates, when it came to actually looking at this issue, the great—and I think very wise—Lord Jenkins, actually decided that the best system, in his opinion, was for AV for single-member constituencies in rural areas and for STV in the bigger city areas with multi-Member constituencies.
I note the words of my noble—he called me a little while ago his erstwhile—friend Lord Alton of Liverpool. He said that Lord Jenkins had in the end rejected the AV system. To all those who hold the memory of the late Lord Jenkins in some esteem—I hope there are many in this House—I would say that I know that it was to his great, great regret, in a very long and very distinguished career, that at that period in the late 1990s, when there was the opportunity to implement the AV system, he did not help to seize that opportunity. I believe that we must not let the opportunity of some form of electoral reform go away again.
The Electoral Reform Society, which was formerly known as the Proportional Representation Society, campaigned for PR for more than 100 years. It is urging rejection of these amendments in order to get some progress and to give voters some say on the issue as opposed to none at all. The alternative vote system may not be perfect, but it gives more power to the voter. It would mean, for example, that MPs who considered themselves unfairly deselected by their party could stand again without fear of splitting their party vote, thus giving more power to the voter. It would have meant, for example, that supporters of the noble Lord, Lord Owen, could have stood against the party that became the Liberal Democrats and avoided the split in votes that damaged his cause and split the vote of what had been the alliance in the 1980s. For these reasons, I would say that AV is at least a much more attractive proposition than first past the post, to say nothing of the greater power that it gives to the voter.
Lord McAvoy
I have listened very carefully to the lucid contributions of my noble friend Lord Lipsey and the noble Lord, Lord Rennard, and I totally accept the sincerity of their points of view on their particular systems, but having heard the various explanations and all the rest of it I started to get a headache. Will the noble Lord care to comment on the fact that I served for 28 years as an elected representative and I do not recall a single occasion, at a public meeting or a surgery, on which the issue of so-called electoral reform, proportional representation or whatever name anyone cares to give it was raised? Surely, we are supposed to reflect the public. Where is the public demand for this?
Lord Rennard
There are many places in this country with very safe seats, where issues of electoral reform are rarely debated. I accept that people are far more interested in outcomes than they are in processes, but I believe the process by which MPs are chosen is rather important in determining the outcomes. In your Lordships’ House, reference has constantly been made during these debates to the words of the Deputy Prime Minister considering the alternative vote system. Shall we just deal with those words for a moment? The first point is that the alternative vote system that he is now advocating is a compromise. Yes, it is a compromise. If no one party wins a general election, there is a need for compromise. I believe that many people in this country think that compromising is sometimes a good principle, not a bad one.
Lord Campbell-Savours
Compromises have to be settled, and the actual words of the Deputy Prime Minister were:
“I am not going to settle for a miserable little compromise thrashed out by the Labour Party”.
But he did settle on that very compromise.
Lord Rennard
My Lords, I thought that we had a very good compromise in 1997 agreed with the party of the noble Lord opposite but, after 13 years, that compromise was never delivered. I was quoting the Deputy Prime Minister rather more fully; I was going to talk about the word “little”, which he used. I believe that it is a little change, which preserves the single-Member constituencies, which Members in other parties hold very dearly. I happen not to. But since it preserves the single-Member constituency principle, I believe that it is a little change that will bring greater benefit.
There is also, of course, the word “miserable”. The only thing that would make me really miserable—and I say this in all sincerity to noble Lords who supported Amendment 16—would be if we failed to give people their say and made progress on a form of voting system that was effectively designed for the political circumstances in 1872, when Gladstone brought in the Secret Ballot Act.
Lord Grocott
Will the noble Lord clear up one crucial issue for me, at least, and I hope for the House, about the Liberal Democrats’ approach to this referendum? They constantly refer to it as a compromise—and whether it is miserable or not is for others to decide—while several are on record as saying that it is a step in the right direction. If there is a referendum next May and the result is in favour of the alternative vote, although I hope it is not, for how long do the Liberal Democrats consider that decision to be binding?
Lord Rennard
My own view is that since Gladstone introduced the current system in 1872 in the Secret Ballot Act, for 138 years noble Lords and Members in another place decided that that system was perfectly good without revision and without letting people have their say. It is a good precedent to let people have their say, and we will wait to see when there is public demand again to have any further say. But for 138 years we have kept the same system. One hundred years ago, a Royal Commission recommended the adoption of the alternative vote, and 93 years ago, a Speakers Conference recommended the use of preference voting. Seventy-nine years ago, the other place voted for the adoption of the alternative vote, which was blocked on five occasions by your Lordships’ House. It is 36 years since a minority Conservative Government offered another Speakers Conference on electoral reform and it is 13 years since a Labour Government with a large majority had a manifesto promise and were elected on the basis that there would be a referendum on the issue of proportional representation. So it is a significant achievement for all those committed to electoral reform that twice this year in the House of Commons, with different Governments in place, there have been substantial majorities for a referendum to be held on the alternative vote. I want to see progress on this issue and hope that we will not give Members in another place a further opportunity to deny the voters their say on this issue and leave us back where we were in 1872.
Lord Campbell-Savours
Why does not the noble Lord be more honest—although I am not accusing him of being dishonest, he could be more honest—about where we stand who are in favour of electoral reform? Is not the reality that this is simply the first building block and that, once we have changed the system to a single-Member constituency arrangement, it will then go on to the next stage and ask for more? Is not that what is actually being said? I openly admit it; that is why I am arguing about the building block. I am saying that the preferential system being selected by the Government is the wrong building block on which to build the later stages. I wish noble Lords on the Liberal Democrat Benches would be more open and honest about that.
Lord Rennard
My Lords, I think that I have been remarkably open and honest all the time I have been in this House speaking on these issues. The noble Lord’s argument suggests that perhaps until the 25th century we should keep the political system exactly as it is and ignore centuries of progress. I do not think that that would be fair or democratic. Perhaps we should say that, given that 2,000 years ago in Athens people all turned up to vote on issues, we should have that sort of system now. I am not arguing that my system or my preference should be imposed on the British people. I am simply arguing that the British people themselves should have the democratic right to say for themselves how their representatives should be chosen. I do not understand how people who consider themselves democrats can resist that fundamental democratic principle.
Lord McFall of Alcluith
Does the noble Lord view the referendum as an event or a process?
Lord Rennard
All electoral processes and all elections are constant processes. However, if we kept things as simple as they were in 1872, it would be quite inappropriate. We no longer have a two-party system, as we had then, and which perhaps we had in 1950 or 1951. We are talking in these debates about respect for Scotland and Wales, and the same noble Lords who say that we should respect those countries, where there are four-party systems, at least, in operation, are still trying to perpetuate a voting system only appropriate to two parties. That does not respect people who support other options and, in particular, the people of Scotland, Wales and Northern Ireland.
Lord Howarth of Newport
This amendment is a helpful and important one. It certainly needs more work, and I do not think that it should be passed as it is at present drafted, but it points in the right direction. The political parties have been right to come to the view, and have somehow stumbled in the past 12 months or so into agreement on the notion, that it is now timely to offer the opportunity to the people of this country to revisit their electoral system and consider whether they want change.
It is too melodramatic to talk in terms of a crisis in our political culture, but it is realistic to acknowledge that there is a malaise and a widespread disaffection from our politics, and a widespread view that elections are determined by small numbers of voters in small numbers of constituencies, and therefore that large numbers of votes are wasted. That is wrong in principle and unsatisfactory in practice. It may be that the malaise would be dispelled were we to be blessed with good government. If we were to enjoy a period of government under which the people of this country came to the view that they were being wisely and benignly governed in the interests of all the people and that they could look forward to unlimited peace and prosperity, no doubt the demand for constitutional change, such as it is—it is not very well articulated, but I think that it is there—would abate.
Lord Foulkes of Cumnock
Would my noble friend care to come with me to Scotland, where we have had a change in the electoral system for the Scottish Parliament for the past 10 years, and where he will certainly find that that malaise has not been dispelled? He is living in a fool’s paradise.
Lord Howarth of Newport
I absolutely recognise the force of what my noble friend says and would be happy to visit Scotland with him at any time. However, I disagree with my noble friends Lord McAvoy and Lord Grocott, who contend that there is simply no public interest in this question. While I accept that it is something of a preoccupation of the chattering classes and the professional political class, those of us in politics who believe that there is significant dissatisfaction in our political culture and that it has something important to do with the electoral system simply seek to understand the public mood and to see what ways there might be to improve on it.
It is right that we have a referendum on the future electoral system to be used in this country for elections to the House of Commons, but if we are going to do it we should do it properly. It seems quite absurd to have a great national debate and to go through all this palaver, expense and effort to resolve a timid and incomplete choice between first past the post and the alternative vote. If we are to have a referendum on the future electoral system of this country, a rare and very important event, then let us allow the people to have the choice between the range of plausible and significant systems. I support my noble friend Lord Campbell-Savours in his view that the supplementary vote should be among the choices offered at a referendum. That means, if we are going to do it properly, we would have to take time over it and the debate would have to be much more extended.
It makes no sense at all to try to rush a debate of this complexity and importance through in the brief period between whatever date this Bill gains Royal Assent and 5 May. Let us have a sustained exercise of political education and debate, following which a decision shall be made. How that decision should be arrived at—the technicalities of the choice to be offered in the referendum—certainly needs more careful examination. I am worried that offering a choice between four major options —but that choice to be determined by AV, which is among the choices to be offered—might somehow bias the outcome. I do not know; I think these things need careful thought. But we should not fluff this opportunity. We should enable all the important choices to be fully considered. That must surely be right. From a personal point of view, I suspect that I would end up voting for first past the post. But it is right that everybody should have the freedom to decide between the major serious options. This amendment is not the occasion to rehearse the virtues or defects of any particular electoral system. The question is whether the full choice should be offered to the people, or the limited choice that it has suited the political parties to offer so far. I hope that it will be the wider choice.
Lord Touhig
My Lords, I would not go into the Lobby and support the noble Lord if he were to push this to a vote tonight, but I welcome proposed new subsection (4) which states:
“In Wales, a Welsh version of the question is also to appear on the ballot papers”.
I remind noble Lords that Wales is the only part of the Union where a substantial number of people speak two languages. Indeed, 20 per cent of people in Wales speak English and Welsh, so it is important that any ballot paper should contain information in both languages. Indeed, there are five parliamentary constituencies in Wales—Ynys Mon, Arfon, Dwyfor Meirionnydd, Ceredigion, and Carmarthen East and Dinefor where the majority of people speak Welsh as their first language. We will come to that when we come to the part of the Bill on boundaries. I hope that we will have support around the House when we try to ensure that those Welsh-speaking areas will not have their representation in the House of Commons diminished.
Lord Foulkes of Cumnock
My noble friend may have overlooked an amendment that I have tabled suggesting that, if the referendum goes ahead, the question should be put in Gaelic in Scotland. We have constituencies in Scotland where Gaelic is the predominant language and I hope that that will be remembered.
Lord Touhig
The same argument applies to my noble friend’s point.
I have one point to leave with the Minister. As I said, there are five parliamentary constituencies in Wales where Welsh would be the first language. It is not spoken across Wales in any uniform pattern. In my former constituency, perhaps 2 to 4 per cent of people are bilingual. Therefore, it is important for the Government to consider that whatever goes on a ballot paper in a referendum, in those areas identified as being where a majority of people speak Welsh as their first language, the question should appear in Welsh first on the ballot paper. In areas where the majority of people do not speak Welsh as their first language, the question should be in English first. I am not suggesting in any way that people will be unable to understand all the ramifications of the vote, but having two languages on the ballot paper will be confusing for people who are not familiar with Welsh as their first language if the question is written first in Welsh. I ask the Minister to consider that when the Government decide what will be on the ballot paper.
The noble Lord, Lord Rennard, talked about compromise on this whole issue—compromise between his party and the Conservatives. I do not know whether he was in the Chamber last week when his noble friend Lord McNally said that he had switched over to see a rerun of the film on the battle of Waterloo. I saw it as well and saw that bit at the end when Napoleon sent a message to Paris saying, “The battle is won—no, no the war is won”. Then the Prussians appeared and we all know the outcome of the battle. I suggest to the noble Lord, Lord Rennard, that if the Conservatives are the Prussians they may not turn up on this occasion.
Lord Foulkes of Cumnock
My Lords, first, let me say a word about the contribution of the noble Lord, Lord Rennard. It was powerful and he argued his case very well. He said that he had been arguing it since he was 15. I must say that I did rather more interesting things when I was 15.
Lord Foulkes of Cumnock
I will come to that later.
What the noble Lord supports and has been arguing for—and he argues so powerfully—is a system that is favourable to the Liberal Democrat Party. He is looking after his own party’s interests.
Lord Rennard
Will the noble Lord accept that perhaps his support of first past the post might be based on the fact that it helps the Labour Party?
Lord Foulkes of Cumnock
I am coming to that in a moment. I am perfectly honest about it and I want the noble Lord to be honest about it. He is pushing that system because manifestly it helps his party. He accepts the alternative vote as a compromise but he really wants the single transferrable vote. He is moving towards that and sees this referendum and this system as the thin end of the wedge.
Lord Roberts of Llandudno
May I ask the noble Lord whether a party getting 23 per cent of the votes deserves 23 per cent of the representation?
Lord Foulkes of Cumnock
I was coming to that in half an hour or so.
I say to the noble Lord, Lord Rennard, that in every case in Scotland—I shall argue a strong Scottish case—where he has won the argument and persuaded the Labour Party to move towards a system of PR, such as in the election for the Scottish Parliament and subsequently for the election to local government, it has been a manifest disaster—absolutely disastrous. I shall make that point at some length, I hope.
I shall start with a plea to noble Lords, in the way in which Robert Burns when he was in trouble used to make a sincere and urgent plea to the presbytery of Ayr. This is a plea on behalf of we Scots, the noble Lord, Lord Strathclyde and myself—though probably more appropriately on behalf of Lady Strathclyde and my dear wife, as they are allowed to vote in the elections for the House for Commons, which the noble Lord and I currently cannot do, sadly. I hope that some change may happen there.
Those of you who live in English constituencies are lucky people. Apart from the awful system for the European elections, which we all suffer, and which was introduced by my own Government—
Lord Foulkes of Cumnock
There you are. A confession—good for the soul. It is an awful system, but those of you who live in England have first past the post for elections to the House of Commons and first past the post for local government. You know where you are and you know the system. People understand it. It is tried, tested and trusted.
We in Scotland suffer a wild plethora of electoral systems. We have an electoral system, that we share, for the European elections—the list system where there is no choice whatever. It is a great pity that we accepted that. Try to name your MEP. We were talking about going down the streets of Stockport earlier when my noble friend Lord Snape was speaking. Go down the street and ask people who is their MEP. They do not know who they are as they do not relate to local people or have the same kind of contact, accountability or responsibility of other elected Members.
Let us turn to the Scottish Parliament. The noble Lord, Lord Lamont—I am pronouncing his name properly for a change—said that he liked the German system. The system for the Scottish Parliament elections is akin to the German electoral system. I warned him and others against the alternative member system. When he comes back up to Scotland, as I know he does from time to time, he will see a bastard of a system, if noble Lords will excuse the phrase.
We have 73 constituencies elected by first past the post in Scotland. We used to have 72 constituencies. Why are there 73? It is because Orkney and Shetland have a constituency each—another concession to the Liberals that was a dreadful mistake. The good bit is that 73 are elected by first past the post. However, on the basis of the regional vote, 56 members—seven members in each of eight constituencies—are added members according to the vote of each party in each constituency, which produces the most unexpected results. In 2007, in Lothian, I was unexpectedly elected by that very strange system. It produces coalitions, the first of which we had with the Liberal Democrats, in which we conceded—I think foolishly—single transferrable votes.
Lord Rooker
I want to make it clear that my noble friend is speaking for Scotland. I am an English person, who, by the way, would like the Scottish system. The only reason why he was elected for Lothian in the top-up system is because there were tens of thousands of Labour voters in that region without a constituency representative. That is the point. That is why he was elected. That this system did not leave hundreds of square miles with Labour voters without any direct representation is a bonus. It is a plus that my noble friend was elected to the Scottish Parliament, not a minus.
Lord Foulkes of Cumnock
I am grateful for that endorsement and argument. My noble friend is a very powerful debater. He has made a good point. It is not all negative, but let me tell you some of the negative points. When we had a coalition with the Liberal Democrats, we were forced to concede STV for local government—I will come to that in a moment. Now we suffer from a minority SNP Government who have only one more seat than the Labour Party. They are so paralysed that they are unable to put any of their legislation through Parliament. That is why I said to my noble friend Lord Howarth that he should come up and see the stalemate that exists when we are not getting legislation properly dealt with.
I raised once before the system of Members retiring in the Scottish Parliament. If I were to retire tomorrow—and some people might like me to—the person who was second in the list would take over automatically without any election at all, with the people having no say whatever. Since my noble friend Lord McConnell represents a constituency—Motherwell and Wishaw—if he were to retire tomorrow, there would be a by-election and the people would have a say. However, if Margo MacDonald—who stood as an independent—were to retire tomorrow, there would be no filling of the vacancy whatever. I say to my noble friend Lord Rooker—a good friend—that this is just one of the many anomalies of the system that we have in the Scottish Parliament.
We ended up with STV. We had the European election system, the Scottish Parliament AMS system and the single transferrable vote in local government. Chaos has led to no overall control in so many authorities.
Lord McAvoy
I thank the noble Lord for giving way. Is it not the case that the noble Lord, Lord Steel of Aikwood, has expressed concern about this list member system as well?
Lord Foulkes of Cumnock
My noble friend is absolutely right. The noble Lord, Lord Steel of Aikwood, who was one of the architects of the system, has said that, if he had his time again, he would not support the system. I think that a lot of people who were involved would feel the same. So we have those three systems.
We should recognise that, if the coalition policy gets pushed through this House, we will have elections for the second Chamber—with another system of elections and another structure—as well as a change for the Commons. That is why I argue the case against having this referendum—indeed, against any changes for first past the post. I was sorry to hear that the noble Lord, Lord Lamont, did not agree with what he wrote 40 years ago because I am sure that it was right then and I am sure that it is right now.
Lord Lamont of Lerwick
I did not say that I completely withdrew what I said. I said that not all the arguments had stood up so well. As regards the German system, I did not say that I preferred it; I said that I thought it was the best of the alternatives.
Lord Foulkes of Cumnock
I am grateful for that clarification and I apologise if I have misrepresented the noble Lord. I hope he will then agree with this practical argument. We should look towards first past the post continuing for the House of Commons. If we have elections to the House of Lords, that is where we should have some proportional system. If the Commons continues, as it will, to form the Government—in other words, once the Commons is elected that is where the Government come from—stability is important. Apart from the current aberration of the coalition, first past the post normally produces stability. It produces one party in power for a period of time—five, 10 or 15 years. That gives some stability, which, in government, is important.
Lord Liddle
Is it the case that under that arrangement what you would have in practice would be more instability? What you would have is a Lords with full democratic legitimacy, elected on proportional representation, which would feel able to overturn the decisions of the House of Commons. Therefore, you would not get stability by that system.
Lord Campbell-Savours
I remind the noble Lord of a speech he gave to the parliamentary Labour Party about four years ago, where he made precisely the point that is now being made. He said that in the event that we were elected here by proportional representation and they by first past the post we would claim legitimacy where they could not.
Lord Foulkes of Cumnock
I remember it well. On that occasion, I said that, if senators were elected for Scotland, for example, or for Wales, Northern Ireland or England, to a second Chamber, which was a Senate, they would certainly claim some legitimacy or might even claim a greater legitimacy. However, if the Lords continues as a revising Chamber, I would argue the case for proportional representation for that revising Chamber.
Lord Skidelsky
I thank the noble Lord for giving way. As mover of this amendment, I point out that we are not discussing reform of the House of Lords at this point, we are discussing the amendment that has been tabled.
Lord Foulkes of Cumnock
I had realised that and I will come to it in just a moment.
Baroness McDonagh
Is it not the case that, when we are debating this referendum, we also need to think ahead of other changes that may happen and whether they may work with this system? That is the point that my noble friend is alluding to.
Lord Foulkes of Cumnock
I am grateful to my noble friend for rushing to my defence in a distinguished and helpful way—I was going to say gallant, but that is the wrong way round. What I was arguing, as my noble friend said, is that we need to take account of these things when we are looking at this amendment and any changes in the election to the House Commons, the first Chamber. If the Lords is the revising Chamber and is not forming the Government, there is an argument for it being elected by first past the post because then you have a different system balancing what the House of Commons and what the Government are putting to Parliament.
As the noble Lord, Lord Skidelsky—or perhaps it was my noble friend—rightly said, this would mean that you would have to carefully define the powers of both the Commons and the Lords. That is why I believe that we are moving towards needing some kind of written constitution with devolved parliamentary assemblies and parliaments, with a separate Supreme Court and with the possibility and the proposal to elect the second Chamber. Everything needs to be much more clearly defined. That is why it would be madness—and this is where I come to the amendment of the noble Lord, Lord Skidelsky, which was moved on behalf of the noble Lord, Lord Owen—to rush into this kind of referendum, or any kind of referendum, to change the system for the House of Commons. There are enough other changes taking place with the proposed reform of the House of Lords; we should learn from the changes that have taken place in Scotland, although it has not been a happy experience. We should not rush into something that has unexpected consequences just because the noble Lord, Lord Rennard, apparently puts a convincing case. Just because the noble Lord has spent 35 years arguing the case for proportional representation, we should not move in that direction. What is best for the Labour Party and the country is to stick to first past the post, which has provided election to the House of Commons with some degree of stability over a long period.
Lord Phillips of Sudbury
My Lords, I will make some practical points in saying why I am in favour of neither this amendment nor the one to be spoken to later by the noble Lord, Lord Rooker, which is not dissimilar. Frankly, if one were dealing in the theory of referenda and the reform of electoral systems at this time, I would find a great deal to favour particularly in the amendment of the noble Lord, Lord Rooker. I will be frank—I have fought and lost five parliamentary elections. The first was for Labour in 1970. At that time, I confess, I did not think twice about electoral systems. I knew, as all Labour and Tory Members know, that the first past the post system was deeply in their favour. One of the problems of discussing reform here or in the other place is that we are all parti pris. We are all conflicted. Nobody can look at this complex but profound issue without party affiliation coming into play.
However, it is also fair to say—the noble Lord, Lord Howarth, expressed it very well—that, before and above that, we are concerned about Parliament: its respect in the country, its effectiveness and its health. I do not think anybody sitting here tonight believes that our Parliament, in 2010, is in good fettle. I do not for one second suggest that the lack of democratic adherence to it is, by any means, solely down to the electoral system. However, I maintain that it is one of the principal reasons why so many of our fellow countrymen do not even bother to vote—to use the precious vote that our forefathers fought so hard for. Four out of 10 do not vote and—I heard this statistic the other night—of those aged under 30, only around two out of six voted in the last election. One principal reason is that unless you are a Tory or Labour supporter your vote is apt to count for nothing. I think as much of the Greens and, indeed, UKIP as I do of the Liberal Democrat Party.
The other thing I know, which deeply affects my feeling about this amendment, is that we have been going round and round this mulberry bush my entire political life. There is always not just one but 10 reasons why we should not have reform now, and why we should wait until we have decided whether there is to be election to the House of Lords, and so on. There are always several reasons. My noble friend Lord Rennard gave, as the noble Lord, Lord Foulkes, kindly admitted, an extremely clear and persuasive history of electoral reform—or rather the failure to have electoral reform—in this country. It is perfectly clear that many organisations and all the parties in this House use AV now. It has no deep defect. What is absolutely unavoidable is that the consequences of bringing in AV at this juncture will profoundly affect all parties in this country.
I come to my last point, which is to admit that the Liberal Democrats are plainly the party that is keenest on AV for electoral purposes. It is in our self-interest—of course it is. However, we also believe—I hope noble Lords will accept my sincerity—that it is also in the public interest, for the reasons I have briefly touched on, to give many more people a stake in government and a useful vote. Incidentally, if any non-Lib Dem was to go around with a Lib Dem on the doorsteps, my goodness, they would hear about electoral reform then. I am not surprised that you do not hear about it if you are a Conservative or Labour supporter.
Lord Campbell-Savours
If it could be shown that by changing the electoral system in favour of STV or AV, turnout did not rise, would that in any way influence how the noble Lord thinks about the proposition on the table?
Lord Phillips of Sudbury
Yes, of course it would, but the noble Lord cannot demonstrate that until we have tried it. It is no good telling us about Ireland or Iceland.
Lord Campbell-Savours
If it could be shown that in Scotland turnout did not rise, would that influence the noble Lord?
Lord Phillips of Sudbury
It would influence me to some extent but I would want to know a great deal more about it before I admitted anything more than that here and now.
Lord Campbell-Savours
I hope the noble Lord is able to attend our future debates on this issue.
Baroness McDonagh
Taking Wales as an example, why does the noble Lord believe that more people turn out to vote in first past the post elections than under other systems there?
Lord Phillips of Sudbury
Noble Lords are now asking me a series of questions at large that need very detailed consideration to be commented on sensibly. All I will say is that I am convinced that, because in many constituencies a Liberal vote, a Green vote or a vote for anything but the prevailing party is a waste of time, common sense says that people will not be engaged with the election in that constituency in the way that they would if they had a vote that counted.
Baroness McDonagh
I am sorry but the noble Lord is saying that if we have a different form of voting system, more people will vote. That clearly has not happened in Scotland and Wales. Will he now change his opinion?
Lord Phillips of Sudbury
I certainly will not. I can speak of this country, where I have fought five parliamentary elections. I know how people in this country—those who are not of the dominant party in the constituency concerned—think about the voting system. It seems blazingly obvious that if you are not of the prevailing party, the tendency not to vote is very strong and has led to the present facts. Please take note of the declining turnout among young voters. They are increasingly disenchanted with the hegemony of our system.
Lord Phillips of Sudbury
Will noble Lords allow me quickly to conclude my speech? The noble Baroness has intervened twice already.
For us on these Benches, it is now or never. It is AV or nothing. We believe AV to be an improvement, and an improvement in the public interest. For those reasons I will not, I am afraid, be tempted to vote for either the amendment we are discussing or those that bear upon it.
Lord Grocott
My Lords, I was going to intervene briefly in any case, but the noble Lord, Lord Phillips, has given me so much material that I cannot guarantee that it will be as brief as I thought. His whole contribution was as though absolutely nothing had happened in the way of electoral reform during the last 15 years. A host of different electoral systems have been introduced. I have not as yet written my memoirs about the period of the Labour Government, but I can reveal to the House this little bit of information. Every time the word went round that we were suggesting there should be a change in the electoral system for Europe, local government, Scotland, Wales or wherever, I always did my best within government to try and prevent that happening. There is a chapter in my memoirs that I shall call “I told you so”. Before the European proportional representation system was introduced, people like the noble Lord, Lord Phillips, although I cannot speak for the noble Lord, and my noble friend Lord Rooker—for on this matter we have not always agreed—predicted with absolute confidence: “Look at all the wasted Labour votes in Surrey and Sussex. Look at all the wasted Conservative votes in the north-east. They will start flocking to the polls as soon as we have a proportional system and their votes won’t be wasted any longer”. It has not happened. That is not me in a seminar saying that. It has not happened.
Lord Phillips of Sudbury
I am grateful for the noble Lord for giving way. We are talking about Westminster elections—not a proportional Euro-election, but Westminster elections.
Lord Grocott
But why on earth, if the noble Lord’s argument does not apply in Europe—and empirically I can show him that it does not apply—why would it suddenly start applying in Westminster elections? I just cannot understand the point.
Lord McFall of Alcluith
Maybe this will help the noble Lord, Lord Phillips. Since devolution took place in Scotland, in 1998, the turnout for Westminster elections under first past the post has been the greatest of all; followed by the Scottish Parliament with proportional representation, which has been less; followed by the European elections, which has been even less. Can the noble Lord tell us why that is?
Lord Grocott
I will even try and trump my noble friend on my knowledge of Scottish elections. I agree entirely with what he said and the implication of what he said. However, is it not also true to say that in what was described as the laboratory of a Scottish election for the Scottish Parliament—where people have two votes, one for PR and one for first past the post; and that is as near a laboratory as you will ever get in an electoral system—in election after election, more people turn out for the first past the post option than they do for the PR option. With this kind of debate, the whole of the discussion takes place as if nothing has happened, A lot has happened. A lot of electoral systems have been tried. Those who were suggesting, insisting on, demanding reform—for there was a huge public demand for a change in the electoral system—have been proved conclusively and unarguably wrong in terms of the benefits they told us would accrue if their proposals were accepted.
Lord Lamont of Lerwick
I am very reluctant to join in the almost filibustering tactics of the Opposition and incur the wrath of my colleagues, but would the noble Lord not reject the idea of the noble Lord, Lord Phillips, that a vote for someone who loses an election is a wasted vote? In a presidential election people lose, but that does not mean that their vote has been wasted. In case the Opposition have not noted it, people will lose under the alternative vote if they vote with their first preference for a losing candidate. Will that be a wasted vote as well? This whole idea of a wasted vote is complete bunkum.
Lord Grocott
I wholeheartedly agree with that, and I speak as someone who has lost nearly as many elections as the noble Lord, Lord Phillips—four, as a matter of fact, all for the Labour party. If anyone should be opposed to first past the post and want to change to any other electoral system, it probably ought to be me. I should add that I have also lost three county council elections and one or two parish elections as well. So it is a pretty abysmal electoral record. However, I have no doubt whatever that as far as local electors in local constituencies are concerned, first past the post is the fairest, best and most understood electoral system. But that is not what we are here to debate. I am not going to filibuster—I can assure the House of that. I am going to stick rigorously and briefly to the amendment that we are debating and try and say why I am opposed to it.
The amendment would give us a choice between first past the post, the alternative vote system and a proportional vote system. People like me used to be at a huge disadvantage—like the noble Lord, Lord Lamont, I have not changed my mind on this over decades—but I support, and always have done, first past the post. Historically, however, we were always at a huge disadvantage. We were asking people whenever we were in debate, “Judge the first past the post system, which you know and with which you are familiar, against these various alternative theoretical systems”, which were unspecified—and particularly, I say without undue criticism of the amendment, unspecified in the choices being put to the electorate here. As for the first past the post system, it is precise and exact. That is what we know. That is what we have lived through. It has its strengths and it has its weaknesses, and we are very familiar with its weaknesses.
As for the alternative vote system, as my noble friend Lord Campbell-Savours has already conclusively argued, it is actually a series of possible options in itself. As for a proportional vote system, there are very nearly as many of those as one can imagine. Whenever I was in a debate with someone about first past the post versus proportional representation, they would always say to me, “Ah, but you’re arguing against that form of proportional representation, not the form of proportional representation that I am in favour of”. When you are choosing between what is known and what is unknown, a referendum of this sort is always difficult. But I am not therefore arguing that you can never put anything to the electorate because, taking that to its logical conclusion, you never could put anything to the electorate as you would always know what is familiar best. I am saying, in relation to this amendment, that if we are to have a referendum—I would prefer that we did not, but if we do—it needs to be as specific as it can be.
I find myself in a strange position. Probably for the first time in my life, I agree with the noble Lord, Lord Rennard. I do not think that this amendment is helpful. It does not have the precision of the proposal currently on the table: it is first past the post versus the alternative vote system. That at least has the merit of clarity, although I would much prefer that we did not have either.
The noble Lord, Lord Rennard, helped the House—at least it was helpful to my line of argument—when he conceded, and he can correct me if I am wrong, that for him, and I would assume that it would apply to whatever referendum question went to the public, this would only be a short-term solution. This is a referendum about work in progress. I must say that that alarms me.
I think that I can probably help the noble Lord, Lord Strathclyde, in his summing up. His Liberal Democrat colleagues rightly have been asked: “How long? Should this referendum result in a yes, for how long would it stand?”. The Liberal Democrats have already given us their answer, which is basically: “As short a period as possible. We want to move on rapidly to full PR or whatever”. I can guess what the answer of the noble Lord, Lord Strathclyde, would be if he were asked: how soon after a yes or no vote should the matter be put to the public again in a referendum? I would guess that his answer would be, “We wouldn’t want to touch that with a barge pole”. I think that that would at least be a straightforward and honest response. But as far as this proposed amendment is concerned, it is not one that should be attractive to the House.
Lord Snape
It is a pleasure to follow my noble friend Lord Grocott. So far in this debate it has been the other way round. He will not be surprised to learn—I do not know how gratified he will be—that I agreed with every word that he has said, too. Like him, I am a fan of the first past the post system. Unlike him—purely coincidentally, I am sure—I have had a bit more success, which is probably the best argument against first past the post that either side of your Lordships’ House has come up with. Certainly I do not find much favour with the amendment due to the various alternatives that it provides. No one listening to this debate could doubt the sincerity of the noble Lord, Lord Phillips, although I found some of his conclusions somewhat confusing, to say the least. We talk about young people and politics. There will be lots of young people interested in politics demonstrating outside this building this week, largely because politicians who make promises and then immediately break them do not greatly enamour themselves to those young people.
Lord Campbell-Savours
Perhaps I may remind my noble friend that the only party that has consistently supported and campaigned for AV is the Labour Party. We are the only ones to have done so. Am I being helpful?
Lord Snape
My noble friend is indeed being helpful and I am grateful. The fact is that we got it wrong. At least that is certainly the opinion that many of us hold, and we will continue to get it wrong if we continue to support it. I accept the sincerity of my noble friend and my noble friend Lord Rooker. I remember a conversation that I had with him in 1987 after the then—from the party’s point of view—unsuccessful election. I asked him why he was in favour of PR. I cannot imagine why we were discussing PR—we must have been stuck on a very long train journey. I hope that I am not betraying any confidences when I say that my noble friend was brutally honest and said, “Because we can’t win under the present system”. However, we did eventually win under that system. The Liberal Democrats argue that they cannot win under the present system because their votes are diffused throughout the United Kingdom. I understand why they campaign in favour of proportional representation and I would understand them supporting some parts of the amendment before your Lordships tonight. However, I wish that they would be a little more honest, as was the noble Lord, Lord Phillips, in their declared support for AV. It is totally in their interests, although it is against everything for which they have campaigned for over 100 years.
Lord Baker of Dorking
I feel that I almost have to ask permission of the Labour Party to participate in this debate. For the past hour and three-quarters, we on this side of the Committee have been privileged to attend a Labour Party seminar on electoral reform. It has been a fascinating experience and the advocacy from the other side for every possible system of voting has been heard in this Committee. I feel almost sympathy and sorrow for the noble and learned Lord, Lord Falconer—not a sentiment that I often feel—because he is supposed to be representing Labour Party Front-Bench opinion. I do not know what threads he is going to draw out of what he has heard this evening. Do I see a conversion to first past the post for a Front-Bench speaker? That is not consistent with what his leader is saying. The leader of the Labour Party is totally opposed to most of the views that have been expressed on the Benches opposite. I do not want to intrude any further into private grief.
Lord Snape
I am grateful to the noble Lord for giving way. Has he taken a look at his own Front Bench lately?
Lord Baker of Dorking
My Front Bench are wonderfully consistent. Their consistency consists of retaining power for as long as possible, and I look upon that as an essential political talent. Over the past hour and three-quarters we have seen the Labour Party approach constitutional reform with a spirit of confusion, illogicality, incoherence and low cunning. That is entirely consistent with the attitude that they showed in government, and it indicates why they should never be trusted with reform of the constitution of our country.
Lord Liddle
I was very tempted by the amendment of the noble Lord, Lord Skidelsky, because I should like to see a wide-ranging debate about all forms of electoral reform in this country. I am very tempted indeed by the amendments of my noble friend Lord Rooker, which go for a two-party arrangement, first seeking the people’s opinion on whether in principle they want change and then asking them what system in particular they want. That is an amendment that deserves the support of many people on our side of the Chamber.
So far as concerns the general question of why we need a debate on this issue, I think that we should set aside questions of party advantage. I know that people will laugh at that but I think that we should do so and ask ourselves whether the present system has legitimacy. The first general election in which I canvassed and campaigned was the 1964 general election, when the Labour Party and the Conservative Party got more than 85 per cent of the votes cast. The two parties were overwhelmingly dominant in our politics. But when you look at the result of the last two general elections—2010 and 2005—you see that the two major parties won only about two-thirds, 65 per cent, of the votes cast. This is not legitimate. You cannot have a system, which is an alleged two-party system, in which the voice of 35 per cent of the electorate is not being effectively heard. That is why we have to have a big debate in our country about electoral reform.
There are many arguments made against electoral reform, such as that it will result in weak government because there have to be coalitions. However, although I do not agree with the Conservative/Lib Dem coalition, I do not believe that it is a weak Government. I think it is quite a decisive Government who are getting on with doing a lot of things I do not particularly like. It blows a hole, however, in one of the arguments against proportional representation, which is that it would result in a coalition politics that would mean that nothing would ever get done.
There is a strong argument to be made for the sake of the country. The late Lord Jenkins, of whom I was a great admirer, attached a lot of importance to the belief, based on his experience in the 1980s, that it was a very bad situation indeed when there were no Conservatives in the county of Durham and no Labour people in the county of Surrey. What you got was a polarisation of the country when in fact what you want is a system of representation where there are Conservatives who have to represent the deprived areas of the north of England and there are Labour MPs who represent the more affluent districts. That would be good for the country and would produce a more legitimate system. That is why I support electoral reform; why I am tempted by the amendment of the noble Lord, Lord Skidelsky, but am not going to support it; why I would definitely support the amendment of the noble Lord, Lord Rooker; and why I very much support the principle of a referendum on some change.
Lord Sewel
My Lords, in a previous existence I used to teach something called social science research methods, which was basically reduced in large part to constructing questionnaires and getting undergraduates to go out and ask people in various ways which way they would vote if there was a general election tomorrow. There never was a general election tomorrow, so the results were always slightly erroneous and had no predictive basis whatsoever.
The amendment in the name of the noble Lord, Lord Owen, says:
“At present, the UK uses the ‘first past the post’ system to elect MPs to the House of Commons”.
Then we get this wonderful sentence:
“It is proposed that the system should be changed”.
Let us note the two words “proposed” and “changed”. You are actually sensitising the respondent to the desired response, because everyone accepts on that basis that it is proposed, so it is a good thing: and “change”, as we know, is a very powerful word—think of Barack Obama. It is a false question in terms of equal balance because you are making clear the direction of the desired response just by using those two words: “proposed” and “changed”.
We then get on to the more substantive issue of linking the first past the post system, which is actually undefined, with the alternative vote system. The one thing that we have learnt during the debates and discussions on this is that we do not know whether there is “the” alternative vote system. Very different types of systems claim to be the alternative vote system, but there is not one “the” alternative vote system.
Lord Falconer of Thoroton
My Lords, that was a fantastically revealing debate. The noble Lord, Lord Skidelsky, delivered an extremely good speech that was rational, reasonable and sensible. It basically said that, if we are going to have a debate about constitutional reform, let everyone have a reasonable choice. Unfortunately—this is no fault of the noble Lord, Lord Skidelsky—he has absolutely no understanding of what is going on in relation to the proposal for constitutional reform that is being advanced.
For the past 13, maybe 20, years, our approach to constitutional reform as a nation has been that this House has the role at least of producing as good a constitutional reform as we can. The work of the Cook-Maclennan report, which had lots of years behind it, was to produce the best constitutional reform. Extraordinarily, this constitutional reform, unlike any other constitutional reform I can remember, is being conducted without Parliament having a view on it. Individual parliamentarians like the noble Lord, Lord Lamont, who delivered an excellent speech, have a view on constitutional reform, but neither Parliament, nor indeed the Government, has a view on this reform. They had a view on devolution in 1997, and Parliament had a view on the Common Market in 1975, but this is a process, not support for constitutional reform.
The perfectly reasonable amendment in the name of the noble Lord, Lord Skidelsky, therefore meets a car crash. The first part of the car crash is the noble Lord, Lord Phillips, who, with eyes popping with sincerity, tells us that he is strongly in favour of AV, having never supported AV before. The noble Lord, Lord Rennard, then gets up and says that he has been talking about constitutional reform since he was 15—I rather agree with the noble Lord, Lord Foulkes, when he says “poor Lord Rennard”, whom we greatly admire in this House—and he says that he supports the alternative vote system. This lot on the Liberal Democrat Benches are therefore standing on their heads. The noble Lord, Lord Phillips, has the nerve to say that they are doing this to restore the people’s trust in our parliamentary representatives by adopting a system that the Liberal Democrats have opposed for so long and which, as has often been said, is described by Mr Nicholas Clegg as “a miserable little compromise”. The public think that they are doing this to get more seats, not because they are sincere, so they are eroding public support. Sensibly, the party opposite has remained completely silent throughout this debate in relation to whether there should be a change to the electoral system. Members opposite looked patronisingly on the Liberal Democrats for being so easily gulled into behaving in a way that brings the whole system into contempt.
The noble Lord, Lord Baker, in an embittered little speech, had the nerve to say, “I have been privileged to listen to a seminar on electoral reform from the Labour Party”. Yes he has, and he is lucky to have done so because no one else in the whole country appears to be debating what the right system is. Surely the least the public could expect is Parliament debating what the best system is, because no other debate is going on. In answer to the noble Lord’s question about how to bring all the strands together, I have great sympathy for the amendment in the name of the noble Lord, Lord Skidelsky. There are problems with it. It is pretty eccentric to choose an electoral system on AV when you are asking the public to determine whether they like AV best. I understand why that is being done—it is a rational way of doing it—but I am afraid he is wasting his time because this constitutional reform is motivated not by what the best constitutional reform is but by a grubby deal that was done that had no reference to what was best for the public.
Lord Phillips of Sudbury
The noble and learned Lord has made a rather passionate attack on my position. I am not standing on my head and I have not argued anything other than that I believe that this referendum should be held on an AV system, and I have explained why.
Lord Falconer of Thoroton
I was under the impression—obviously wrongly—that on previous occasions the noble Lord had supported AV+, as suggested by Lord Jenkins. Indeed, his party supported that, but I was obviously wrong.
Lord Maclennan of Rogart
I am extremely grateful to the noble and learned Lord for his kind references to the agreements arrived at between Robin Cook and me. He will also remember in the context of his suggestions that this is just a stitch-up: that the Labour Party in Government did not implement the Cook-Maclennan proposals on electoral reform, despite a manifesto commitment to give the public the opportunity. In those days the Labour Party was not in favour of PR; yet it committed itself to giving the public a choice. Where is the difference now?
Lord Falconer of Thoroton
The noble Lord is right. We did not implement Lord Jenkins’ proposals. We said that if we were going to implement a change, there would be a referendum. I fail to see how that justifies implementing a system of election which Lord Jenkins said would sometimes lead to greater disproportionality than the present system. As the noble Lord, Lord Lamont, has said, that leads to the second party’s second preference votes having no say in the answer. Although he is absolutely right to condemn us for that, I do not think that it allows the public to have sicked upon it a system that absolutely no one wants. My position on the amendment in the name of the noble Lord, Lord Skidelsky, is that I admire his logic in proposing it, but I would not support it because of the technical changes. In a sense, I think he is wasting his time.
Lord Strathclyde
If noble Lord, Lord Owen, had been here—like others I wish him well—I am sure that he would have been immensely proud of the way in which the noble Lord, Lord Skidelsky, moved his amendment. I expect he would also have been reminded of the reasons why he left the Labour Party in the first place.
The purpose of the amendment is to give people the choice of a proportional system along with the choice of first past the post and the alternative vote. As the noble Lord, Lord Skidelsky, explained, they had previously tabled an amendment giving a choice of AV+, AMS or STV but had subsequently changed their amendment, so it was not about specifically wanting to pose AV+, AMS or STV as options in their own right but to pose the principle of PR as an option.
We believe that on an issue as fundamental as voting reform, the public need to be given a clear choice that will produce an equally clear result. The key point is about the impact that this sort of approach will have on the result. I understand that the noble Lord wished to see a multiple choice of voting options, including some form of PR. However, for the sake of simplicity—this is the crucial point—it is better to present people with a simple yes/no alternative, exactly as set out in the Bill. Multiple choice questions go against the recommendations of the Lords Constitution Committee report on referendums, which concluded that the presumption should be in favour of questions posing only two options for voters. That is one of a number of many points on which we agree.
A referendum on AV replacing the existing system will give a clear choice to the electorate, with the ability for them to express a clear view. Offering more than one choice could lead to an indecisive result and confusion over the interpretation of the result. The watchwords that we need to stand by when holding any referendum are simplicity, clarity and decisiveness. We would risk disregarding each of those if we went down the road suggested by these amendments.
The question in the Bill as it currently stands reflects the recommendations of the Electoral Commission, which tested the question through focus groups and interviews with members of the public as well as through input from language experts. This amendment risks going against that independent advice from the Electoral Commission, which recommended that, unlike a question requiring a yes/no answer, this style of question has never been used in a UK-wide referendum, and, as such, fuller testing would need to be undertaken before recommending this style of question ahead of a more traditional yes/no question.
Lord Campbell-Savours
If during the referendum campaign the noble Lord, Lord Strathclyde, is in a television studio and is asked why the public cannot decide on the system that they want—first past the post, a variant on the alternative vote system or a proportional system—how would he reply?
Lord Strathclyde
I would reply that this is the system passed by Parliament: that, in particular, the House of Commons agreed on the system, as we did—if that is what has happened—and that is why we have the choice of AV. As to why we have AV above the other systems, no doubt we will get to that in other debates. Of course, AV is the one that preserves best the link between elected Member and constituency.
Another issue is that the wording in the amendment could influence voters, as it says:
“It is proposed that the system should be changed”.
The Government are neutral on which voting system should be used, and that statement could be misleading.
In these amendments there is not even an indication of the kind of proportional voting system that the public would get if they voted for this option or of how this type of system would work. One attraction of the approach taken in the Bill is that for all the arguments there might be about how AV works, the Bill sets that out in Clause 9 and in Schedule 10. Any questions about how AV works can be resolved by looking at the Bill, which would not be the case with these amendments. The results might be a lack of clarity and voter confusion.
Lord Sewel
For the sake of completeness and comprehensiveness, would the noble Lord agree, given the weaknesses of the definitions under proposed new paragraphs (a), (b) and (c), that for the sake of completeness there ought to be mention of the additional Member system that has at least been tried and used in parts of the United Kingdom?
Lord Strathclyde
That is a matter for the noble Lord, Lord Skidelsky, and not for me. I hope that he will not press his amendment. I know that he wanted a short debate about these matters—he may have got more than he bargained for—and I hope that he will reflect carefully about what I and others have said. I urge him to withdraw the amendment.
Lord Skidelsky
I am grateful to all those who have taken part in the debate, particularly to the two Front-Bench spokesmen for the cogent and gracious way in which they summed up the issues that the amendment raised. I have four concise points to make. First, I very much appreciated the speech of the noble Lord, Lord Lamont. He made a very powerful case against the alternative vote—he might even have persuaded me of its demerits—but I emphasise that the amendment was not about the merits and demerits of particular voting systems; it was designed to give people a choice.
Secondly, it was said that voting reform is not a subject of interest to the mass of the people; it is of interest only to the chattering classes. I think there are quite a large number of chattering classes in this country, and if you call them professional classes they may even constitute a majority. They are interested in subjects such as this, so that is simply wrong.
I am not convinced that ordinary people are incapable of understanding the principle of proportionality. I think that it is a very reasonable question to put and that people will know what you mean and how it differs from first past the post and the alternative vote.
Finally, no one addressed the issue I raised in my speech of whether a simple choice, of the kind that the noble Lord, Lord Strathclyde, supported, is worth a referendum. Referenda ought to be preserved for grand issues of constitutional import, and a measure of this kind, which would make a marginal change in the voting system, is not worth a referendum. No one really addressed that.
Having said all that, I am very grateful. I do not propose to test the opinion of the House on this amendment, and I therefore ask leave to withdraw the amendment, but I give notice that I may return to it on Report. Thank you very much.
Arctic Ice Cap
(13 years, 5 months ago)
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Lord Jay of Ewelme
To ask Her Majesty’s Government what assessment they have made of the economic and security implications of the melting of the Arctic ice cap.
Lord Jay of Ewelme
My Lords, my interest in the Arctic stems from my interest in climate change. It seems to me to be entirely appropriate that we should be discussing this aspect of climate change, the Arctic, when climate change negotiations are taking place in Cancun. I very much hope, though not with every expectation, that the negotiations in Cancun have a greater chance of success than those that took place in Copenhagen a year ago. By focusing on the Arctic, I do not do so at the expense of the focus that needs to be continued on those who suffer most from climate change, particularly in the poorest countries of the world.
The issue this evening is not whether climate change is happening or who or what caused it. The issue is that change, dramatic change, is occurring in the Arctic with potentially profound implications, including for British interests. The question is whether we are doing enough now to protect and promote our interests in the future. The subject might be less immediate than many discussed in your Lordships’ House, but other nations are reacting to the changes they see or foresee. Our interests are affected too and my concern is that, if we do not take them seriously now, we may well regret that later.
The Arctic is the fastest warming region on Earth. By 2007, it had lost half the ice that existed in 1950—over one million square miles of ice, roughly equivalent to one quarter of the United States. The result is that the Arctic is becoming more accessible. In 2007 and 2008, the north-west passage was opened for two weeks. In August last year, two German commercial ships, unaccompanied by icebreakers, traversed the North Sea route from Vladivostok to the Netherlands. These routes are substantially shorter than the traditional sea routes from east to west and vice versa. They are, of course, only navigable for short periods and there is always the risk of ice and of atrocious weather in hostile, not-well-charted waters. My father was captain of a naval escort ship which escorted Arctic convoys during the Second World War and his description of conditions in the Arctic were not for the faint-hearted.
These seas, the Arctic Ocean, are not going to become the new great sea route for the world in the next decade, but, in 20 years or so—by which time scientists expect ice-free summers—they might. When they do—and I believe that it is a “when” and not an “if”—will there not be opportunities for maritime nations such as ours? Might there not be scope for developing again some of the great ports of northern England, Scotland and Northern Ireland to service the new shipping lanes? Are there not huge opportunities, too, for our insurance companies and our insurance markets? I hope that the Minister will comment on that.
Meanwhile, there is already great interest in the prospect of mineral extraction from the Arctic. Here too, there are risks and opportunities. The risks, of course, are the environmental catastrophes that can follow mineral and especially oil extraction, as we have seen already in Alaska and, more recently, in the Gulf of Mexico. There is at present uncertainty over the likely timescale for exploiting the Arctic; much will depend, as always, on demand, on price and on technology. However, present estimates—and they can only be estimates—are that 13 per cent of so-far-undiscovered supplies of oil in the world, 30 per cent of natural gas and 20 per cent of natural liquid gas, could lie in the Arctic. The Arctic already currently produces about 10 per cent of the world’s oil and 25 per cent of its gas, and those figures seem bound to increase. Here again, the opportunities for Britain companies that are used to operating in some of the world’s most inhospitable zones are great, so what is being done now to maximise their chances of success? What scope will there be for fisheries in our increasingly ice-free Arctic? My understanding is that Iceland, Norway and Russia are already interested in investing in large fishing fleets with an eye to Arctic bounty. What is Britain doing? Is there scope for replacing some of the declining traditional fisheries with fisheries in the Arctic? Will we allow others to gain the advantage here, or will we take it ourselves?
There is significant change under way in the Arctic, with important implications for Britain. It is therefore equally important that we should remain fully involved in international negotiations and discussions about the future of the region. There are many British academic and non-governmental organisations with great experience and expertise and with much to offer others. The British Antarctic Survey, which has an important Arctic dimension and a deservedly high reputation, is one, but intergovernmental co-operation is crucial. The key forum is the Arctic Council, consisting of the Arctic states: Canada, Denmark, Finland, Iceland, Norway, Sweden, Russia and the United States. The UK is an observer and, indeed, an active observer, and rightly so, but there is a move among Arctic states members to limit the role of observer states, including the United Kingdom. Can the Minister give an assurance that we will continue to be closely involved in the work of the Arctic Council, given its importance and our experience and interests in the region?
However, the Arctic Council covers only some Arctic issues, essentially protecting the environment, which is, of course, crucial. Other international organisations have a key role too, for example, the International Maritime Organization, for shipping issues, or the UN law of the sea conference, but other issues, including, crucially, security, are less obviously covered by existing institutions. Sovereignty is not always clear. We all remember, I suspect, the Russian flag planted on the Arctic sea bed a couple of years ago to stake a sovereignty claim. How are territorial disputes linking, for example, to oil fields, to be resolved as the Arctic becomes more widely navigable and exploited?
I do not know how often Arctic affairs have been discussed in your Lordships’ House, but I would guess that they will be discussed pretty regularly in the future, as the significance of the melting of the ice cap becomes more apparent, and with it the important implications for British interests. I look forward to Minister's response.
Lord Jenkin of Roding
My Lords, we are deeply indebted to the noble Lord, Lord Jay. I am sure that he is right in saying that this is just the first of the debates we shall have on the Arctic. He mentioned the pace of the melting of the ice. This is nothing new. When Nansen’s “Fram” drifted across the Arctic Ocean, it took three years to get from the Bering Strait to clear water off Greenland. When the French boat “Tara” did it in 2006, it took just two years. Indeed, the Arctic flow is twice as strong as it was 100 years ago, and that is a pretty dramatic change. In 2007, the summer ice shrank to half the level that it was in the 1950s and 1960s, as the noble Lord said. I would like to draw to the attention of the House another phenomenon, which scientists call the Albedo effect. The sunlight shining down on ice or snow is almost all reflected and only about 15 per cent goes to warm the seas underneath. If there is clear water, 95 per cent of the sunlight warms the water. Therefore, as the amount of clear water in the summer increases, so the Albedo effect has an accelerating impact on the melting of the ice. This is the reason why the Arctic is growing warmer faster than anywhere else in the world.
The noble Lord raised a number of questions, but there is no doubt about it: this has greatly encouraged the huge search for minerals. There is a difference. Off Alaska, the American environmentalist movement has now made it extremely difficult for international oil companies to prospect for oil with any prospect of being allowed to do so. Shell, one of the big companies there—a British company— is at the moment marking time on this. If one looks across to Siberia, however, the Russian experience is very different. There are, as I have heard described, staggering quantities of gas as well as oil. During the Soviet era, there were enormous and immensely damaging changes to the environment. That is now being corrected by the new Russian administration. The Russians have at least three very major projects offshore of the Siberian coast. Much the biggest is the Shtokman gas field, which is—noble Lords may be surprised to learn— the second largest gas field in the world, though in immensely challenging, hugely deep water.
The noble Lord referred to the ice cap; but of course, there is no land under the North Pole—it is all ice. It is immensely deep water, sometimes four or five miles deep. There are huge icebergs, but in Alun Anderson’s book After the Ice, which first attracted me to this—and I really recommend anybody who is interested in this subject to read it; it is a fascinating compendium of facts, history and forecasts—the author described the Shtokman field as,
“the hottest groundbreaking project in the entire Arctic, and Russia is driving it forward”.
That is something of which we really need to take account. If one looks at the deeper water further north, it is even more difficult. The combination of accelerating warming and this advancing technology poses, as the noble Lord has said, huge challenges for us all, and I, too, look forward to my noble friend’s reply from the Front Bench as to what we are doing about it.
Lord Teverson
My Lords, I am absolutely sure that the noble Lord, Lord Jay, is right that we will be discussing this topic on many occasions in future. I find it one of the most interesting topics because views on the Arctic are some of the most diverse that there are. If one reads the press cuttings and look at the news, whether it is the two Mir exploratory submarines of the Russian Federation or whatever, the Arctic is going to be, or already is, the second Cold War, with all the military threats that there are, including the resource wars—all of that is a real threat to global security. On the other side, I was at a meeting not that long ago of heads of parliamentary foreign affairs committees in Prague. I was speaking to my Danish colleague—Denmark being, because of Greenland, one of the Arctic Council nations—and I mentioned all these issues about the north-west passage, international waters and resources, and she looked at me completely calmly and said, “No, the Arctic Council has all of these under control. We are discussing them all and we are doing that within international law and everything will be resolved. Robin, don’t worry about it. Worry about everything else, but that one, as Arctic nations, we’ve got sorted”. That is a paraphrase.
The Arctic is of great interest to us. First, the Arctic is the leading indicator of global warming. As the noble Lord, Lord Jenkin, said, an important factor is the reflective effect of the polar ice cap, which will lead to the increase in methane in that area that we already see elsewhere in our planet’s atmosphere. We have international shipping; we have the strong Canadian view that not all of these waters are international waters, and that it has national control over many of these areas, and so there is potentially a dispute with the United States, among others, and those other nations that might want to use them. There are commodities there, including 100 billion tonnes of hydrocarbons—25 per cent of global reserves. All of that is there to be fought over; I refer to territorial claims and the 1,200 mile-long Lomonosov Ridge—and I am not sure whether I have got that pronunciation exactly right— Ridge that extends across much of that area.
From my humble position, I see that there are things that need to be done, and I would be interested in the Minister’s reply. First, in terms of world security, global warming is the one thing that needs to be sorted out in this area, but that is not just an Arctic issue. In terms of territorial disputes, it is most important that we persuade and cajole the United States to finally become a signatory to the United Nations Convention on the Law of the Sea, through which these disputes and boundaries can be resolved amicably.
As regards drilling and the way in which these resources will inevitably be exploited, this year, the Gulf of Mexico has shown that we need very stringent terms and conditions in terms of the way in which those minerals are exploited and in terms of the emergency facilities when that does not work. As to international seaways, we need to look to Canada to talk very closely and carefully with the international community to resolve international waters conversations and disputes in a way that everyone is able to respect. We also need to increase hugely our communications ability in respect of emergencies and the seaway. But, most of all, I ask that we encourage—the EU and the United Kingdom should participate in the Arctic Council—the use of these methods to come to a peaceful, long-lasting and legal framework for resolution of these issues.
Viscount Waverley
My Lords, the Arctic has a magical attraction posing special physical challenges—remoteness, ice and extreme temperatures, with long periods of darkness. But as the region warms in the decades to come, the ice cap will gradually melt and its ecosystems change. Technology will improve and commercial opportunities will present shorter shipping routes, fishing grounds, new destinations for commercial tourism, and new oil and gas development opportunities. The United States Geological Survey 2008, for example, has estimated the potential magnitude of the resources in the Arctic as containing, as we have already heard, 90 billion barrels of oil, 1,700 TCF of gas and 44 billion barrels of natural gas liquids, all equating to some 10 years of current global oil and gas demand.
A framework for the staged implementation of performance-based standards is required therefore to govern Arctic offshore oil and gas exploration, development, production and transportation, which must take into consideration the special challenges of the Arctic environment, and so enable compliance integrated with regulatory arrangements. Therefore, co-operation between industry, regulators and other stakeholders is a fundamental.
The central question that comes to my mind is, “How is a global treasure to be developed in a manner which provides, yet preserves?”. International and national interest in mitigating and adapting to future changes to make responsible development happen has led to calls from Arctic and non-Arctic nations to anticipate and assess the new levels of activity to the region. Effective governance through Arctic-specific international standards, and adapted national regulations and standards, is critical in managing and mitigating risks and securing safe, reliable and environmentally responsible development. Many commentators choose to view the changes in the Arctic in terms of security; namely, energy security, environmental security and human security.
If the Arctic is to be developed, and there is no possibility of this not happening, it is essential that international co-operation on science, planning, inclusive engagement, standards of operation and safety is ensured. Have we got to the stage that world players, Governments and private sector alike have the experience and technology to develop in a manner that causes no future long-term regret? Have we learnt from the Gulf of Mexico oil spill, including what went wrong and what will be done to prevent a similar occurrence? A constant concern is whether sufficient emphasis will be placed on addressing the wishes and needs of the Arctic’s 4 million inhabitants. The Arctic is not about taking short-cuts and the residents of the region should be brought on board at an early stage of planning.
In 2009, the Aspen Commission on Arctic Climate Change of the Aspen Institute identified initial principles of Arctic governance as forming the foundation and the standards by which future governance and sustainable management of human activities in the Arctic marine environment should be measured. Building on those principles, the Aspen commission is in the throes of publishing its final report, which is expected to report its recommendations in January 2011.
I expect a number of points to emerge, the most important of which is to ensure the strengthening of the Arctic Council to allow it to follow through on all recommendations, including those of the Aspen Institute. Other points I expect include, first, that marine spatial planning should be the innovative tool to implement and measure success over time of ecosystem-based management across sectors and large marine ecosystems. It should be noted, however, that the starting point of such a process should be the formulation of clear development objectives. Secondly, a new Arctic marine conservation sustainable development plan should be called for and should recognise that the region’s challenges are not limited to national concerns. Launching such an effort would require high-level ministerial engagement, if not that of the heads of state of Arctic Governments. And thirdly, an Arctic science programme should be implemented and integrated as part of an Arctic marine conservation sustainable development plan, using an open-source information network. The Arctic high seas, for example, should be designated as a science reserve to signal a new level and scope of international co-operation and collaboration. A specific plan should be developed to gather the scientific information urgently needed to make informed decisions about the region’s future.
A real opportunity exists for a new era of international co-operation in the Arctic, allowing for objective and balanced debate to defuse and pave the way for the development of this global treasure. The noble Lord, Lord Jay, has played his part by raising the critical need for debate at this early stage. He should be thanked.
Lord Rotherwick
My Lords, the principal driver of the temperature of the earth is the sun and fluctuations have occurred for as long as measurements have been recorded. The Arctic is among the most sensitive to temperature fluctuations and consequent changes in the ice cap. Notwithstanding the downsides of the melting of the ice cap, one of the upsides, as mentioned by the noble Lord, Lord Jay, is the increased accessibility of the north-west passage. This opens up considerable economic and environmental benefits, providing scope to obviate existing security threats in the Gulf of Aden and introducing alternative routes to the Suez and Panama canals.
Nor should we ignore Greenland, an autonomous country within the kingdom of Denmark, located within the Arctic Circle. It is the world’s largest island and owes its name to the agricultural opportunities that settlers were keen to exploit—a green land that as a private pilot I have landed on a number of times. Populated for around 5,000 years, the Norse Vikings established farmland settlements around the year 1000 AD, something which would have been impossible in 1900. However, even at the time of the Vikings’ presence on the island, almost the entirety of the land mass would have been covered by at least a 1 kilometre sheet of ice, yet the climate along the coast was conducive to supporting an agricultural community, attractive in its similarity to the lifestyle of the Scandinavian farmer of that period, based on arable and livestock farming.
Approximately 85 per cent of the island is covered by ice and Greenland benefits, as we have heard, from valuable fish stocks, an issue which ended its brief membership of the European Community in the 1980s. Its natural resources include coal, iron ore, lead, zinc, molybdenum, diamonds, gold, platinum, niobium, tantalite, uranium, fish, seals, whales and hydropower—quite a lot. Additionally, there are significant potential oil and gas fields, especially in the northern and north-eastern parts of the island. The current economy remains critically dependent on increased catches and exports of shrimp, Greenland halibut and, most recently, crabs. These represent around 82 per cent of the country’s total exports.
Opportunities for fishing in Greenland may be widened further but the scope to broaden its economic position in respect of other natural resources should not be discounted. For example, the increased interest in hydrocarbon exploration off Greenland’s western coast represents a significant opportunity to deliver both economic and environmental benefits. The potential abundance of hydropower generation could also become a considerable source of power. Similarly, there has been an increase in tourism in Greenland. Cruise liners now operate in the western and southern waters during the peak summer tourist seasons. Although debates on topics of this kind tend to be characterised by the threat of impending doom, we should not forget that opportunities will emerge. We should be alert to them and include them in our considerations.
Lord Alderdice
My Lords, the noble Lord, Lord Jay, to whom we are indebted for achieving this debate, started his speech by asking whether your Lordships’ House had paid much attention to the Arctic in the past. Perhaps one of the notable references was that of Lord Dufferin, who, as a young man in his 20s, took a wooden sailing boat and sailed the whole way to Spitsbergen. This was before he went on to be ambassador at St Petersburg and Paris, Viceroy of India and Governor General of Canada, where he is still favourably remembered.
In those days, the voyage was not much followed up because although Lord Dufferin wrote letters to his wife which were published in Letters From High Latitudes, it was a cold and difficult place. There were much better places to go for resources, such as in the scramble for Africa, the struggle over South America and North America and of course in the Far East. Indeed, every century seems to have seen a scramble or race for somewhere. In the latter part of the past century, it was probably the struggle for space.
One characteristic of every one of those struggles was not just that it opened up new lands in order that there would be more resources available, but that it ended up with military struggle—the struggle for power and control. While we think of the situation in the Arctic and the melting of the waters in environmental terms—I understand that today it is expected in Ottawa that the Minister may well declare a scientific park just off the north of Baffin Island—and although there has been much said about the economic consequences, we must think about the security consequences. Those are the questions that I would like to add to those that have already been raised by other noble Lords when my noble friend comes to reply.
My old friend Bill Graham, when he was defence Minister in Canada, remarked on the fact that the melting of the Arctic ice opened up great opportunities but also real threats. Canada has sent military equipment and men into the region in order to identify its own interests and show that it has the capacity to defend them should the time come. In 2009, the president of the United States in a presidential directive indicated potential security concerns in the region, and Russia has for quite a substantial time had a major military presence on the surface and more particularly under the surface in the region.
We have always to some extent—although this was not entirely true during the Second World War when a threat did indeed emerge from the north—felt that there was some degree of protection. That is not the same if it is possible to traverse the areas easily. Not least at a time when austerity has forced us to cut back on our military naval fleet, it is important that part of our strategic defence thinking over the next number of years should include not just the opportunities, which are marvellous and the requirement to protect our world, but the potential threats to our own security and that of the European Union.
This is not solely a matter for ourselves of course. It is clearly a northward shift of emphasis for NATO. If one looks at the map not from a normal perspective of Britain being right at the centre but looks down at the world from an Arctic projection, one sees a northern equivalent of the Pacific rim, where there is a major confrontation between Russia, which has half of all the coastline, Canada and the United States and, as has been mentioned, Denmark in the form of Greenland, as well as Norway. I am keen to hear from my noble friend what our security advisers are telling us about the need to protect ourselves and our national interests, and what is being discussed at NATO in this regard where there is a much greater and more obvious responsibility.
Lord Greenway
My Lords, I agree very much with the noble Lord, Lord Jay, when he says that he does not think we will see a great new northern sea route coming into play within the next 10 years. I suggest it will be quite a few years beyond that. Most of the voyages that have been made round the north-east passage rather than the north-west passage, which is over the top of Russia, have been experimental. We can go back to 1997 when a Finnish tanker made the voyage. More recently, as the noble Lord said, two German freighters made the voyage but not, as he said, from Vladivostok to Holland; in fact, they came from South Korea and went over the top to Rotterdam. They stopped off on the way at Novyy in Yamburg province which meant they had icebreaker escort and had to take Russian ice pilots.
This year, a Danish bulk carrier “Nordic Barents” carried 41,000 tonnes of iron ore from Kirkenes on the Norwegian-Russian border to Qingdao in China. The Russian shipping company Sovcomflot sent a relatively large tanker—117,000 tonnes deadweight—the “SCF Baltica”, loaded with 70,000 tonnes of gas condensate from Vitino and Murmansk to Ningbo in China in 22 days. She was also escorted by three icebreakers.
Sovcomflot is preparing to send an even bigger tanker—162,000 tonnes—on a trial voyage next year. However, here we come up against draft restrictions. At the moment the Sankov and Sannikar Straits are restricted to 12.5 metres and 13 metres respectively and larger ships, drawing more than 15 metres, will be forced to go further offshore into higher latitudes, where the risk from floating icebergs is greater.
Companies which have sent ships around the north have said that they are very satisfied—it cuts 4,000 miles off the voyage, it saves them paying Suez Canal dues and saves the piracy problems. If a much larger amount of shipping was to go round the north of Russia, and if one was to believe from WikiLeaks’ revelations that Russia is a mafia state, I can see various Russians becoming very interested in what was going around their shores and there is nobody there to help ships, unlike going through the Gulf of Aden.
One possible drawback to the northern sea route is attracting the attention from the green and climate change lobbies. One report suggests that the release of CO2 and engine particles—that is, black carbon or soot as we know it—from diesel engines in a sensitive area as regards climate change could lead to an increase in global warming.
Other reports suggest that up to 2 per cent of global shipping traffic could be using northern sea routes by 2030, rising to 5 per cent by 2050. To put that in context, today 4 per cent of world shipping uses the Suez Canal—that is an enormous amount of shipping. To be quite honest, I cannot see it happening for a very long time.
The other thing to take into account, which has not been mentioned, is that at the moment, with global warming, we have a two-month window in effect for shipping but the winter is still frozen over. Shipping is not going to suddenly take to using these Arctic routes. I think the likelihood is that it will be reserved for bulk cargoes, both wet and dry, mainly exports from Russia. The main container trades, I would suggest, are very unlikely to start using these northern routes. I want to give an example of the mileages—Hamburg to Yokohama going by the northern sea route saves about 4,000 miles; to Hong Kong you save about 1,000 miles and to Singapore the distances are exactly the same.
Container shipping is a very complex web these days and ships pick up cargo all over the place. Let’s face it—they are not going to get any cargo in northern Russia, so I think they are going to stick to their proven routes for some time to come.
Lord Brett
My Lords, when I left home this morning, I trudged through the snow to the car. My wife, who was kindly driving me to the station, asked what we were discussing this evening. I said the melting of the Arctic ice cap. She pointed out that the temperature was minus 11 degrees. I was going to offer some scepticism, but I decided that as I needed the lift I would not seek to educate her on the issue at that time. But she will be educated, I am sure, if I can persuade her to read Hansard and the excellent debate we have had. I am very grateful, as others are, to the noble Lord, Lord Jay, for setting it out so clearly. I would like to begin by looking at the point made by the noble Lord, Lord Alderdice, of security. There are a couple of very interesting RUSI documents: one by Clive Murgatroyd published last year called Defence and the Arctic—Go with the Floe?; and another by Paul Berkman. They raised the question whether there is any choice other than having a zone of peace or an enhanced military presence, with all the danger that that brings. I would be interested to hear what the Minister has to say about that.
A number of noble Lords have set out the opportunities provided by the melting of the Arctic ice cap and have rightly described some of the repercussions. Sometimes our media and our own enthusiasm will not give true weight to some of those issues. I have rarely seen the albedo effect, mentioned by the noble Lord, Lord Jenkin of Roding, argued other than in the most scientific and technical journals.
Access to oil and gas will be an issue, not only because of the unpredictable seas but because of the thawing permafrost. There is also the very real question of oil spills, which could be a major problem under ice, because it could spill for many hundreds of thousands of miles. That points, as all these questions do, to international co-operation, licensing and safety regimes. Then there are the fisheries. It is perhaps not so much a question of the ice cap melting that is the issue with fisheries, but as a result of that fish stocks will migrate to other areas. Sustainable fisheries management is the key. Again, that talks of the need for international co-operation, if we are not to see some of the problems that we have seen in the past decade or two repeat themselves.
We have the question of commercial shipping. Yes, there are insurance opportunities, but someone’s opportunity for enhanced insurance premiums is someone else’s penalty in having to pay them. More importantly, whatever shipping is used in those new routes, emergency cover is probably more difficult to provide than where we are at the moment. I join with others in asking what action the Government have in mind to meet these challenges in the IMO, with NATO, the EU and other international forums, by way of enhanced regulatory frameworks and increased collaboration. Specifically, what are the prospects of the United States signing up to the UN law of the sea convention? We have heard words from Washington to suggest that that is an intention, but is it a realistic intention, particularly in the light of shifts of power within Congress?
I finish with an important point from a domestic point of view—the impact of rising seas on the coastlines of Britain. We have seen various estimates of how the seas could rise as a result of melting ice caps, including one of 2 metres by the end of this century, which has been pooh-poohed or debunked, not least by the Met Office and others. But there will certainly be substantial increases. The last Administration made urgent legislation to protect homes and businesses, and the Environment Agency says that more than 5 million properties are at risk in England and Wales. We have yet to hear from the Government what flood defence schemes will be abandoned in the new austerity era and what will go ahead. Will the Minister share his thinking with us—and, if that is not possible in his oral response, can I have a response to that in writing?
The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)
My Lords, this has been a short but expert debate, with a lot of extremely well informed contributions to what is a fascinating and probably rather undiscussed phenomenon of our times. It is a very fast-developing situation, as the noble Lord, Lord Jenkin, pointed out, with rapidly melting ice packs and ice floes in the Arctic region. The House is grateful to the noble Lord, Lord Jay, for letting us focus briefly on this; it may be the sort of issue that we will come back to in much greater detail in future.
The phenomenon is all the more striking because of the possibilities that it raises. Greenland is becoming greener, or so we are told. Indeed, there is evidence of areas becoming habitable again in Greenland, which have not been available for five or six centuries. There is a certain irony in the whole situation that, as the ice melts, the hydrocarbons are becoming more accessible. While we want to combat global warming, which is widely believed to be closely associated with excess use of fossil fuels, we have a situation which is making access to fossil fuels all the easier, although perhaps easier is too strong a word. It is certainly less difficult and more possible than it has been in history.
There is the hydrocarbon situation and the fascinating prospect of opening the north-west passage, which my noble friend Lord Rotherwick referred to, and the possibility of solar routes. I want to come to both of those in a moment, but let me begin by answering the central question: what are our key aims in the Arctic and what are we in the UK doing to meet these challenges? Let me sum up the answers to those questions briefly before coming to more detail about hydrocarbons and many other aspects of the Arctic phenomenon.
Our aims are to promote peace and good governance in the region, increase UK influence by maintaining good bilateral and multilateral relationships with the Arctic states, and to support the work of the Arctic Council and other international and regional bodies. The noble Lord, Lord Jay, asked about our status in relation to the Arctic Council We are an observer and we have presented a very strong case for our continued observer status. Frankly, we would like to see this whole issue raised by the Arctic powers of who should be observers and how that should work in the future. We want that to be as settled as possible and believe that we can make a powerful contribution to the continued work of the Arctic Council.
Our second aim is to protect crucial UK energy supplies from the region and promote UK business interests. Thirdly, we want to ensure access to fisheries and transport routes in the region, including the ones that may open up in the future—not just in summer but in winter. Fourthly, we want to promote wider UK Government objectives with regard to sustainable development, environmental protection and climate change.
Let me move from the general to the particular. I have noted already the irony that the melting of the ice means that all sorts of possibilities open up for access to the huge hydrocarbon resources in the region. We need to remember that this is not virgin territory. We have the Stockman field, to which my noble friend referred, Snohvit, the Norwegian development, Prudhoe Bay and the vast Alaska resources operated by BP, so oil and gas—particularly gas—is being extracted from the area in substantial quantities already. They are small compared with what is estimated to lie in the region, and all kinds of vast figures are thrown around. The US authorities estimated some years ago that 30 per cent of the world’s gas reserves and 13 per cent of the world’s oil reserves lay under the Arctic ice, or in the Arctic region. One has to be careful with these figures because they are assessments of what has not been discovered, so they have a guessing element to them. But there is no doubt that colossal reserves are there and the question arises as to how they can be got out economically and in line with all the other restraints that the world wants, including respect for the environment.
There are then the shipping aspects, which are potentially very interesting, to which my noble friend Lord Rotherwick referred. In a way, although one may be eliding the timescales a little, many would say that today travelling through the Gulf of Aden has become considerably more hazardous with the unfortunate growing piracy elements. Insurance premiums have gone up enormously for taking the traditional routes between the West and the East, and the north-west passage is many thousands of kilometres—and miles—shorter. If the passage became available in the summer, and at least parts of the winter, the gain would be enormous and of great interest to the great shipping and transport companies of the world. Those are the possibilities. They are undoubtedly exciting and real because the melting is taking place. Scientists argue about the precise nature and speed of the causes and whether we are talking about a cyclical, historical or permanent trend. That is a debate that we do not want to enter into this evening. However, the melting is a fact.
Against that, it has to be accepted that extracting oil and gas in the area could lead to oil spills and environmental hazards. The conditions are very difficult and, even with the melting of the ice, we are dealing with appallingly cold conditions. Deep-sea drilling, as we know from the tragedies in the Gulf of Mexico, is full of hazards. The world is watching closely to see that these things are controlled very carefully. The noble Viscount, Lord Waverley, was concerned about the guidelines for the extraction of hydrocarbons. We fully support the Arctic Council guidelines. They must be adhered to rigidly.
Secondly, there is the question of straightforward economics. At what price a barrel of crude does it begin to look realistic to develop the technologies to extract from under the ice and to develop the kind of offshore sub-sea stations that can draw oil and gas horizontally on to land-based refining and receiving stations? The costs are very high. All sorts of estimates fly around. There is no doubt that if the price of crude was as low as it dipped two years ago—or as low as it dipped back in the 1980s—the attractions of any kind of extraction in this area would be very small. There are major environmental issues and major fisheries interests to be safeguarded. There are the interests of the indigenous peoples to be looked after.
Against that, the politics of the whole region has begun to be not as dismaying and deterring as perhaps it seemed in the past. The littoral five—Russia, Norway, Denmark, Canada and the USA—and the other three members of the Arctic Council—Iceland, Finland and Sweden—are now co-operating more closely than they have in the past. The long debate between Russia and Norway about demarcation lines looks like being settled. It is yet to be completely signed but the spirit is one of co-operation and is constructive. The noble Lord, Lord Teverson, brought us a hint of the good news from his interlocutor. The major political problems and quarrels that might have tarnished the whole scene as it unfolds look like they are being tempered by a degree of co-operation, which is very good news.
The noble Lord, Lord Alderdice, asked about security. There are concerns that various countries have sent patrol vessels to the area. Everyone became very excited when the Russian authorities decided to place a sub-sea titanium flag on the North Pole. Again, one hopes that the spirit of co-operation that is evident in the Arctic Council will prevail.
That is the scene. We are involved with it and watch it very closely. The possibilities are undeniable and there are also dangers. I hope that noble Lords will feel that Her Majesty’s Government are alert to this new development. We are not closing our eyes to something of great importance. We are not an Arctic power but we tend to be close to it. The possible implications for our coastline, if the climate developments continue in the way some fear, and certainly for our energy security, are real.
I hope that this debate has helped the noble Lord, Lord Brett, warm up a little from his cold start this morning. I have not answered in detail about the flooding matters., but I will write to him about them. They are part of a more general concern that we all have about flood protection. I thank the noble Lord, Lord Jay, very warmly for initiating such a fascinating, interesting and important debate.
Parliamentary Voting System and Constituencies Bill
(13 years, 5 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Rooker
Lord Rooker
My Lords, when I first tabled this little group of amendments, I included one that was along the lines of a side-title to it: “the people’s choice”. That is what this group is about. At the moment, nobody has asked the people. Nobody has asked anybody whether they want to change the voting system. This group of amendments splits the question into two parts. It is fairly self-explanatory, although it is not as easy to see when they are split up on the Marshalled List. The first question is in Amendment 21 and would ask people:
“Do you wish to change the voting system?”.
People are not being asked this. It was implied by Amendment 16. People were not asked whether they wanted change; it said that it had been agreed to change the voting system. I want to ask people whether they want to do so.
The second part, if there are yes and no answers to that first question, is in Amendment 27:
“If a majority vote for a change in the voting system, which of the alternatives”—
I call them families—
“would you prefer?”.
There are four there; it is a little package. I will not labour the point. I did not invent this. It is a replica, although not exactly, of what happened in New Zealand nearly 20 years ago. New Zealand had first past the post, a very modern democracy and votes for women 30 years before this country did, so we should not lecture anyone there about democracy and parliamentary systems. It had first past the post and there was pressure for change. I shall not deploy all the documentation and so on but a referendum was held in New Zealand in two parts. The people were asked, first, “Do you wish to change the system? Yes or no?”, and then below that on the paper was the second question, “If the yes vote wins, which one of the following do you want?”. The options given were in families—I use that term because of the debates that we have had—rather than in detail. Parliament took it away, worked on it to make it a practical reality and then a year later, in 1993, there was a second binding referendum between first past the post and the alternative, which won the vote and was turned into a practical system. It worked. I do not know how many times it has been used—probably at least four or five—but in New Zealand the people were asked before a change was made.
Lord Campbell-Savours
Perhaps I may ask my noble friend what the turnout was in the referendum. Is there anything that we can learn from that level of turnout?
Lord Rooker
I regret to say that I have not brought my New Zealand file with me. I could not get away from the Chamber and my file is across the road, so I do not know. It was a hot issue and I have copies of the information that at the time was distributed to people by the equivalent of the Electoral Commission to explain the systems and what was going on, together with copies of the ballot papers.
I am not going to spend this debate deploying the whys and wherefores of the system. The principle is clear: first, we should ask the people, “Do you want to change the system?”. I can make the case for that but the change, when it occurs, has to be cemented, and that is my anxiety about what is being proposed. This is not intended to be a cemented change, because it is clear that, assuming it is carried, the Liberal Democrats will come back later for a move to PR. Were I in favour of PR, I would go straight to PR, but that is not the point that I am making here.
Lord Sewel
I am grateful to my noble friend for giving way. As I understand his argument, he wants to have an initial decision on whether to change from first past the post. If there is a majority in favour of change, that becomes a trigger for a list of alternatives, which, according to the first decision, excludes the retention of first past the post. Would it not be possible to have, say, 45 per cent of the people voting for first past the post and then, when you come to the alternatives, to have any one of the alternatives securing less than 45 per cent of the support of the electorate? What would happen then?
Lord Rooker
Amendment 30 takes care of that. I know that I shall be criticised for Amendment 30 but, if you are going to have multi-choice answers, you have to be able to rank them so that there is a clear winner. What I have here are two questions that are intended to be on one ballot paper: “Do you want to change the system? Yes or no?”. If the yes vote wins, which will not be known until the papers are counted, then the second question comes in: “Which family would you choose?”. In New Zealand, there was a year’s gap between the two referendums. The first referendum was not binding but the second one was. It was do or die between one system or another. As the noble Lord, Lord Skidelsky, said, the second referendum required a yes or no answer and so was absolutely clear.
Lord Foulkes of Cumnock
Can my noble friend confirm that first past the post was not an option in the second referendum?
Lord Rooker
Yes it was. First past the post was mentioned in both referendums even though when people were asked in the first referendum, “Do you want to change from first past the post? Yes or no?”, the yes vote won. They then chose what I call, in shorthand, the additional member system as the preferred option from the family. A year later, there was a run-off between a detailed additional member system and the status quo, the first past the post. You could not complain if you were a first past the poster that you did not get a fair crack of the whip in New Zealand, because there were two opportunities. That is what cemented the change, because on two occasions first past the post lost. It lost on the indicative referendum to start with, when the choice came; and then it lost on the binding referendum. So, on the second referendum, first past the post was back. It was incredibly sophisticated, modern and democratic, and this was 1992-93. The system worked, and it is one on which I wanted to model this kind of operation.
They did it and it works, so there is somewhere in the world that we can point to—somewhere that is English-speaking, first past the post, democratic. We are scratching around because no one can find a place where the type of alternative vote proposed in the Bill actually works in reality. I was going to use Canada as an example, but it was not a national election when they used it there, when it all went dramatically wrong for lots of people. It was always in the provinces. If you google Canada and the alternative vote you will come up with a textbook of how to smash the alternative vote. It was not a national election, however, so I am not going to use it.
It was a two-stage question and a two-stage referendum, but my amendments do not cover the second stage. I just wanted to deploy the case and give at least a positive push—or a nudge, in the language—to the effect that it can work, because it did work and there is a classic example for it.
There are a couple of points I did not speak on in the last debate—I showed enormous restraint, as I said to the Leader of the House—because I have got nothing new to add to what I am not going to say now. One of the reasons that I never joined the Electoral Reform Society after I became a convert just over 20 years ago was this issue about STV. That is why I never joined. I have worked very happily with lots of people on joint platforms and would be happy to do so again, but I will never join because it has this thing whereby if you join, people will say, “Oh, he is in favour of STV”. It is the one system I do not like because it forces party people to fight against each other. I do not think that is a clever system. It was also dissected by the Plant commission, which I will come to in a moment, which was chaired by my noble friend Lord Plant back in the 1990s.
On AV, you have to ask yourself what you are trying to do. Are you trying to elect the most popular person for a constituency and then as a by-product get a popular Government, because it is slightly more proportionate? The question that should be asked on this referendum is: do you want a majoritarian system or a proportional system? That is the question to ask. First past the post and AV are both majoritarian systems; there is no argument about that. They are not remotely proportional, so they are in the majoritarian family. But if you want to elect the most popular person, AV will not do that.
The noble Lord, Lord Lamont, raised an issue which I have covered later in Amendment 52, so I will not go into it in detail now, about what you do with those preferences for the bottom candidates. It is unfair; there is no question about that. The sixth candidate gets chucked out. That second preference is worth exactly the same as the first vote for the first candidate or the second preference for the second candidate. It is very unfair that someone’s vote should have that value. Amendment 52 gets us round that. But there is not a system that will deliver the most popular candidate.
The noble Lord, Lord Strathclyde, gave us a seminar on the last election. I want to read a bit from page 66 of the Plant report, which was a long time ago, about how to get the most popular person elected. You certainly cannot do it by ranking and kicking people out; that does not work. For example, as I tried to explain in a previous debate, the supporters of the first three candidates in a list might all hate each other equally, but each of the supporters of the first three would vote for the fourth. That is what is known as the Condorcet winner—which is defined as the option that beats every other in an exhaustive series of pair-wise contests.
I raised this with some academics upstairs and they gave me a good example of someone who would have been a Condorcet winner, although it did not happen because of the system that was used. Noble Lords will remember the French election when Chirac ran up against Le Pen and Jospin came third. Jospin was the Condorcet winner because, in a run-off with Chirac, he would have beaten Chirac and in a run off with Le Pen, he would have beaten Le Pen, but because he was third he got knocked out. He would have been the Condorcet winner in that case, but he was not because of the way the system worked with the two-round ballot, so the most popular person did not win. That is a good example from recent history and we all know what happened in the French election.
The alternative vote system will not give you the most popular candidate. I did not want to interrupt the noble Lord, Lord Skidelsky, earlier—that would be far beyond my pay grade—but he repeated the canard about the winner securing 50 per cent plus of the votes. It is not true; it cannot happen under the system in this Bill. In order for it to happen every voter would have to use every single preference on the ballot paper and that will not happen because of what I said last week. I can guarantee that some Liberal Democrat candidates will go around the country saying to their supporters, “Don’t vote and use your second preference because they will work out what might happen if that second preference all goes wrong”. People will not be encouraged to use all their preferences.
There are some problems with the system. I digress because I wanted to point out that every system has its defects; nothing is perfect. You can make an electoral system do exactly what you want it to do. You can put constraints on turnout; you can put constraints on the additional Member system; and you could say to a party, “You cannot have a top-up candidate unless you have won at least one constituency”. I was accused of being antidemocratic when I said that. You do not need a percentage turnout. If you cannot win a constituency, you are not entitled to a top-up. They said, “All that is bad for the Greens”. I said, “Let them go and win a seat”, and they have done that now, so they would qualify. You can do all those things; it is all techie.
I refuse to let my eyes glaze over, but when I am faced with the situation presented in this Bill, it makes me so angry because, at the end of the day, I will have to vote for first past the post, which really sticks in my throat. I am being forced to vote for first past the post because of what is in the Bill: the preference system, the turnout and all the issues which we discussed last week on which we can go into detail when we come to other amendments. Those matters make the situation more perverse and worse than the present system. That is a change I am not prepared to vote for. I am not prepared to vote for something on the basis of, “Vote for this and if we get it right at the next election, we will come back and get a bit of PR, AV+”. Give me AV+ and I will vote for it.
The noble Lord, Lord McNally, would vote for AV+ but he cannot get the person sitting next to him in the Cabinet to support him. That is a bit like the Labour Cabinet. We were presented with exactly the same in the Bill that came to the House in March. People were not asked if they wanted to change. It was put together by a Cabinet, most of whose members did not want change at any price; they just stuffed AV in and thought they could get away with it because it is so close to first past the post. There were the same problems and I made the same speech when sitting on the Bench opposite.
I am annoyed because, at the end of the day, unless there is a major change to the Bill, I will have to vote for first past the post, which I do not think is very good. Also I think people will be misled during the referendum. Perhaps I can give an example: somewhere in the world it worked in a mature democracy and I think it could work here if we asked the people. I wish we were brave enough to do that.
I realise this was all cobbled together in a rush in the six days after the election. I understand that the pressures to get a deal were enormous. I will support the fixed-term Parliament, although I think four years is better than five but I will settle for five years. I accept that the only deal in town was the deal I am looking at now, but that means we should be mature enough to say, “Look, if there is something intrinsically wrong with the system, let us put the case to the people and ask them if they want a change”.
Think of the mandate you would have from that Front Bench, if you could persuade people that, yes, there is demand for a change. The first-past-the-posters would be run out of town and we could get to work on getting a change that people would accept and it might last for the 132 years that the noble Lord, Lord Rennard, keeps saying that first past the post has lasted for.
I freely admit that you can all go home because I do not intend to push any of this to a vote, but I wanted to put it on the record that there is an alternative way of doing this. I beg to move.
Lord Foulkes of Cumnock
I was waiting for the noble Lord, Lord Phillips, to come in.
Lord Foulkes of Cumnock
I was sitting here confidently waiting for either the noble Lord, Lord Phillips, or the redoubtable noble Lord, Lord Rennard, the bravest of the Liberal Democrats, to get up and intervene, but since no one has, I shall say just a few words.
We are now down to the anoraks, the loyalists and the payroll vote. I am two out of three, by the way. I always hesitate to disagree with my noble friend Lord Rooker, because, just as he said that the noble Lord, Lord Skidelsky, fills him with awe, my noble friend fills many of us here with awe. He was one of the most effective Labour Ministers and he is an even more effective Back-Bencher and debater, so it is always with some hesitation that we get up to disagree. But I come from a fundamentally different point of view, in that I think that first past the post is, as I argued earlier, the best system, for a range of reasons.
I wonder, though, whether he is right in using the New Zealand example as a precedent for us, for two and maybe three reasons. First, New Zealand has a unicameral Parliament, so there is only one Chamber and only one election takes place. They do not have, as we do, two Chambers and—as I said in relation to the previous amendment—the possibility of having two different systems, one of which produces the Government and the other which produces the balancing force, or balancing Chamber. That is very important.
Also, as far as I remember—and I am sure that my noble friend Lord Rooker will get up and correct me if I am wrong—the example that he suggested was introduced by the Labour Government in New Zealand. They thought that it was right to change the electoral system. I visited New Zealand a few years later and spoke to a number of Labour Party members who were very strongly of the view that they had made a mistake in introducing it. I know that my noble friend Lady McDonagh was General Secretary of the Labour Party and has contacts with the New Zealand Labour Party. I was there on a CPA visit and met them and they were very regretful that they had moved in that direction. Despite his deep knowledge and the detail that my noble friend gave us from the Plant report and the system in New Zealand, he was not able to answer my noble friend’s question about the turnout, about how many people actually turned out to make these great changes in the two referenda that took place, and whether or not that could be justified.
That brings me to two final points. Someone suggested earlier that there was filibustering going on. There was actually a very good debate, which seems to me to be the purpose of these kinds of Chambers. I was pleased that quite a few Conservatives got involved in the debate.
The Liberal Democrats and some Labour people keep arguing that democracy is all about an arithmetical correlation between the number of votes and the number of seats, as exact a correlation as possible. That is democracy, they say—to get the nearest you can to the number of seats relating to the percentage of votes cast. I think there is another, perhaps even more important, aspect of democracy, which is accountability: that is the ability, first, of your party in the constituency and, secondly, of the electorate in the constituency to hold you to account. In my view, that can be done properly only by the first past the post system.
Earlier, the noble Lord, Lord Phillips, made a very strong argument about wasted votes. One aspect of that was dealt with by one of my noble friends. The argument was that there are safe seats that never change. Come up to Scotland and go to Edinburgh South, which was held by the Tories for generations and is now a Labour seat, or go to East Renfrewshire, which was held by the Tories for generations and is now a Labour seat. We used to think our votes were wasted, but we worked hard, we convinced people, we got people on to our side, they voted for us and we got a majority. Surely that is what democracy is about. It is about convincing people and changing people’s minds. It is Gilbertian to think that because someone was born a Tory, they will always be a Tory or because they were born a Labour person, they will always be a Labour person. You can change people, you can convince people. If you will excuse me saying so, I was talking to my noble friend Lord Maclennan—I still call him my noble friend—earlier on. He won the seat through his campaigning, his personality and the Labour Party in Caithness. We had never held it before. We can win these seats and can convince people to change their minds. Surely that is what democracy is about.
Although my noble friend Lord Rooker has very powerfully argued the case for his amendments, I do not find it totally convincing. I say to the Tories that I wish that more of them in this place would have the courage of what I know to be their convictions and would stand up as the noble Lord, Lord Hamilton, did earlier today and say what they really believe: that first past the post is the best way of electing people to the House of Commons.
Lord Campbell-Savours
My Lords, I join my noble friend in calling upon the Conservative Benches to take a view because I do not know whether they really understand the danger that would arise in the event that an AV referendum was successful. It has huge implications for the Conservative Party. They sit there and say very little, apart from the noble Lord, Lord Hamilton, and it leaves me quite bewildered.
I can now answer the question that I asked my noble friend about what happened in New Zealand because it is in Review of Voting Systems: the experience of new voting systems in the United Kingdom since 1997. On page 136, it sets out precisely what happened and it is very interesting, so I shall put it on the record:
“New Zealand provides a particularly interesting example because it has changed its electoral system from FPTP to the MMP”—
mixed member proportional—
“system (similar to AMS in the UK) in recent times. The first election to be held under MMP was in 1996, following referendums”—
which my noble friend referred to—
“in 1992 and 1993 which first rejected FPTP and then selected MMP from four proportional options. The 1993 referendum, which was binding, took place at the same time as the 1993 election where 84.5 per cent of voters favoured replacing FPTP and 70.3 per cent chose MMP”.
That shows that, when you ask the electorate what have been deemed in these debates to be complicated questions over the detail of various proportional systems, they actually understand what they are being asked and they are prepared to go out and vote and state a preference. The evidence is there in English-speaking New Zealand. It did it, and it shows the way forward. It is interesting to note, in the following pages in this section, that the turnout in New Zealand elections following the change in the electoral system in 1990 has consistently remained around the 80 per cent mark. That is almost as high as in my former constituency in one election, but it is vastly higher than the average within the United Kingdom. Again, we may have something to learn from New Zealand.
It is also worth noting what the review says is the impact of the system that New Zealand chose in this well-supported referendum.
“Since 1996, New Zealand has been governed by coalitions, usually with a minority of the seats in Parliament. Obviously this makes it more difficult for the leading party to achieve all of its policy aims but, arguably, policy decisions reflect the views of a wider coalition of voters. Tina Day, a Director of the Joseph Rowntree Reform Trust interviewed 21 MPs in the 2002-05 Parliament for her research. She argues in her 2005 paper Increasing the representativeness of parliament … that there has been a shift of power from the Executive to Parliament, with select committees (whose composition reflects the multi-party Parliament) assuming a very powerful role”.
That reservation, expressed during the course of that consultation, might well be the one to which my noble friend refers.
The review continues:
“There is also a greater representation of women (around 30 per cent of members), Maori and the Asian population in Parliament. She argues that this has increased the legitimacy and standing of Parliament (notwithstanding the early unpopularity of coalition government). It also means that divisions in opinion within the country are played out in Parliament to a greater extent”.
The point I am making is that if you trust the people and give them the information in a form that they can understand, and put realistic options on the paper, they may well surprise us and actually choose a system that—
Lord Sewel
I am grateful to my noble friend, my near neighbour, for giving way. Could he resolve this dilemma? He mentioned that there was the early unpopularity of coalition Governments at the same time as there was popularity for a change to a more proportional system. A more proportional system will more than likely—I put it no stronger than that—lead to coalition Governments. How does he square the circle of the popularity of the voting system with the unpopularity of the product it produces?
Lord Campbell-Savours
It is because it was only in the early days prior to coalition that public prejudice on the issue of coalitions led to this general view that coalitions cannot work; whereas following the referendum decision and the creation of the coalition, and a recognition by the public that the system did work, the coalition then gained in popularity. All I am saying to my noble friends is that I find this particular amendment very appealing because it offers the public the opportunity that many of us believe they should be given during the referendum.
Lord Falconer of Thoroton
That raises a fundamental point which my noble friend Lord Rooker puts very well; you have to be able to explain why AV has been chosen and the public are not being given a choice on anything else. I have to say again, rather distressingly, that the noble Lord, Lord Strathclyde, did not deal with that at all in relation to the last amendment. He said that clarity was important. That is an answer, but it does not deal with why AV has been chosen. There is a profound sense in this House that there are a range of options. My noble friend Lord Rooker and the noble Lord, Lord Lamont, have pretty well destroyed the idea that AV is an effective choice.
If at all possible, I should like the coalition to explain why it has chosen AV as the only alternative proposition that it is putting to the electorate. If the answer is—I think that the Deputy Chief Whip is trying to tell me this—“Well, that is all we could agree with the Liberal Democrats”, that is fine, and I hope the electorate will treat that with the contempt that it deserves. Then the position is that we are not suggesting that it is the best alternative; we are saying that it is the only one on which we could reach agreement. I very much hope that the coalition is straightforward about that, because this is a serious debate about the constitution. Unless no answer is forthcoming, there is no other option but for this House to debate which are the better options. I know that that wearies the noble Lords, Lord Strathclyde and Lord McNally, but if you cannot explain or debate the best alternative to first past the post, the position is that the merits of each of them have to be debated.
Lord Tyler
Perhaps it would help the House if the noble and learned Lord was able to explain why this was the only alternative to the first past the post system that his Government twice put before Parliament and the nation. The first time was in the Constitutional Reform and Governance Bill, when this was very specifically the only alternative that was going to be put before Parliament and the people, as he well knows. The next was at the general election. It would help the House to have his explanation.
Lord Falconer of Thoroton
That was the step that the then Government proposed in the Constitutional Reform and Governance Bill. That step was then proposed in the referendum, but it was rejected by the public because we lost the election. This is the team who won the election. Unless you are saying to us, “We adopt the position that the Labour Party adopted”, I am unable to understand why it is. I hear the noble Lord, Lord Fowler, saying “Come on” from a sedentary position. If the reason is that the Conservatives and the Liberal Democrats have adopted the miserable little compromise that they proposed because we adopted it, let them say so. The deafening silence, the lack of argument and the black hole at the centre of the argument—
Lord Tyler
This is absurd. Presumably, the noble and learned Lord and his very distinguished colleagues in the previous Administration had a thought process that brought them to the conclusion that it was the right choice to put before Parliament and subsequently at the general election to put before the public. They were not just jumping ahead and wondering what a putative coalition might attempt in the future. At the time, he was a distinguished member of that Government. Surely he had an input into that thought process. Can he not share that thinking with us?
Lord Falconer of Thoroton
I am afraid that I was not a distinguished member of the Government at the time, but let me speculate as to what might have been in the mind of the Government.
Lord Lamont of Lerwick
Before the noble and learned Lord, Lord Falconer, delves into the bowels of history, is it not the case that today the leader of the Labour Party has said that he intends to vote for AV in a referendum?
Lord Falconer of Thoroton
He has and that is fine. He is not saying necessarily that that is what everyone else has got to do, but the noble Lord, Lord Lamont, is absolutely right in relation to that. What is the thinking of the noble Lord, Lord Tyler? I do not know, but perhaps it was that this would be enough to get the Liberal Democrats on side. Sure enough, it has proved to be the case as far as the Conservatives are concerned. But, ultimately, the problem which the Liberal Democrats say this is to try to resolve is a lack of trust on the part of the electorate in politicians.
Lord Rennard
One should consistently want to trust the electorate and give them that decision. I do not think the noble and learned Lord answered very well the points made by my noble friend Lord Tyler. We have heard some persuasive arguments this evening from noble Lords opposite in favour of a multi-option referendum on electoral reform. I just wish we had heard them over the past 13 years when noble Lords were in a position to do something about it. The logical position on these Benches is simply that we would rather trust the people with having some say on the issue than give them no say.
Lord Falconer of Thoroton
I am rather confused by this. This is another volte-face. My understanding is that the Liberal Democrats in the negotiations pressed for AV without a referendum, so I am not quite clear why the noble Lord, Lord Rennard, is saying, “Trust the electorate”. I imagine the Liberal Democrats were pressing the Conservatives to agree to no referendum on the basis that they could not trust the electorate to go with what they thought was the right answer.
Lord Rennard
Perhaps while the noble Lord, Lord Adonis, is present, he might confirm that the Labour Party pressed on us the idea that it might well legislate for AV without a referendum because it is such a good system.
Lord Adonis
That is absolutely not the case. There was no proposition from the Labour Party. It was always made clear that any change to the electoral system would require a referendum for the obvious reason that this is a fundamental change to the constitution of the country.
Lord Falconer of Thoroton
I am grateful to my noble friend Lord Adonis. The noble Lord, Lord Rennard, was not in a position to deny the assertion that they were seeking AV without a referendum. So the Liberal Democrats trust the electorate but only on the basis that they give them the answer that they want.
Lord Campbell-Savours
Is there not a distinction between how this House would have handled the matter then as against now? Earlier in the year if every Member of the House had been voting for what they wanted, that would not have gone through. It is a distinct possibility that the Labour Government would have been defeated on the issue of AV in this House. Now it is going through on the basis of people being prepared to vote for something they do not believe in. Which is the most honourable and honest House in those conditions?
Lord Falconer of Thoroton
The head-turning going on is easily identified. The public, however, are interested in the merits of the argument. What I cannot understand at the moment, because no argument has been advanced, is why AV is the only alternative that has been given. That is the question posed by the amendments of the noble Lords, Lord Skidelsky and Lord Rooker. There must be an argument beyond simply saying, “We reached an agreement over the weekend and that seemed a sensible thing to do”.
Lord Strathclyde
My Lords, the amendment moved by the noble Lord, Lord Rooker, would have the referendum pose not one but two questions and present the option of four different voting systems to the public—alternative vote, additional member system, single transferable vote and supplementary vote—rather than the simple choice between the current system and the alternative vote. We believe that on an issue as fundamental as voting reform, the public need to be given a clear choice which will produce an equally clear result, and there are a number of ways in which these amendments would stand in the way of that.
The noble and learned Lord asked why we are not giving another choice. That is the answer: to give clarity. He then asked why we chose AV. We might have assumed, given that the Labour Party had it in its manifesto, that it would support it. That is the first reason. How about this for a second reason? AV is the only system that allows a single constituency member to continue, which was an issue. AV+ includes additional members who do not represent constituencies. So AV maintains that link. And thirdly—
Lord Strathclyde
Let me explain the third reason. Noble Lords asked for a reason. I am not giving way to the noble and learned Lord until I have given all three reasons. Thirdly, out of all the systems that they voted on in the House of Commons, AV was the one they united on.
Lord Falconer of Thoroton
The noble Lord was saying that AV+ did not have a single member constituency. Have I misunderstood him?
Lord Strathclyde
In what respect? I said that AV was the one that only had single member constituencies. AV+ has single member constituencies and top-up members on lists. I suspect that the noble and learned Lord knew that.
Lord Touhig
If I understood the noble Lord correctly, he said that AV was put forward because there might have been a presumption that the Labour Party, which had supported it in the past, would support it now. But his Prime Minister does not support it.
Lord Strathclyde
The question was this. Why did we propose a referendum on AV? It was not whether we supported AV or not, but whether we supported a referendum or not. The difference is that on this side of the House we can agree to disagree on whether we are in favour of AV, but what unites us is that we believe it should be the people's choice. The Labour Party denies that.
There are a number of ways in which the amendments proposed would get in the way of that clarity. Splitting the question in this way would risk making it unclear to people what they are really being asked to vote on. If someone was to vote no to the first question for example, why would they wish to answer the second question? Would their votes to the second question still count if they had said no to the first? As the noble Lord, Lord Sewel, pointed out, there is another disadvantage. The amendment allows for the possibility that people might vote yes to the first question but then not want any of the options presented in the second question, which would lead to uncertainty in interpreting the results as to what the voters really wanted.
Another drafting issue with the amendment is that it does not make it clear that it is a voting system for the UK parliamentary elections to the House of Commons. There is also no indication in these amendments about how any of the other voting systems would work. As I said earlier on, one attraction of the approach taken in our Bill is that, for all the arguments that might take place about how AV works, our Bill sets that out in Clause 9 and Schedule 10. Any questions about how AV works can be resolved by looking at the Bill.
In its report on the referendum question, the Electoral Commission noted that there was a great deal of uncertainty among the public about what the different voting systems were. The Electoral Commission will publish information on the different systems to address that. It is realistic to think that the commission will be able to address this sort of issue where there are two voting systems at stake. But in the context of the commission’s observations, it is not realistic to think the same where five proposed systems are referred to in the question.
A referendum on AV replacing the existing system will give a clear choice to the electorate with the ability for people to express a clear view. Offering more than one choice could lead to an indecisive result and confusion over the interpretation of the results. I hope that the noble Lord will withdraw his amendment.
Lord Rooker
I am grateful to the Leader of the House for that reply. I freely admit that this amendment comes from the anorak side of me. This was the most difficult part when I went through the Bill. Contrary to what the noble Lord, Lord McNally, said, when I read the Bill looking for what I wanted to do, this was the one clause I had most difficulty with. I wanted to raise the issue, but I could not do that in a way that was clear and precise in terms of deploying the argument for a second referendum and how the people had a choice. I could not do that. For 11 years, all my amendments have been drafted for me and I admit to being slightly rusty, but I am learning fast. I then left it alone. All the rest of the stuff in my name is like the other two amendments—very precise and clear so that everybody knows exactly what the issue is. I hope that they were clear tonight. With that, I beg leave to withdraw the amendment.
Baroness McDonagh
“Which electoral system would you prefer to use for electing your MP to the House of Commons? Either—
(a) the first past the post system; or(b) the alternative vote system?”
Baroness McDonagh
My Lords, my amendment would change the wording in the Bill, which asks:
“At present, the UK uses the ‘first past the post’ system to elect MPs to the House of Commons. Should the ‘alternative vote’ system be used instead?”,
to:
“Which electoral system would you prefer to use for electing your MP to the House of Commons? Either—
(a) the first past the post system; or (b) the alternative vote system?”.
The reason for this, as any psychologist will tell you, is that yes/no is not neutral. Yes/no has values: yes being good, no being bad. It can also cause confusion depending on whether you ask the question in a positive or a negative way.
A second unintended consequence of the wording is that it gets the voter to fixate on one system which, in the way the sentence is constructed, forces them to focus on the alternative vote system. I believe we are not asking them to choose for or against the alternative vote. In the Bill and in the referendum, we are asking them to weigh up the strengths and weaknesses of the first past the post system as against the alternative vote system and then make a choice. For these reasons I think it is much more straightforward if we pose the question in the way it is in the amendment and get people to actually choose the system they would prefer. I beg to move.
The Deputy Chairman of Committees (Lord Faulkner of Worcester)
I remind the Committee that if this amendment is agreed to I cannot call Amendments 21 to 27 for reasons of pre-emption.
Lord Strathclyde
My Lords, I thank the noble Baroness for moving the amendment. I understand exactly the point she is trying to make—aiming to ensure that the best possible referendum question is posed to the public. I hope to reassure her that an options form of the question was considered and tested by the Electoral Commission when it carried out its assessment of the original question on the Bill. The commission’s report concluded that there are potential drawbacks to using the options style in this particular case. It went on to discuss it and concluded that, in the circumstances, it could not recommend the use of an options question in place of the more traditional yes/no question that meets our criteria for assessing a referendum question.
The commission’s report also noted that an options form of the question could quite significantly affect the nature of referendum campaigning as campaigns will not be straightforward yes and no campaigns but in favour of either option. The question in the Bill as it stands therefore reflects the recommendations of the Electoral Commission which tested the question through focus groups and interviews with members of the public, as well as input from language experts.
Lord Foulkes of Cumnock
Did the Electoral Commission test the question with the first past the post system first and the alternative vote system second or the other way round?
Lord Strathclyde
My Lords, it simply tested the options system as opposed to a yes/no. It concluded that yes/no was a better way than the options. It produced evidence to support that view. Therefore, to change the question in the way the noble Baroness has suggested risks going against the advice of the commission.
Lord Strathclyde
The evidence it had was that first it was alien to referendums that we have had in this country and therefore would need new, comprehensive testing. Additionally, proper assessment of such a question would need to take account of further feedback from interested parties, including political parties and other groups and for those reasons, it took the view that the options style was not as good as the yes/no style.
Baroness McDonagh
Thank you. I think the noble Lord was giving way to me earlier. Can I ask you to go back a little bit to the issue of the campaigns that you touched on? It would seem to me that the way I am proposing it would be much better for campaigns—all the subjects would get aired rather than what is going to happen. You mentioned in your remarks that it will be the case for and against AV that will be concentrated on, not the strengths of the individual systems. Can you go back to this point and expand on it?
Lord Strathclyde
I am sure that the noble Baroness believes that the option system is better, but the commission’s report noted that an options form of the question could quite significantly affect the nature of the referendum campaign, as campaigns will not be straightforward yes and no campaigns but in favour of either option. The commission believes that for the sake of clarity it is better to campaign on a yes or no basis.
Lord Sewel
It is not a matter of asking yes or no; it is a matter of asking what the substance is behind yes or no, which is either first past the post or the alternative vote system. That is the difficulty. If you are presenting content in the question that is being put, options are clearly the way of presenting that to the public. In other referendums, the question has been put more simply as do you want something or do you not want something. It is not a matter of wanting one or the other. That is what we are presenting to the people at this time.
Lord Foulkes of Cumnock
I find the argument given by my noble friend Lady McDonagh much more convincing. With respect, she has been involved in a number of elections and referendums, as have a lot of us in this House. With no disrespect to the Electoral Commission, until recently it did not have anyone on it who had either been elected to anything or been involved actively in elections or referendums. It is only very recently, with a change in the law, that we have had people on the Electoral Commission who know what they are talking about in relation to elections and referendums. Surely the argument given by my noble friend is right. Yes is a positive argument and no is a negative argument. Therefore, yes is seen to be something far more attractive than no. If you are putting the option, you have to explain the option; you do not just go around sloganising. You have to explain in more detail what first past the post or the alternative vote is about. That is a much more sensible suggestion to put forward. I urge the Leader of the House to think carefully about that and not just to accept something because the Electoral Commission has said it. There is a tendency in both Houses for some people just accepting things because the commission says it. Now we have changed the commission’s composition and added to it some people who know what they are talking about with regard to elections and referendums. Its suggestions in future will be better informed. But will the Leader of the House listen to my noble friend on this?
Lord Strathclyde
My Lords, we have decided to support the findings of the Electoral Commission.
Lord Falconer of Thoroton
I just want some clarity. The way in which the noble Lord put it when asked the question appeared to state an analytical conclusion by the Electoral Commission—that it thinks that the options route is alien to how it has been done in the past and would lead to a different sort of campaign. That all sounds like analysis. Did I understand the noble Lord to say that there had been focus groups and testing by the Electoral Commission? If there were such focus groups and testing, are the results of that published? If so, where can we find it—and if it is not, could he publish it?
Lord Strathclyde
My Lords, if it is available to be published, I shall certainly see to it that it is done.
Lord Falconer of Thoroton
Is the noble Lord saying that it is focus groups and testing?
Lord Strathclyde
Yes, my Lords, I said in my original answer that the question posed was tested with focus groups and interviews with members of the public as well as input from language experts.
Lord Falconer of Thoroton
The noble Lord says, “If it is available”, but there must be a record of it.
Lord Strathclyde
My Lords, obviously I cannot commit myself to publishing something if it is unavailable. I said that if it was available, I would make sure that it was published.
Baroness McDonagh
I thank the noble Lord. I intend to withdraw my amendment at this stage. I agree that the referendum should be held, and I think that it is right to have this debate, but I shall think about his comments. If we are not careful, we will have a very one-sided debate in the referendum. I beg leave to withdraw the amendment.
Lord Bassam of Brighton
We have had no agreement to go beyond 10 o’clock this evening. It is now 10 o’clock, and it is the tradition of this House that we cease proceedings at 10 pm unless there is an agreement. I am more than happy to discuss these matters through the usual channels. I see two previous Chief Whips and am sure they would observe that that is the case.
Lord Strathclyde
I agree, but if the noble Lord, Lord Campbell-Savours, wishes to continue, I shall be happy to carry on. It will not take long.
Lord Campbell-Savours
To put it bluntly, I would prefer to go to bed. I do not know whether that suits noble Lords.
Lord Strathclyde
If noble Lords opposite have had enough, I am happy with that and we can resume the House. But if the noble Lord wants to move his amendment, we would be happy to carry on.
Lord Campbell-Savours
I am prepared to be helpful. If the House wishes to adjourn now we could regroup the next two amendments, which would help the House as two debates could be combined. I am perfectly happy with that.