House of Commons

Wednesday 15th June 2011 Commons Chamber

Wednesday 15 June 2011

The House met at half-past Eleven o’clock

Prayers

Wednesday 15th June 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 15th June 2011 Commons Chamber

The Minister for the Cabinet Office was asked—

[Duncan Hames (Chippenham) (LD)]

1. What plans his Department has to help match young people with volunteering opportunities.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

We are investing in the national citizen service, which will be very powerful in connecting young people with their own power to make a contribution to the community. In addition, we will invest £40 million over the next two years to support volunteering infrastructure and social action.

[Duncan Hames]

I thank the Minister. Grow, the organisation behind Wiltshire’s volunteer centre in Chippenham, is keen to extend the range of support it provides in matching young people with volunteering opportunities as part of Wiltshire council’s volunteer strategy and action plan. Will the new local infrastructure fund be able to support such initiatives, be they in Wiltshire or elsewhere?

[Mr Hurd]

I was in Devizes constituency in Wiltshire on Friday, and I recognise that Wiltshire council represents best practice in many ways in supporting local voluntary organisations and local infrastructure. I am delighted about the local infrastructure fund, because it will help existing infrastructure assets become even more efficient and effective in supporting front-line voluntary organisations and encouraging local people to get involved.

[Mrs Jenny Chapman (Darlington) (Lab)]

We all support efforts to encourage volunteering, but does the Minister share our concern that under proposals in the Protection of Freedoms Bill on the vetting and barring scheme individuals who are barred from working with children will be able to volunteer in schools, and without the school’s knowledge?

[Mr Hurd]

The Bill contains very important reforms to vetting and barring, and critically to the Criminal Records Bureau process, which many Members will know from their constituencies is a source of considerable frustration for people who are trying to volunteer. I agree with the reforms that will make that process simpler, more effective and more portable.

[Karl MᶜCartney (Lincoln) (Con)]

2. What steps he is taking to prepare for potential industrial action in the public sector.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

We are committed to maximum engagement with the public sector unions to seek agreement on essential reforms, and especially to make public sector pensions sustainable and among the very best available, as Lord Hutton, Labour’s Work and Pensions Secretary has recommended. I am sorry that a handful of unions are hellbent on pursuing disruptive industrial action while discussions are continuing. However, we have rigorous contingency plans in place to minimise disruption in the event of industrial action.

[Karl MᶜCartney]

I thank my right hon. Friend. Does he have a message for public sector workers who are contemplating strike action on 30 June?

[Mr Maude]

Yes, I do. I strongly recommend that they should not go in for industrial action. If schools close as a result of teachers going on strike, there will be considerable disruption not only to children’s education but to the lives of parents whose livelihoods depend on schools being open. While discussions are still going on about how to keep public sector pensions among the very best that there are, and at a time when taxpayers in the private sector have seen hits to their own pension schemes, I think people will be really fed up if industrial action goes ahead.

[Mr David Winnick (Walsall North) (Lab)]

Why should the Government be surprised that public sector workers, many of whom are pretty poorly paid, faced with an onslaught on their pensions and frozen pay have decided to fight back? It would be surprising if they had not.

[Mr Maude]

If the coalition Government had not inherited the biggest budget deficit in the developed world, we might not have to be taking these steps. I remind the hon. Gentleman that a civil servant on median pay—about £23,000—who retires after a 40-year career, which is not untypical, will have a pension that would cost £500,000 to buy in the private sector. No one in the private sector now has access to such pensions.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

May I commend my right hon. Friend for his determination to engage to the maximum with the public sector unions to try to avoid industrial action? He has made it clear, however, that he does not rule out legislative changes. May I plead with him, on behalf of the Public Administration Committee, that we make changes in an orderly fashion, and that perhaps he should publish a Green Paper to consult on what changes should be made, so that we can have a proper debate about them rather than find ourselves propelled into legislative changes in an emergency?

[Mr Maude]

I do not have responsibility for industrial relations law; that rests with my right hon. Friend the Secretary of State for Business, Innovation and Skills. We have made it clear that we do not rule out changes, and a number of proposals have been made from outside. We think that industrial relations law works reasonably well at the moment, but we keep it under review.

[Jim McGovern (Dundee West) (Lab)]

Does the Minister agree that pensions should be regarded as deferred wages, and that therefore, as my hon. Friend the Member for Walsall North (Mr Winnick) said, it should come as no surprise that pension scheme members are seeking to protect their future income?

[Mr Maude]

That is why we are engaging in discussions with the TUC at its behest. The discussions continue, and there is much still to be sorted out. I remind the hon. Gentleman that Lord Hutton, Labour’s Work and Pensions Secretary, recommended the reforms to make public sector pension schemes sustainable and affordable for the future. That is what we are determined to achieve. Any union or public servant contemplating strike action is jumping the gun. There is a long way to go yet.

[Andrew Bridgen (North West Leicestershire) (Con)]

3. What steps he is taking to encourage increased levels of giving.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

The Government are anxious to encourage more giving. On 23 May, we published a White Paper that set out a range of ways in which we can help to make giving easier and more compelling, and offered better support for charities, community groups and social enterprises.

[Andrew Bridgen]

Although people in the UK are very generous compared with Europeans, the rate of UK charitable giving remains only half that of the rate in America. What further steps will the Minister take to encourage us to give up to the level of our American cousins?

[Mr Hurd]

My hon. Friend is right—we are a generous country—but giving has flatlined, despite substantial interventions from previous Governments. We do not accept that as being inevitable, and we want to help people to give more. He will know that the Chancellor announced generous incentives in the last Budget. The White Paper contains many ideas, including a social action fund to support creative, new models that incentivise people to give.

[Mr Nigel Dodds (Belfast North) (DUP)]

More people would be encouraged to give, especially to health care charities, if the issue of irrecoverable VAT on all non-business supplies was sorted out. Discussions are being held with the Treasury, but will the Minister ensure that they are expedited so that a mutually acceptable solution is reached as quickly as possible?

[Mr Hurd]

The issue of irrecoverable VAT continues to rumble on. It is a Treasury matter, but I assure the right hon. Gentleman that as Minister with responsibility for civil society I continue to have regular discussions with the relevant Treasury Minister.

[Stuart Andrew (Pudsey) (Con)]

I spent 16 years in the fundraising sector. Does the Minister agree that one giving barrier for many people is the abolition of cheques?

[Mr Hurd]

I know that causes a lot of debate and anxiety in the sector. As my hon. Friend well knows, the matter is under review by the Government. It has been stated that cheques need to be replaced by some form of paper-based system.

[Roberta Blackman-Woods (City of Durham) (Lab)]

The House will note that the giving White Paper states that the Government aim to support and manage opportunities for giving, but what will the Minister do to monitor what sums are given and to which organisations? Does he intend to plug funding gaps, should they arise, so that poor areas of the country are not disadvantaged? Indeed, if donations continue to fall, is it a sensible strategy to rely on philanthropy to fill gaps in public funding?

[Mr Hurd]

The Government see a substantial opportunity to encourage more giving, bearing in mind that 8% of the country do 47% of the giving. The hon. Lady asks about money for more deprived areas. Our “community first and community organiser” programme, which is worth about £80 million, is exclusively targeted on the most deprived communities. The programme incentivises the local giving of time and money to support social action projects led by those communities.

[Mr Philip Hollobone (Kettering) (Con)]

4. What steps he is taking to enable young people in (a) England and (b) Northamptonshire to participate in the national citizen service in the summer of 2011.

[James Morris (Halesowen and Rowley Regis) (Con)]

6. What steps he is taking to enable young people to participate in the national citizen service in the summer of 2011.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

As my hon. Friend the Member for Kettering (Mr Hollobone) knows, we are offering more than 10,000 places to 16-year-olds this summer, including 135 in Northamptonshire. Our 12 providers are working hard to ensure full participation. I hope that he will lend his personal support to Catch22 and the Prince’s Trust in his area.

[Mr Hollobone]

What steps are being taken to encourage full participation in the scheme, and how can parents get involved to encourage youngsters to take up this challenge?

[Mr Hurd]

Our providers are working very hard to ensure full participation in the pilots by engaging schools, working with local media, and using social networking sites, including a dedicated Facebook page. The Minister for the Cabinet Office and Paymaster General and I will write to every colleague in the House with details of how they can engage with their local provider, because we would like them fully to support this exciting and positive opportunity for young people in their constituencies.

[James Morris]

There are a number of national citizens service pilots in and around my constituency. Does the Minister agree that we need to find ways of increasing and deepening access to this scheme in the most deprived areas by using innovative ways of communicating with youth clubs and other local institutions?

[Mr Hurd]

My hon. Friend raises an important point. One of the key benchmarks for success of the scheme is creating the right social mix on residential courses. The aim is to create opportunities for young people to meet people they would never otherwise expect to meet. That is very much part of the obligation on our providers and we are monitoring it very closely.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I welcome this initiative, but does the Minister agree that the Government need to do much more to prevent a repeat of the ‘80s, when so many young people ended up on the scrapheap?

[Mr Hurd]

I thank the hon. Gentleman for his constructive engagement with the national citizen service concept. I obviously reject his thesis and would point him to the investment in apprenticeships and everything else that we are doing. I urge him not to underestimate the potential of this programme to transform young people’s sense of what they can achieve.

[Bill Esterson (Sefton Central) (Lab)]

May I ask the Minister again about the barriers to young people from deprived areas getting involved in this scheme, especially in the pilot projects, for which, in half of the cases, young people are being charged up to £99? Does he agree that such charges will be a severe disincentive to young people from those areas, and will he take action?

[Mr Hurd]

We have made it clear—I have done so personally—to every provider that money should not be a barrier to participation in the pilots. We are experimenting with a range of models to gauge people’s willingness to pay for the value that the models add, but we have made it very clear to providers that money should not be a barrier to participation.

[Dan Jarvis (Barnsley Central) (Lab)]

5. What progress his Department’s counter fraud taskforce has made in tackling benefit fraud.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

The National Fraud Authority estimates that £21 billion is lost to fraud in the public sector each year. In recent months, the counter fraud taskforce, which I chair, has overseen a series of small-scale pilots that have made immediate savings of £12 million in benefit and tax credit fraud, and which—when rolled out—will save £1.5 billion a year.

[Dan Jarvis]

I thank the Minister for his response, which, when compared with the Labour Government’s targets for benefit fraud reduction, signals an unambitious approach to tackling this serious problem. Why is that?

[Mr Maude]

It is one thing to have a target but another to reach it. The £21 billion of public sector fraud that the National Fraud Authority identified arose after his party’s Government had set their ambitious targets. We are getting on and doing things—identifying fraud and error and stopping hard-earned taxpayers’ money going out of the door, to ensure that instead it goes to the vulnerable people and important public services where it is needed.

[Mr James Gray (North Wiltshire) (Con)]

One and a half billion pounds sounds not like a modest saving, in the words of the hon. Member for Barnsley Central (Dan Jarvis), but like a worthwhile saving, given that every penny comes out of people’s pockets. How soon will the Minister be able to take forward savings towards achieving the £21 billion total? We need to stamp this out of the public sector: what can we do about it?

[Mr Maude]

I should make it clear that this is only the beginning. The issue is not only benefit or tax fraud but procurement fraud. My right hon. Friend the Secretary of State for Transport is undertaking a pilot on supplier fraud in his Department, and it is already yielding significant returns. If the previous Government had been as concerned with eradicating fraud as we are, the public finances would not perhaps be in the mess they are in.

[John Glen (Salisbury) (Con)]

7. What progress he has made on establishing a big society bank.

[Anne Marie Morris (Newton Abbot) (Con)]

11. What progress he has made on establishing a big society bank.

[The Minister of State, Cabinet Office (Mr Oliver Letwin)]

I am delighted to say that we are making extremely good progress in establishing the big society bank. Sir Ronald Cohen and Nick O’Donohoe, with whom I met recently, have put an outline of the proposals on the website. They are now working with the actuary and the administrators of the dormant accounts. So as not to waste time while we wait for state aid clearance, we have also established a high calibre interim investment committee in the Big Lottery Fund to begin work immediately.

[John Glen]

I thank the Minister for that response. What safeguards will be in place so that when small charities seek to access funds from intermediaries they will be making worthwhile investments and not causing themselves to fall into significant debt?

[Mr Letwin]

My hon. Friend makes an extremely good point. It is tremendously important that the voluntary and charitable sector does not get into a debt spiral, and for that reason the big society bank’s plans involve trying to promote patient capital and risk capital that will allow the voluntary and community sector to expand without becoming over-geared and being put in financial peril.

[Anne Marie Morris]

Does the Minister agree that the big society bank will provide the vital backing required by investors in our social sector organisations, so that they can continue to support local groups dedicated to making communities better places to work and live?

[Mr Letwin]

Yes, I absolutely agree with my hon. Friend. It is extremely important to point out that the purpose of the big society bank, under Sir Ronald Cohen’s direction, is to go beyond the traditional sources of finance and persuade, for example, large charities that have considerable investments to start to reinvest in the voluntary and community sector so that they can get good returns on, for example, social impact bonds.

[Mr Wayne David (Caerphilly) (Lab)]

How long will it take for funds from the big society bank to reach the front line?

[Mr Letwin]

That very much depends, of course, on the state aid process, which, as the hon. Gentleman will know from his own experience, we cannot totally determine. In order not to waste time, however, the investment committee that has been set up within the Big Lottery Fund will begin to disburse funds from dormant accounts as soon as they are made available and released. I hope that that will happen within a few months.

[Lindsay Roy (Glenrothes) (Lab)]

At a recent meeting of the Public Administration Committee, Sir Ronald Cohen said that the big society bank might have to change its name because it is not a bank. Will the Minister enlighten us? If it is not a bank, what is it?

[Mr Letwin]

The hon. Gentleman’s question reminds me of Maynard Keynes’s dictum when asked about the IMF and the World Bank. I think he said that the World Bank was a kind of fund, and the IMF was a kind of bank. There are often these oddities in the naming of things. Shall we just call it the BSB and know what it does, rather than worry about the name?

[Mr Speaker]

We are now better informed.

[Charlie Elphicke (Dover) (Con)]

8. What recent representations he has received on the provisions of the Public Bodies Bill.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

As my hon. Friend knows, the Bill has completed a tortuous but constructive passage through the other place, and we hope for a Second Reading in this place soon. In the meantime, the Cabinet Office and other relevant Departments are holding information sessions for colleagues who want to discuss this important Bill.

[Charlie Elphicke]

I thank the Minister for his reply, his hard work and the excellent job he is doing on the Bill. Under the Bill, public statutory corporations such as British Waterways will be reformed and become mutuals. Have Ministers considered other similar public bodies, such as trust ports, for inclusion in the Bill?

[Mr Hurd]

I understand that my hon. Friend is frustrated by the pace of progress in his committed and spirited attempt to allow the people of Dover to take over the port. He will know that the Transport Secretary, who is sitting alongside me, has announced a consultation on the criteria for assessing the sale of trust ports in England and Wales, largely to reflect the Government’s localism and big society agendas. It is right for that consultation to conclude before further decisions are taken.

[Tessa Jowell (Dulwich and West Norwood) (Lab)]

In March, the Minister for the Cabinet Office claimed that he would make £30 billion of savings from his quango reform programme embodied in the Public Bodies Bill, so that he could

“protect jobs and front-line services.”

My freedom of information requests show, however, that nearly £25 billion of this £30 billion comes from front-line cuts to housing and our universities, including teaching and research. Will he apologise for these misleading statements about protecting front-line services?

[Mr Hurd]

No—and I am surprised by the line of questioning, because this programme of very overdue reform to the complex landscape of quangos and non-departmental public bodies goes exactly with the grain of the reforms proposed by the previous Government. We are going further in trying to deliver much greater accountability in government, and, on the way, delivering what we believe will be about £2.6 billion in communicative and administrative savings over the spending review period.

[Mr David Evennett (Bexleyheath and Crayford) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

As the Minister for the Cabinet Office, I am responsible for the public sector efficiency and reform group, civil service issues, industrial relations, strategy in the public sector, Government transparency, civil contingencies, civil society and cyber-security.

[Mr Evennett]

I welcome my right hon. Friend’s progress on public sector reform. Does he know why public sector unions have decided to ballot their members on strike action now, when talks on pension reform are still ongoing?

[Mr Maude]

Only three of the unions have done that. The majority of unions are continuing to engage in good faith with the discussions that are still taking place. It is our determination that at the end of the reforms proposed by Lord Hutton, Labour’s Work and Pensions Secretary, public sector pensions will continue to be among the best available, but we will ask people to work longer because they are living longer and to pay a bit more, to achieve a better balance between what they pay and what other taxpayers pay.

[Jon Trickett (Hemsworth) (Lab)]

How can the Minister possibly justify the announcement on the No. 10 transparency website that since November the Government have spent more than £5 million on tarting up offices in Whitehall, including £680,000 on No. 10 Downing street? How can he justify that when he is laying off nurses, policemen, servicemen and so on? Will he now publish a line-by-line account of how the money was spent?

[Mr Maude]

Point one: if we had not gone in for full transparency in what the Government are spending, the hon. Gentleman would not know anything about this. Point two: we inherited a massive programme of wasteful refurbishment of Government offices from the previous Government, including some unbelievably badly negotiated PFI contracts. If they had taken the same care as we are taking with taxpayers’ money, we would not have the biggest budget deficit in the developed world, which we inherited from his Government.

[Matthew Hancock (West Suffolk) (Con)]

T2. Does my right hon. Friend think that responsible Members of this House, in all parts of the Chamber, should condemn irresponsible strike action that puts children’s education at risk and diminishes public services? Does the silence—

[Mr Speaker]

Order. We are grateful. The hon. Gentleman has finished.

[Mr Maude]

It would be good to hear Opposition Front Benchers joining us in urging the trade unions to stay with the discussions, which still have a great distance to go, to secure what will still be among the very best pension schemes available. If schools close down, it is not just children’s education that will be disrupted, but the livelihoods of millions of parents who depend on schools being open so that they can go to work to earn the money to pay the taxes to support public sector pensions. [Interruption.]

[Mr Speaker]

Order. There is far too much noise in the Chamber and too many private conversations taking place. I want to hear the questions and the Minister’s answers.

[Mr William Bain (Glasgow North East) (Lab)]

T5. By 2014, civil society will be losing £2.9 billion a year in revenue—the same as the amount forgone in corporation tax by big companies in the United Kingdom. Why are the Government being so soft on big business and so tough on charities and the voluntary sector?

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

I reject that statement absolutely. The hon. Gentleman is pulling numbers for lost income to the charity sector out of the air and completely ignoring the volume of public sector contracts going in, not least through the recent Work programme, which is worth at least £100 million a year. As for big business, I would simply refer him to a speech made by the Prime Minister last year called “Every Business Commits”.

[Stephen Hammond (Wimbledon) (Con)]

T4. You will be aware, Mr Speaker, that my constituency will hold a national sporting event in the next fortnight, the enjoyment of which could be undermined by strikes proposed by the unions. Does my right hon. Friend agree that these strikes are unnecessary, and will he confirm the Government’s commitment to talks to ensure that they do not have to happen?

[Mr Maude]

As I say, we are committed to continuing those discussions. We had further discussions yesterday, and there will be more next week and the week after. There is much still to be resolved. It was Lord Hutton, Labour’s Work and Pensions Secretary, who recommended the changes, and in order to make public sector pensions sustainable for the future we need to drive these reforms through.

[Ian Lucas (Wrexham) (Lab)]

T6. On what date did the Government instruct parliamentary counsel to draft amendments to the Health and Social Care Bill, following the consequences of the NHS Future Forum?

[Mr Maude]

I would recommend that the hon. Gentleman ask that question of the Secretary of State for Health.

[Andrea Leadsom (South Northamptonshire) (Con)]

During 2011, I will be launching a new social enterprise, the Northamptonshire parent infant project. What assurance can my right hon. Friend give me that commissioners will be encouraged to provide medium-term contracts to charities that provide essential support services?

[The Minister of State, Cabinet Office (Mr Oliver Letwin)]

I congratulate my hon. Friend on the fantastic work she is doing with that organisation, which is tackling natal depression and perinatal problems. The central Government compact already provides for multi-year funding whenever that is appropriate. Local compacts are a matter for local decision, but I strongly encourage her county council to offer a multi-year contract, if that is at all possible.

[Diana Johnson (Kingston upon Hull North) (Lab)]

T7. How many mutuals does the Minister expect to support through his Department next year, and will he be making a further statement on the mutual pathfinder?

[Mr Maude]

We know that there is growing enthusiasm for public sector workers to come together to form employee-led co-operatives or mutuals to carry out and deliver public services. All the evidence shows that they deliver huge increases in productivity and better public services at lower cost, and I hope that the hon. Lady will give her full support—

[Mr Speaker]

I am extremely obliged to the Minister, but the House must now hear Mr Greg Hands.

[Greg Hands (Chelsea and Fulham) (Con)]

T9. To what extent does the Minister expect any PCS strike action to have an impact on our vital public services?

[Mr Maude]

We are waiting to see the result of the ballot this afternoon, but I hope that civil servants, who are imbued with a strong public service ethos, will recognise that we are seeking to achieve public sector pensions that continue to be among the very best available. However, because people are living longer, they will be asked to work for longer. Furthermore, because there is not a fair balance between what they pay and what other taxpayers—who have seen their own pensions take a hit—pay, we are expecting them to pay a bit more towards them.

The Prime Minister was asked—

[Margot James (Stourbridge) (Con)]

Q1. If he will list his official engagements for Wednesday 15 June.

[The Prime Minister (Mr David Cameron)]

This morning I had meetings with ministerial colleagues and others, and in addition to my duties in this House, I shall have further such meetings later today.

[Margot James]

Thousands of people in my constituency work hard for less than £26,000 a year. Does my right hon. Friend agree that everyone who believes in the necessity of capping benefits must vote for the Welfare Reform Bill tonight?

[The Prime Minister]

My hon. Friend is entirely right. We are right to reform welfare. Welfare costs have got out of control in our country. We want to ensure that work always pays, and that if people do the right thing we will be on their side. It cannot be right for some families to get more than £26,000 a year in benefits that are paid for by people who are working hard and paying their taxes. I would say that everyone in the House should support the Welfare Reform Bill tonight, and it is a disappointment that Labour talks about welfare reform but will not vote for it.

[Edward Miliband (Doncaster North) (Lab)]

When the Prime Minister signed off his welfare Bill, did he know that it would make 7,000 cancer patients worse off by as much as £94 a week?

[The Prime Minister]

That is simply not the case. We are using exactly the same definition of people who are suffering and who are terminally ill as the last Government. We want to ensure that those people are helped and protected. The point that I would make to the right hon. Gentleman is that if you are in favour of welfare reform, and if you want to encourage people to do the right thing, it is no good talking about it: you have got to vote for it.

[Edward Miliband]

As usual, the right hon. Gentleman does not know what is in his own Bill. Listen to Macmillan Cancer Support, which announced on 13 June: “Cancer patients to lose up to £94 a week”. Those are people who have worked hard all their lives and who have done the right thing and paid their taxes, yet when they are in need, the Prime Minister is taking money away from them. I ask him again: how can it be right that 7,000 people with cancer are losing £94 a week?

[The Prime Minister]

We are using precisely the same test as the last Government supported. All we see here is a Labour party desperate not to support welfare reform, and trying to find an excuse to get off supporting welfare reform. Anyone who is terminally ill gets immediate access to the higher level of support, and we will provide that to all people who are unable to work. That is the guarantee we make, but the right hon. Gentleman has to stop wriggling off his responsibilities and back the welfare reform he talks about.

[Edward Miliband]

The Prime Minister does not know the detail of his own Bill. Let me explain it to him. Because the Government are stopping contributory employment and support allowance after one year for those in work-related activity, cancer patients—7,000 of them—are losing £94 a week. I ask him again: how can that be right?

[The Prime Minister]

I have to tell the right hon. Gentleman—[Interruption.]

[Mr Speaker]

Order. The question has been asked; the answer will be heard.

[The Prime Minister]

The right hon. Gentleman is wrong on the specific point. First of all, as I have said, our definition of “terminally ill” is exactly the same as the one used by the last Government. Crucially, anyone out of work who has longer to live will be given the extra support that comes from employment and support allowance. Irrespective of a person’s income or assets, that will last for 12 months. The right hon. Gentleman is wrong, and he should admit that he is wrong. On a means-tested basis, this additional support can last indefinitely. That is the truth; he should check his facts before he comes to the House and chickens out of welfare reform.

[Edward Miliband]

So let us be clear about this: in his first answer the Prime Minister said that his policy was the same as the last Government’s; now he has admitted that the Government are ending contributory-based employment and support allowance after one year. Let me tell him what Macmillan Cancer Support says—[Interruption.] I think that Conservative Members should listen to what Macmillan Cancer Support has to say. Let me tell them; this is what it says—[Interruption.] I think it is a disgrace that Conservative Members are shouting when we are talking about issues affecting people with cancer. This is what Macmillan Cancer Support says—that many people

“will lose this…benefit simply because they have not recovered quickly enough.”

I ask the Prime Minister the question again: will he now admit that 7,000 cancer patients are losing up to £94 a week?

[The Prime Minister]

Let me try to explain it to the right hon. Gentleman again, as I do not think he has got the point—[Interruption.]

[Mr Speaker]

Order. I think it is a disgrace that Members on both sides of the House are shouting their heads off when matters of the most serious concern are being debated. I repeat what I have said before: the public despise this sort of behaviour. Let us have a bit of order.

[The Prime Minister]

I am grateful for that, Mr Speaker. This is important, and I want to try to explain to the right hon. Gentleman why I think he has got it wrong, and why I think what we are proposing is right. Let me explain the definition of who is terminally ill; these are horrible things to have to discuss, but let me explain. It is—[Interruption.] Hold on a second. The definition is the same one—as I say, it is six months. Anyone out of work who lives longer than that will be given the extra support that comes from employment and support allowance. That is irrespective of a person’s income or their assets and it will last for 12 months, not the six months that the Leader of the Opposition claimed. On a means-tested basis, this additional support can last indefinitely. So as I say, it is the same test as under the last Government. It has been put in place fairly, we have listened very carefully to Macmillan Cancer Support, and we have also made sure that someone is reviewing all the medical tests that take place under this system. I know that the right hon. Gentleman wants to try to create a distraction from the fact that he will not support welfare reform, but I have answered his question, so he should now answer mine: why won’t you back the Bill?

[Edward Miliband]

In case the Prime Minister has forgotten, I ask the questions and he fails to answer them.

Let me try to explain it to him. He should listen to Professor Jane Maher, chief medical officer of Macmillan Cancer Support, who said:

“In my experience one year is simply not long enough for many people to recover from cancer. The serious physical and psychological side-effects can last for many months, even years, after treatment has finished. It is crucial that patients are not forced to return to work before they are ready.”

Macmillan Cancer Support and Britain’s cancer charities have been making this argument for months. I am amazed that the Prime Minister does not know about these arguments. Why does he not know about them? The House of Commons is voting on this Bill tonight. He should know about these arguments. I ask him again: will he now admit that 7,000 cancer patients are losing up to £94 a week?

[The Prime Minister]

I have answered the question three times with a full explanation. The whole point of our benefit reforms is that there are proper medical tests so that we support those who cannot work, as a generous, tolerant and compassionate country should, but we will make sure that those who can work have to go out to work, so that we do not reward bad behaviour. That is what the Bill is about. The Leader of the Opposition is attempting to put up a smokescreen because he has been found out. He made a speech this week about the importance of welfare reform, but he cannot take his divided party with him. That is what this is about: weak leadership of a divided party.

[Edward Miliband]

What an absolute disgrace, to describe talking about cancer patients in this country as a smokescreen! This is about people out in the country and cancer charities that are concerned on their behalf—and the Prime Minister does not know his own policy. It is not about people who are terminally ill; it is about people recovering from cancer who are losing support as a result of this Government. We know he does not think his policies through, but is this not one occasion on which we could say that if ever there was a case to “pause, listen and reflect”, this is it? Why does he not do so?

[The Prime Minister]

What we have seen this week is the right hon. Gentleman getting on the wrong side of every issue. On cutting the deficit, we now have the CBI, the Institute of Directors, the International Monetary Fund, his brother, and Tony Blair, on our side, and he is on his own. On welfare reform, we have everyone recognising that welfare needs to be reformed, apart from the right hon. Gentleman. On the health service—yes—we now have the Royal College of General Practitioners, the Royal College of Nursing, the Royal College of Physicians, the former Labour Health Minister and Tony Blair all on the side of reform and, on his own, the right hon. Gentleman: a weak leader of a divided party. That is what we have learned this week.

[Rehman Chishti (Gillingham and Rainham) (Con)]

On a recent visit to India, my constituent Baljinder Singh’s mother, Surjit Kaur, a British national, was kidnapped and then beheaded in a horrendous murder. May I ask the British Government to urge the Indian authorities to carry out a full, transparent and thorough investigation and bring to account those responsible for that horrendous murder so that my constituent and his family can get some justice for their mother?

[The Prime Minister]

I understand why my hon. Friend wants to raise this case, and on behalf of the whole House let me send our condolences to Mrs Kaur’s family. I fully understand and support their wish for justice to be brought to bear on the perpetrators. The Foreign Office has been providing the family with consular support, as my hon. Friend knows, and they will arrange to meet him and the family to see what further assistance we can give. However, responsibility for investigating crime committed overseas must rest with the police and judicial authorities in that country. We cannot interfere in the processes, but I take his point to heart.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Q2. We know that the deficit was the price paid to avoid a depression caused by the bankers, but in March the forecast for the budget deficit was increased by £46 billion—£1,000 per person. Will the Prime Minister now at last accept that cuts are choking growth, that VAT is stoking inflation and that both are increasing the deficit? He is going too far, too fast, and he is hindering, not helping, the recovery. Yes or no?

[The Prime Minister]

The deficit is the price paid for Labour’s profligacy in office. In his memoirs, Tony Blair said—[Interruption.] I know that Labour Members do not want to hear about Tony Blair any more, and that is funny, really. He was a Labour leader who used to win elections, so they might want to listen to him. He said that by 2007, spending was out of control. That is the point. We need to get on top of spending, on top of debt and on top of the deficit. I understand that the Labour leader is trying to persuade the shadow Chancellor of that—well, good luck to him!

[Andrew Rosindell (Romford) (Con)]

The Prime Minister will be aware that yesterday was the anniversary of the liberation of the Falkland Islands by the forces of the Crown. Will he remind President Obama when he next sees the United States President that negotiations over the Falkland Islands with Argentina will never be acceptable to Her Majesty’s Government, and that if the special relationship means anything, it means that they defend British sovereignty over our own territories?

[The Prime Minister]

My hon. Friend makes an excellent point, and I am sure that everyone right across the House will want to remember the anniversary of the successful retaking of the Falkland Islands and the superb bravery, skill and courage of all our armed forces who took part in that action. We should also remember those who fell in taking back the Falklands. I would say this: as long as the Falkland Islands want to be sovereign British territory, they should remain sovereign British territory—full stop, end of story.

[Nia Griffith (Llanelli) (Lab)]

Q3. This week we have seen the Government change their mind on the NHS, on sentencing, on student visas and on bin collections, so will the Prime Minister tell us now whether he will change his mind over Government plans to force more than 300,000 women to wait up to two years longer before they qualify for their state pension?

[The Prime Minister]

All parties supported the equalisation of the pension age between men and women. That needed to happen. We also need to raise pension ages to make sure that our pension system is affordable. The point I would make is that because we have done that, we have been able to re-link the pension back to earnings, and as a result pensioners are £15,000 better off in their retirement than they would have been under Labour. I think that is a good deal and the right thing to do. If anyone in the Labour party wants to be serious about pension reform and dealing with the deficit, they should back these changes.

[Mr Alan Reid (Argyll and Bute) (LD)]

Q14. I agree with the Government’s timetable for increasing the men’s state pension age to 66, because it happens gradually. However, I ask the Prime Minister to think again about the women’s state pension age, because the planned timetable has it going up far too quickly and leaves women of my age—those born in 1954—without enough time to plan for what could be two years’ extra work. Will the Government please look at this again?

[The Prime Minister]

I understand the concern, but the point I would make is that, as I said in the House last week, more than 80% of those affected will see their pension age come in only a year later, so a relatively small number are affected. The key thing is making sure that our pension system is sustainable so that we can pay out higher pensions. The House had a similar argument in Cabinet Office questions, about the sustainability of public sector pensions. We have to take these difficult decisions; they are right for the long term and they actually mean a better pension system for those who are retiring.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

Q4. Does the Prime Minister agree with the Institute for Fiscal Studies that with inflation at 4.5%—more than twice his Government’s target—it is hitting pensioners and low-income families the hardest?

[The Prime Minister]

The point about pensions is that there is the triple guarantee that they will go up by earnings, prices or 2.5%, whichever is higher, so it is not going to affect them in that way. Clearly, we want to see inflation come down. I think there is a shared agreement across the House, and it is right for the Bank of England to have that responsibility. I notice that the hon. Gentleman does not raise today the very welcome news that we have seen the biggest fall in unemployment in one month’s figures than we have seen at any time in a decade. I think it is time the Labour party started welcoming good news.

[Fiona Bruce (Congleton) (Con)]

Q5. There is increasing concern within the House and across the country about the hidden suffering of trafficked children—and, indeed, retrafficked children. Does the Prime Minister agree that it is essential for a co-ordinated multi-agency approach right across the country—from borders to local authorities and local police forces, and including the excellent charitable organisations involved in this work—to be promoted urgently?

[The Prime Minister]

My hon. Friend makes an extremely good point. I know how hard the all-party group works on this issue and I listen very carefully to what it has to say. One thing that is changing, which I hope will make a difference, is the formation of the National Crime Agency, which I think will bring greater co-ordination to such vital issues.

[Angus Robertson (Moray) (SNP)]

The Scottish National party won a landslide in the recent elections and a mandate to improve the powers of the Scottish Parliament, so will the Prime Minister respect the Scottish electorate and accept the Scottish Government’s six proposals for improvement in the Scotland Bill?

[The Prime Minister]

We listen very carefully to what people have to say, and of course we respect the fact that the SNP won a mandate in Scotland; we are responding extremely positively. The first point I make to the hon. Gentleman is that the Scotland Bill, currently before the House, is a massive extension of devolution. He shakes his head, but it is an extra £12 billion of spending power. We will be going ahead with that and we will look at all the proposals that First Minister Salmond has made. I take the Respect agenda very seriously, but it is a two-way street: I respect the views and wishes of the Scottish people, but they have to respect that we are still part, and I believe will always remain part, of a United Kingdom.

[Mr James Gray (North Wiltshire) (Con)]

Q6. Last Friday was the 90th anniversary of the Royal British Legion, next Monday is armed forces day, and on Tuesday 120 soldiers from 16th Air Assault Brigade will march through the Carriage Gates into Parliament to welcome them back from Afghanistan. Can we tell them, or will the Prime Minister repeat his assurance, that the armed forces covenant will now be written into law, for the first time in history?

[The Prime Minister]

Yes, I can give that assurance, and I am delighted that the Government and the Royal British Legion have agreed the approach we will take in the Armed Forces Bill, which is passing through the House. I am very glad that the House of Commons will be welcoming those soldiers from 16th Air Assault Brigade. Like the rest of our armed forces, they are the bravest of the brave and the best of the best. We cannot do too much for those people; that is why the armed forces covenant matters, and that is also why we kept our promise to double the operational allowance to soldiers serving in Afghanistan and other theatres.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Q7. Millions of our constituents are once more facing big increases in their gas and electricity bills. Many will find it very difficult to make ends meet. What action will the Government take to help them?

[The Prime Minister]

We are taking a range of actions. Obviously, the fact that oil now costs $115 a barrel and gas prices have gone up by 50% over the last year has an impact, but we are putting £250 million into the warm home discount. We are funding a more targeted Warm Front scheme that will help 47,000 families this year. We are legislating so that social tariffs have to offer the best prices available. We are keeping a promise we made that Post Office card account holders should get a discount. We are keeping the winter fuel payment, and of course we permanently increased the cold weather payments. We did not just allow them to be increased in an election year; we are keeping those higher payments, which are very valuable to many of the hon. Gentleman’s constituents.

[Jeremy Lefroy (Stafford) (Con)]

Q8. Last week my hon. Friend the Member for Stone (Mr Cash) and I visited Walton Hall special school near Stafford. In our meetings, parents expressed their gratitude for the excellent teaching, but also their anxiety over provision for their children after the age of 19. I know of my right hon. Friend’s deep concern about this subject, so what encouragement can he give them?

[The Prime Minister]

First of all, we must support special schools. The pendulum swung too far against special education and in favour of inclusion. It is important that we give parents and carers proper choices between mainstream and special education. My hon. Friend raises an important point, which is that when disabled children become young adults, many parents want them to go on studying in further education colleges and elsewhere, yet currently the rules seem to suggest that once they have finished a course, that is it. Parents say to me, “What are we going to do now?” We have to find a better answer for parents whose much-loved children are living for much longer; they want them to have a purposeful and full life.

[Huw Irranca-Davies (Ogmore) (Lab)]

Q9. In the face of crippling energy price rises that are driving pensioners and vulnerable families into fuel poverty by the thousand every day under this coalition, is the Prime Minister struggling with his energy bill—or are any of the 21 other millionaires in his Cabinet struggling with their energy bills? When will he personally take a grip of the situation?

[The Prime Minister]

From reading the papers this week, the people who seem to be coining it are the ones who worked for the previous Government—but there we are. Clearly, fuel prices have gone up because of what has happened to world oil and gas prices, but this Government take seriously their responsibilities to try to help families. That is why we have frozen council tax, that is why we are lifting 1 million people out of tax, and that is why we have introduced the set of measures that I have described to try to help with energy bills. We have also managed to cut petrol tax this year, paid for by the additional tax on the North sea oil industry. I notice that although the Opposition want to support the petrol price tax, they do not support the increase in North sea oil tax. That is absolutely typical of a totally opportunistic Opposition.

[Mr Adrian Sanders (Torbay) (LD)]

The Prime Minister will be aware that this is national diabetes week. This year’s theme is “Let’s talk diabetes”, to encourage people with the condition to speak out and not to feel stigmatised or worried about being discriminated against or joked about in school or in the workplace. Will the Prime Minister please support this campaign?

[The Prime Minister]

I will certainly support the campaign. My hon. Friend makes the extremely good point that many people with diabetes find the illness embarrassing and something that they do not want to talk about, yet it affects more and more people. We have to find a way to encourage people to come forward and say that there is nothing abnormal or wrong about it. We need to help people to manage their diabetes, especially because we want them to have control over their health care and to spend less time in hospital, if at all possible. I fully support the campaign, and I think that we need to look at the long-term costs of people getting diabetes and recognise that there is a big public health agenda, particularly around things such as exercise, that we need to get hold of.

[Fiona O'Donnell (East Lothian) (Lab)]

Q10. The Prime Minister will know that this is my first opportunity to ask him a question. I stand here fresh and full of hope, so I shall give him one more chance to answer this question. People in my constituency and throughout the country face the enormous increases in their energy bills announced by Scottish Power. They need help now. When will the Prime Minister keep the promise that he made in opposition to take tough action on excessive energy prices?

[The Prime Minister]

As I said some moments ago, we are taking action. There is only a certain amount that can be done when fuel prices have gone up by as much as they have over the past year—a 50% increase in oil and gas. We do have the warm home discount and the Warm Front scheme. We are making sure that when there are special tariffs, companies must offer them to users; that makes a difference. There is also the point about Post Office card account holders. At present they do not get all the discounts available to people who pay by direct debit, but we are ensuring that they will get those discounts. The hon. Lady shakes her head, but that is a lot more done in one year than the previous Government did in 13.

[Jessica Lee (Erewash) (Con)]

Will my right hon. Friend congratulate Cluny Lace in Ilkeston, which made part of the lace on the Duchess of Cambridge’s wedding dress? It is the last traditional lace factory in Erewash, and our town centres have declined in recent years as a result of the loss of such factories. Does my right hon. Friend therefore agree that the review by Mary Portas aimed at revitalising our town centres has come at a perfect time? May I invite the Prime Minister and Ms Portas to visit Erewash as part of the review?

[The Prime Minister]

I shall be delighted to come to my hon. Friend’s constituency. I did not know that her constituents were responsible for the lace on the Duchess’s incredible dress, so I shall leave today’s session enriched by that knowledge. We want a growth in manufacturing and production in Britain. What we are seeing in our economy—difficult as the months ahead inevitably will be—is a growth of things made in Britain, whether that means cars, vans, or indeed lace for people’s dresses.

[Mike Gapes (Ilford South) (Lab/Co-op)]

Q11. The United States Secretary of Defence, Robert Gates, has said that the NATO operation in Libya has exposed serious capability gaps. The First Sea Lord, Admiral—[Interruption.] The First Sea Lord, Admiral Mark Stanhope, has said that the operations in Libya cannot be sustained for longer than three months without serious cuts elsewhere. Given those problems—[Interruption.]

[Mr Speaker]

Order. No help from Government Back Benchers is required. A quick sentence from the hon. Gentleman.

[Mike Gapes]

Is it not time that the Prime Minister reopened the defence review and did yet another U-turn on his failed policies?

[The Prime Minister]

He is called Mark Stanhope, if that helps.

I had a meeting with the First Sea Lord yesterday at which he agreed that we can sustain the mission for as long as we need to, and those were exactly the words that the Chief of the Defence Staff used yesterday, because we are doing the right thing. I want one simple message to go out from every part of the Government, and indeed from every part of the House of Commons: time is on our side. We have NATO, the United Nations and the Arab League. We have right on our side. The pressure is building militarily, diplomatically and politically, and time is running out for Gaddafi.

On the defence review, I would simply say that for 10 years the Labour party did not have a defence review, but now it wants two in a row. At the end of the review we have the fourth highest defence budget of any country in the world. We have superb armed forces who are superbly equipped, and they are doing a great job in the skies above Libya.

[Mark Pritchard (The Wrekin) (Con)]

By the time Prime Minister’s questions finishes, 450 children will have died from preventable disease and famine. Is it not the case that increasing Britain’s aid budget is very much the right thing to do, and will save millions of lives across the world?

[The Prime Minister]

I very much welcome the support from my hon. Friend for the policy of increasing our aid budget and meeting the target of 0.7% of gross national income. There are good reasons for doing this. First, we are keeping a promise to the poorest people of the poorest countries of the world, and we are saving lives. Yes, of course things are difficult at home, but we should keep that promise even in the midst of difficulties. Secondly, we are making sure that our aid budget is spent very specifically on things like vaccinations for children that will save lives, so the money that we announced this week will mean a child vaccinated every two seconds and a life saved every two minutes. The last point that I would make to anyone who has doubts about this issue is that as well as saving lives, it is also about Britain standing for something in the world and standing up for something in the world—the importance of having a strong aid budget, saving lives and mending broken countries, as well as having—

[Mr Speaker]

I am extremely grateful to the Prime Minister. I call Jack Dromey.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Q12. In this carers week, when we celebrate the contribution of Birmingham’s care assistants and the loving families who look after their loved ones, will the Prime Minister join me in condemning Birmingham city council for cutting care for 4,100 of the most vulnerable in our city, branded unlawful by the High Court? What does he intend to do to ensure that never again will Birmingham city council fail the elderly and the disabled?

[The Prime Minister]

Everyone in the House should welcome the fact that it is carers week. I will be having a reception in No. 10 tonight to celebrate carers week with many people who take part and who are carers. This Government are putting in £400 million to give carers more breaks and £800 million specifically to make sure that those looking after disabled children get regular breaks. What we have in Birmingham is an excellent Conservative and Liberal Democrat alliance doing a very good job recovering from the complete mess that Labour made of that city for decade after decade.

[Mr Lee Scott (Ilford North) (Con)]

Last night on Channel 4 there was a documentary called “Sri Lanka’s Killing Fields”, showing the atrocities committed by the Sri Lankan Government against the Tamil people, which resulted in about 40,000 people being killed. Will the Prime Minister join me in calling for justice for the Tamil people, and for the people who lost their lives?

[The Prime Minister]

I did not see the documentary, but I understand it was an extremely powerful programme. It refers to some very worrying events that are alleged to have taken place towards the end of that campaign. The Government, along with other Governments, have said that the Sri Lankan Government needs that to be investigated, and the UN needs it to be investigated. We need to make sure that we get to the bottom of what happened, and that lessons are learned.

[Eric Joyce (Falkirk) (Lab)]

Q13. The Prime Minister will be aware of the shambles of corporate governance that is the Eurasian Natural Resources Corporation. I would not expect him to comment specifically on that, but does he agree, on behalf of millions of pensionholders and small shareholders across the country, that high standards of corporate governance in the City of London are critical, as is the role of the Financial Reporting Council?

[The Prime Minister]

I am aware of the problem. The hon. Gentleman makes an important point, which is that of course we want companies to come to London to access capital and float on the main market or the AIM market. It is one of the attractions of Britain that we are an open global economy, but when those companies come, they must understand that we have rules of corporate governance that are there for a reason, and they need to obey those rules. I am sure my right hon. Friend the Chancellor will address that not only in his speech tonight, but in the papers that we will be publishing in subsequent days.

[Gordon Birtwistle (Burnley) (LD)]

Does the Prime Minister agree that if the coalition Government had not adopted the economic policy that they did, but listened to the advice of the shadow Chancellor instead, mortgage interest rates could be 5% higher than they are now?

[The Prime Minister]

My hon. Friend makes a very important point, which is that in this country today, tragically, we still have Greek levels of Government debt but German levels of interest rates. That is an enormous monetary boost to our economy, and we should all welcome the cut in unemployment today. If we had not taken action on the deficit and proved to the markets that we had a way of paying back the debt and the deficit, we would be straight back in the mess that that lot left us in.

Humanitarian Emergency Response Review

Wednesday 15th June 2011 Commons Chamber

12:35

[The Secretary of State for International Development (Mr Andrew Mitchell)]

rose—

[Mr Speaker]

I appeal, as always on these occasions, to hon. and right hon. Members leaving the Chamber to do so quickly and quietly so that those remaining can listen uninterrupted to the Secretary of State’s statement.

[Mr Mitchell]

I should like to make a statement on the Government’s response, which I will publish in detail online later today, to the humanitarian and emergency response review carried out by Lord Ashdown of Norton-sub-Hamdon.

The Ashdown report is a deeply impressive document. It makes a compelling, clear and powerful case for reform. The Government agree with and endorse the review’s central thesis and will accept the vast majority of its specific recommendations. Indeed, in many areas we will go beyond its specific recommendations in order to drive faster improvement in the international response to disasters. I am extremely grateful to Lord Ashdown and his team for the work they have done to produce such a compelling and well-argued review. His formidable insight and experience shine through it. I am also grateful to all those who have taken the time and trouble to respond to the consultation and whose experience has added to the quality of the recommendations.

I pay tribute today to those Brits around the world who are working tirelessly in extreme circumstances to save lives during humanitarian crises. Their work, which is often unsung and undertaken at real personal risk, is truly heroic. I also pay tribute to the role of the British armed forces in responding to humanitarian emergencies. In Pakistan last year our armed forces provided swift and effective relief, flying in emergency bridges to reconnect families separated by the floods. In Haiti they brought life-saving equipment and supplies to those stricken by the earthquake.

The report sets a challenging agenda for the 21st century. It recognises that, although disasters are nothing new, we are experiencing a sudden increase in their intensity and frequency. It makes it clear that this trend will only grow with climate change, population growth and greater urbanisation. The review concluded that the Department for International Development has played a strong role in improving the quality of the wider international response. It is an area where Britain is well respected and well regarded, but there is no room for complacency, which is why I commissioned the review and why the Government will take action to implement it.

In the Government’s response to the review, I have set out how, in collaboration with others, we will rise to the challenges presented and how we will do even more to help people stricken by disasters and emergencies. There are some fundamental principles that will guide our response to humanitarian emergencies. First, we will continue to apply the core principles of humanity, impartiality and neutrality to all Government humanitarian action. Secondly, we will respect, and promote respect for, international humanitarian law. Thirdly, and crucially, we will be motivated not by political, security or economic objectives, but by need and need alone.

We will deliver humanitarian assistance in three main ways. We will provide predictable support for our multilateral humanitarian partners, including the International Red Cross and Red Crescent Movement and the United Nations. In humanitarian emergencies, where there is compelling and overwhelming need, we will provide additional resources to the international system, Governments, charities and non-governmental organisations. We will intervene directly where the UK can contribute in ways that others cannot or where there is substantial public interest in our doing so.

Let me turn to the detail of our response. Lord Ashdown’s report identifies seven specific themes: resilience, anticipation, leadership, innovation, accountability, partnership and humanitarian space. I will address each in turn. It is not enough for us simply to pick up the pieces once a disaster has struck. We need to help vulnerable communities to prepare for disasters and to become more resilient. That is where we can have most impact and where we can prevent lives from being lost. More resilient communities and countries will also recover faster from disaster. I commit DFID therefore to build resilience into all its country programmes.

We must anticipate and be prepared for disasters. We will work with Governments and the international system to become better at understanding where climate change, seismic activity, seasonal fluctuations and conflict will lead to humanitarian disasters. With others, we will set up a global risk register of those countries most at risk, so that the international effort can be more focused.

The review calls for stronger leadership by the international community. We strongly agree that the United Nations must be central to this, and I am extremely pleased that, under the leadership of the emergency relief co-ordinator, Baroness Amos, the UN has already made that a priority. Britain will specifically back her agenda for change, but I accept that significant challenges remain. Members from all parts of the House need only look back to the Haiti earthquake or the Pakistan floods to see examples of the United Nations failing to deliver the leadership that was badly needed, so we will work with other donors for much needed reforms.

The review highlights the role that innovation and science can play in every aspect of humanitarian response. We will establish an innovations team to embed humanitarian research and innovation in our core work.

We must always be accountable for and transparent about how we spend our development budget. It is taxpayers’ money. That duty of accountability extends not only to British citizens and taxpayers, but to those who depend upon our aid. We will therefore make accountability central to our humanitarian work and do more to measure our own impact and that of our partners.

Rarely is partnership more important than in the delivery of humanitarian aid. The strength and quality of that co-ordination can make the difference between life and death. We must therefore strive to develop stronger alliances, particularly with new donors, including the Gulf states, China and Brazil. We must improve the quality of our relationships with other key bilateral donors, making sure that our efforts are better co-ordinated and the burden of responsibility shared. I also want to involve fully charities, NGOs, faith groups, the diaspora and the private sector in our emergency response work.

The review calls for the protection and expansion of humanitarian space, including for people brutally affected by armed conflict. That is crucial to our aim of protecting civilians in conflict situations. We must make a consolidated effort throughout the Government, using all diplomatic, legal, humanitarian and military tools, to secure unfettered and immediate access for humanitarian relief wherever we can.

We recognise that to deliver this ambitious agenda, it is right that we change the way in which we fund the system, making it more effective and efficient, particularly in the first hours of an emergency. I have looked at the performance and efficiency that different humanitarian agencies offer. Many offer good value for money and have a sound track record in delivering results, saving lives and reducing suffering in some of the world’s most difficult places. Some, however, do not. I am therefore outlining today increased core support for the best performing humanitarian multilaterals. I have also commissioned detailed work to design a new facility that will enable prequalified charities and NGOs to respond to crises within the first 72 hours, and to design a new mechanism to support the strongest performing British charities to improve the timeliness and quality of responses to humanitarian causes. The Government will consult further on the details of those two instruments.

This country is a world leader in responding to humanitarian emergencies. By implementing Lord Ashdown’s recommendations, and by working alongside new partners, the private sector and other countries’ Governments, we can be even better. I want this House and this country to be proud of our efforts, knowing that we in Britain will be there when the disaster strikes.

Let me end with the words of a survivor of a cyclone in Haiti:

“The water started to rise, and it did not stop...the water was already so high and strong that I could not hold on to one of my children and the water swept her away. Luckily someone was there to grab her.”

I commend this statement to the House.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

I thank the Secretary of State for his statement and for advance sight of the Government’s response to Lord Ashdown’s report. May I advise the House that I am responding today because my right hon. and learned Friend the shadow Secretary of State is currently visiting Sierra Leone? We welcome Lord Ashdown’s important report. I pay tribute to him and to those who worked with him to produce an impressive and excellent set of proposals.

Over the past year, in Pakistan, Haiti, Chile, Japan, New Zealand and Indonesia, we have seen the terrible destruction caused by a range of natural disasters. In Libya and Ivory Coast, we have seen how humanitarian crises can develop incredibly rapidly, threatening the lives and livelihoods of thousands of people. Lord Ashdown’s report reminds us that the number of humanitarian crises is likely to increase, and we must be ready to respond rapidly and effectively. We welcome the report’s emphasis on working through multilateral organisations. Does the Secretary of State agree that working multilaterally is generally the best way to ensure greater co-ordination and coherence in response to disaster and to prevent it?

The report recognises that DFID has been widely praised for its leading role in the international humanitarian community. The Secretary of State will know that since 2005 the Department has been one of the leading voices in calling for reforms in the international humanitarian system. We welcome the fact that the Government’s response recognises the need to strengthen international leadership, but what specific steps will he take to bring about that change? Will the Government take the lead in initiating a new round of high-level talks at the UN to push for greater reform, as the Labour Government did back in 2005? Why have the Government rejected a recommendation in the report to encourage the convening of a UN high-level panel to look at ways of improving the international system to face future challenges?

Our efforts in government also led to an expansion of the important central emergency response fund, and the report says that the fund should be expanded further. We welcome the extra $40 million that the Government announced for the fund in December last year, but can the Secretary of State tell us what the UK is doing to push other donor countries to make a similar substantial contribution? Does he agree that, as well as improvements in its response to disaster, the international community must do more to help to prevent and predict disasters, as Lord Ashdown’s report underlines?

As we have recently seen in Libya, gaining access to deliver humanitarian relief can be extremely difficult. I pay tribute to the many organisations, such as the International Committee of the Red Cross, Islamic Relief, World Vision and Save the Children, which are often the first to reach those who need help. Will the Secretary of State assure us that he will do all he can to ensure that aid workers can operate in safety and that aid is delivered in a way that ensures its neutrality and impartiality?

DFID is indeed rightly recognised around the world for its leadership in responding at times of crisis, and I pay tribute to its expert staff. Does the Secretary of State agree that in anticipating and responding to humanitarian emergencies, it is essential to have expert and skilled people? As DFID is reducing its administration budget by a third, can he assure us the necessary investment in humanitarian skills will be made given the scale of such cuts?

Lord Ashdown’s report recognises that the international humanitarian system is poorly equipped to ensure an equitable response for the most vulnerable—for example, women, children, the elderly and people with disabilities. I welcome what the Secretary of State said in that regard and what the Government say in response to the full report. Will he assure us, however, that the Government will ensure that across the areas identified in the report, women in particular will be fully involved in the response to disaster, wherever it occurs?

Lord Ashdown’s report underlines the important role that diaspora communities play in responding to disaster, both through remittances and by raising awareness. I am glad that the Secretary of State recognised that in his statement. Can he give us more information on what he will do to ensure that there is greater recognition of the money that hard-working people in people in the UK send home to help people in the developing world?

The Ashdown report is an important step forward. Labour provided a strong lead on this issue in government, which produced real reform, but we know that there is much more to do. As Lord Ashdown said, humanitarian work

“cannot be the sticking plaster for a lack of political action”,

but it can make an important contribution to alleviating suffering around the world. Today’s welcome words need to be transferred into concrete action to ensure that in times of crisis our aid helps those who need it most.

[Mr Mitchell]

I thank the hon. Gentleman for his welcome and for his words about the team who constructed the Ashdown report under Lord Ashdown, and about the response from my team, particularly those in DFID’s conflict, humanitarian and security department.

The hon. Gentleman is right that there is a huge amount of common ground on this matter. In opposition, we long realised that there was a necessity not to be complacent, but to accept that we could do some things better. That is why my right hon. Friend the present Prime Minister, some two years before the election, called for a report such as this, and why we have carried it out.

The hon. Gentleman was right to underline that all serious research suggests that the number of disasters will increase by as much as 50% over the next 15 years. That adds additional urgency to the work that we are doing. He was right to make it clear that the right way to lead in these disasters is through the multilateral system. That is why we are determined to play our part in making that system better. The cluster system that operates within it, in which Britain takes a leading role, is the right approach and we will do everything we can to see that it improves.

The central emergency response fund was set up by the right hon. Member for Leeds Central (Hilary Benn), who is sitting alongside the hon. Member for Edinburgh North and Leith (Mark Lazarowicz), and we supported it strongly in opposition. We think that it works extremely well and that it provides additional and immediate money in the event of a disaster. That is why we have significantly increased resources to the CERF. The additional fund that I announced today for help in the first 72 hours from pre-qualified charities and NGOs will enable us to carry on the principle of that work in, I believe, a more effective way.

The hon. Gentleman was right to make the point that building in resilience from day one is vital in all the work we do, and that is now happening. He was equally correct about the importance of gaining access for humanitarian relief, which we have called for consistently in Libya and will continue to call for in Syria and South Kordofan in Sudan. He was right that women should always be involved in such work. The role of women as people who suffer from humanitarian disasters on the front line is well understood. We give that issue our strong support through this work.

I agree with the hon. Gentleman’s point about remittancing and that there must be transparency in all that we do. As he pointed out, the money that we spend is taxpayers’ money. We are committed to recognising that. That is why we published the transparency guarantee early in the lifetime of the Government. When taxpayers’ money was used to alleviate the results of the floods in Pakistan last year, we had a floods monitor online so that people could see how hard-earned British taxpayers’ money was being spent and what relief it was securing.

In respect of these proposals, I believe that the International Development Committee has announced that it will consider in about a year’s time whether we have enacted what we have said we will do.

[Malcolm Bruce (Gordon) (LD)]

I thank the Secretary of State for his statement and Lord Ashdown for his excellent report. On behalf of the International Development Committee, I thank Lord Ashdown for his active engagement with us on two separate occasions when we were preparing our report on the Pakistan floods. I note that the Secretary of State said that he will publish more detail than he could put in the statement on the steps that are being taken to improve the UK response.

Will the Secretary of State say what role the UK can play in getting UN leadership, not least to ensure that in the most vulnerable countries the UN co-ordinator has both the competence and the line-management authority to execute effective rescue operations? He spoke about the co-ordination of NGOs and lead NGOs. Will he ensure that that is not just a UK response, but that such co-ordination will happen internationally so that NGOs do not get in each other’s way and have the opposite effect to helping in the disaster?

[Mr Mitchell]

My right hon. Friend is entirely right about those dangers, which he and his Select Committee have identified in their work, not least on the crisis in Haiti and the international response to it, particularly in the early hours.

On co-ordination, I did not answer the question from the hon. Member for Edinburgh North and Leith (Mark Lazarowicz) about the high-level panel. It is important to make it clear that Baroness Amos is leading an effective reform programme as the emergency relief co-ordinator. We back her strongly in that role, as do the heads of the UN agencies. I continue to talk to her and others at the UN about the findings of the multilateral aid review and the humanitarian emergency response review. That is the right way to take this agenda forward, so let us see how we get on with that.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

I thank the Secretary of State for his statement and Lord Ashdown for a comprehensive report. On partnership, does the Secretary of State agree with Lord Ashdown’s very strong view that we should consult those who receive aid, civil society in developing countries, and NGOs in areas where there is an established need, because those are the people on the ground who are best placed to tell us what is going on?

[Mr Mitchell]

The right hon. Gentleman is extremely experienced in these matters and he is absolutely right. I am grateful for his comments about the Ashdown report. The issue of partnership, which Lord Ashdown identifies so clearly, and the issue of accountability are at the forefront of what we seek to do. For example, when we published the multilateral aid review, we did not keep it as an internal document, but put it online. We invited those we were assessing to comment on what we said and the recipients of the money to hold us to account. We will continue to do that. The right hon. Gentleman is right to say that in the poorest parts of the world, understanding the effect of what we do on those we are seeking to help is vital to making the whole operation more effective.

[Mr Gary Streeter (South West Devon) (Con)]

I welcome this report and the Government’s response to it. Will the Secretary of State confirm that he sees a significant role in the reshaped British humanitarian response to disasters for small, niche charities, such as the west country-based ShelterBox, which are often the first on the scene with important life-saving equipment such as tents, cooking facilities and water? I am sure that he does.

[Mr Mitchell]

My hon. Friend is right about the absolute priority that the Government place on supporting such smaller charities. Many Members on both sides of the House will have seen them doing brilliant work overseas. There are a number of mechanisms through which they are supported. There is, of course, the global poverty action fund, which will have a fresh round for NGOs and charities in a month or two. ShelterBox, which my hon. Friend mentioned, will be known to many Members. It does a brilliant job and we support it strongly.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

I welcome the Secretary of State’s words today, in particular his praise for the contribution of British NGOs in responding to humanitarian disasters. I appreciate his continuing support for the central role of the UN, in particular the agency that Valerie Amos leads so well. I gently point out to him that it was disappointing that no British Minister attended the CERF annual meeting in December. Given that America and France, two of our leading allies in the development debate, do not contribute to the CERF, will he set out how his leadership on this issue will lead to the topic being placed on the agendas of the G8, European Development Ministers and perhaps a No. 10 summit, so that there is more investment in the CERF to help the UN give the leadership it so desperately needs to give?

[Mr Mitchell]

The hon. Gentleman will understand that we consider attendance at such meetings on the basis of need. We consider whether our attendance or our work in advance of a meeting will have the most effect. I and my ministerial colleagues travel ferociously in pursuit of this agenda. We have contributed in a large number of ways to the shape of the international community’s handling of humanitarian emergencies. The multilateral aid review played a significant part in that and the Ashdown review has played an enormous part in it. The Ashdown review is being read avidly by most of those who are engaged in this important work. For the future, we will consider, as we always do, what is the most effective way in which Britain can intervene to ensure the overall effectiveness of this vital work.

[Nadine Dorries (Mid Bedfordshire) (Con)]

The UN has been notoriously slow and unco-ordinated in the past in responding to certain disasters, as a result of the poor leadership that has been identified. Notwithstanding the report on the agenda for change by Baroness Amos, will the Secretary of State assure us that his Department will relentlessly keep up the pressure on the UN? The next disaster, God forbid, may come tomorrow, and we need to know that the UN is fit for purpose today.

[Mr Mitchell]

My hon. Friend is absolutely right to make that point. It is the quality of local leadership on the ground that determines how quickly we can respond. Inevitably, although the UN actors on the ground are extremely good at what they do in normal times, they are sometimes not the right people to respond to disasters. That is why it is essential to get people there who can provide the necessary quality of leadership. For example, it was very interesting that the presence of John Ging, the No. 2 to Valerie Amos, in Libya very shortly after the conflict started led to an immediate response of a much better quality than we had previously seen.

[Jon Ashworth (Leicester South) (Lab)]

Many communities in my constituency—particularly those from Pakistan and Bangladesh, although I could name many others—have a commendable record of contributing to relief when humanitarian disaster strikes. Given that, will the Secretary of State give us some more details of how he expects to involve diaspora communities in emergency relief work and ensure that their expertise is taken advantage of?

[Mr Mitchell]

It depends on the disaster, but the hon. Gentleman is entirely correct to point to the valuable work that diaspora communities do. In the case of the Pakistan floods last year, the Pakistani diaspora, not least in the midlands, made a tremendous contribution not only financially but through a number of different charities to which it gave strong support, not least Islamic Relief. That meant that it played a vital part in the overall British relief effort that was mobilised.

[Mr Julian Brazier (Canterbury) (Con)]

I welcome this excellent report and the Government’s response to it. Does my right hon. Friend agree that many of the most deprived and threatened people are those in war zones? Does he further agree that the inter-agency working that he stressed so heavily, bringing together diplomatic, military and aid effort and the best of the non-governmental organisations, is in the very best interests of the criterion of need, and does not compromise it, as has occasionally been suggested?

[Mr Mitchell]

My hon. Friend makes an extremely good point. Of course, people who live in conflict areas lose out twice over, first because they are very poor and secondly because they are permanently frightened by the conflict that is going on around them. That is why the coalition Government have made an absolute priority of doing much more in conflicted areas to bring help to people who are doubly cursed in that way. He is also right to point out that although humanitarian relief should always be circumstance-blind and help those who are in great need, proper co-ordination among all those who can help is essential.

[Ann Clwyd (Cynon Valley) (Lab)]

As the Secretary of State knows, there is a continuing argument in the development community about whether it is appropriate for the military to deliver humanitarian aid. I should like to pay my own tribute to the British armed forces, whom I have seen in many parts of the world delivering humanitarian aid to people who would have died if they had not been there at the appropriate time.

[Mr Mitchell]

The right hon. Lady makes a truly excellent point. Like her, I have seen how the military have delivered to desperate people at times of great need. We saw it, indeed, in Pakistan last year. We have not needed military support to deliver aid in Libya so far, although the military have been willing to provide it. I have discussed the matter frequently with Valerie Amos, who takes a sensible and pragmatic view in the interests, which we all serve, of trying to get aid and support through to people who are in great need.

[Mr Peter Bone (Wellingborough) (Con)]

I welcome the excellent Secretary of State’s statement. One problem appears to be the loss of life in the early hours of a disaster. We have seen emergency response teams ready to go from this country but being stopped because they do not have clearance to land in the areas affected. What can be done about that problem?

[Mr Mitchell]

I think my hon. Friend is referring to a particular incident involving a Scottish charity. I have looked at that incident in detail, and I am happy that what he says about it is not actually correct. However, it is extremely important that there should be really good co-ordination. We should not have the situation that we saw all too frequently in Haiti, which was a huge number of people heading towards a disaster target without the co-ordination to ensure that they could be effective on the ground.

[Anas Sarwar (Glasgow Central) (Lab)]

May I add my own voice to the welcome for the report of the noble Lord Ashdown and the Government’s response to it? As part of its inquiry into the humanitarian response to the Pakistan floods, the International Development Committee found that some eight months after the disaster, and with millions still in need of assistance, only one third of the $2 billion UN appeal funds had been disbursed in Pakistan. The noble Lord’s report states that that was disappointing, maybe even inadequate, and adds that it cost money, opportunities and perhaps even lives. What leadership will the Government show at UN level to ensure that that does not happen again?

[Mr Mitchell]

The hon. Gentleman identifies one of the problems with the relief effort that the international community mounted in Pakistan. Indeed, the Select Committee on which he serves has produced a most valuable report, from which the international system will learn relevant lessons. I think it would be fair to say that Britain was concerned, we were the first country to come in great scale to give strong support to the people of Pakistan in their hours of greatest need. Britain also continually pushed and prodded the international system to up its game. That was what we did at the time, and those are also the tactics that we are using now. The report will be helpful in achieving them.

[Martin Horwood (Cheltenham) (LD)]

I welcome the Secretary of State’s positive response to my noble Friend’s report. Together with the Government’s pledge to fulfil the 40-year-old promise to spend 0.7% of our national income on development assistance, including the outstanding promise to the Global Alliance for Vaccines and Immunisation, that puts us in a potentially world-leading position in international development and humanitarian assistance. Will he reassure us, though, that the pre-qualification process that he described will not inadvertently disadvantage the smaller local NGOs that are obviously on the ground first and, as the review makes clear, often do an excellent job at very low cost?

[Mr Mitchell]

My hon. Friend makes a good point. We are going to consult about the pre-qualification process, to ensure that that does not happen. The fund will be there to help those who are already on the ground, so that in the first 72 hours, when action is critical for reasons that the House will acknowledge, we can ensure that money is not a barrier to immediate and effective action. I therefore think I can reassure him on that point.

The GAVI pledging conference that took place yesterday will have a direct effect on disaster relief, because it will prevent children from getting sick. We should all be enormously proud of the leadership of Britain and the Prime Minister. As a result of the replenishment conference exceeding its target yesterday by some $600 million, we will be able to vaccinate more than a quarter of a billion children over the next five years in the poorest parts of the world and save nearly 5 million lives.

[Mark Durkan (Foyle) (SDLP)]

I welcome the Secretary of State’s thinking on a standing faculty for emergency response, including NGOs. Will he assure us that there will be no tension in practice between the follow-through on the Ashdown review and the follow-through on the previous DFID reviews, which put particular emphasis on buying results? The Ashdown review particularly emphasises resilience, innovation and science, and humanitarian space in areas of conflict, the benefits of which are not always as quantifiable as those of some other measures. Will the Secretary of State ensure that the Ashdown recommendations are not casualties of the results-buying emphasis of previous reviews?

[Mr Mitchell]

All three reviews to which the hon. Gentleman refers focus directly on the results that we are achieving, not only in delivering real value for money to British taxpayers, whose money we are deploying, but for those whom we are trying to help. Whereas the Ashdown review was a review given to the Government, to which I am responding today, the first two were reviews by the Government. If the hon. Gentleman looks carefully at all three, he will find that they are seamlessly joined by the common interest of ensuring that international development work from Britain is more effective and buys yet greater results.

[Bob Stewart (Beckenham) (Con)]

I cannot think of anyone better than Lord Ashdown to have produced such a report, and I congratulate the Secretary of State on commissioning it. The real lead on humanitarian responses is, properly, the United Nations. We have a first-class person for emergency co-ordination in the UN, in Baroness Amos. However, above her in the UN is the Security Council, which too often makes decisions at the speed of a striking slug. Is there any way in which we, as a permanent member of the Security Council, can encourage other members and ourselves to make a special case for emergency responses, so that we are not constrained by the requirements of veto, unanimity or majority voting?

[Mr Mitchell]

My hon. Friend, who knows a great deal about these issues, tempts me to stray beyond my areas of competence. However, I can tell him that the Foreign Secretary has been ceaselessly engaged over the last week in precisely that way in respect of a new resolution on Syria.

I am conscious of my hon. Friend’s point, and I agree that it was absolutely right to appoint Lord Ashdown, whose peculiar combination of talent and experience has led to this extremely good, wise and sensible report. I also agree with my hon. Friend that it is important to prioritise the UN, and to understand that at the end of the day, only the UN can be the chief co-ordinator. The UN is essential if we are to have an effective response on the ground.

[Mr Speaker]

We are grateful to the Secretary of State—there clearly isn’t a dry eye in the House.

[Katy Clark (North Ayrshire and Arran) (Lab)]

The Secretary of State says that he wishes to put women and girls at the heart of his development policy. He will be aware that violence against women and girls is a feature in such crises. How do we deal with that problem better?

[Mr Mitchell]

It is an absolute priority of the Government to try to stop violence against women—we have some 15 country programmes for which that is an absolute priority. I attended the Home Secretary’s meeting of Ministers yesterday on that very subject, and spoke about the international dimension of it. The hon. Lady may rest assured that it remains right at the top of our agenda. Of course, women and girls suffer most in such crises. We have provided protection for children and displaced women, not least in respect of the Ivory Coast-Liberian border, on which my hon. Friend the Under-Secretary of State leads. That is the most important aspect of the work that we do there.

[Laura Sandys (South Thanet) (Con)]

I welcome both the Ashdown report and the Government response. DFID is a world-class organisation with a world-class reputation.

It is particularly important to focus on anticipation. The risk register is a great addition to the tools that DFID can use. On that basis, will we also develop strategies to mitigate that risk and that can ensure that we push and help countries to move along a pathway to reduce the risk that they face from, for example, climate change?

[Mr Mitchell]

My hon. Friend identifies entirely accurately one of the seven key points made by Lord Ashdown and his advisory committee in their report. Anticipating disaster and ensuring that we develop a comprehensive risk register, and working on disaster reduction, which is one thing that the Minister of State has focused on in Nepal, are essential if we are to take that agenda forward.

[Keith Vaz (Leicester East) (Lab)]

Even though the Secretary of State has been in office for only a year, he is turning out to be outstanding at his job, supported by a very fine team of Ministers. Will he confirm that nothing in his statement will affect the Government’s ability to deliver relief to the people of Yemen? It is one of the poorest countries in the world, and it is on the brink of civil war. Will he confirm that we can still help the Yemeni people?

[Mr Mitchell]

I thank the right hon. Gentleman for his kind remarks. We understand the importance of Yemen, which remains on a humanitarian knife edge. With the Office for the Co-ordination of Humanitarian Affairs, we are looking specifically at needs mapping within Yemen for when we can get back there. We continue to give very strong support to the agencies that conduct humanitarian relief in Yemen, and to bear in mind at all times whether we can do more to assist.

[Jo Swinson (East Dunbartonshire) (LD)]

I warmly welcome the Ashdown report and the Government’s response. May I urge the Government to take an integrated, cross-departmental approach to this that includes the Department of Energy and Climate Change, the Foreign and Commonwealth Office and the Ministry of Defence as well as DFID, in order to anticipate better how different risk factors can combine to threaten human life? For example, water shortage in a politically volatile area could trigger conflict, turning a humanitarian problem into a humanitarian disaster.

[Mr Mitchell]

I thank my hon. Friend for her comments, which are extremely helpful. She is right to talk about the absolute importance of integration. I can reassure her to this extent: proposals on climate change, on which we are involved in much work, come to a cross-ministerial board, which includes DECC, DFID, the Treasury and other Departments that have a direct interest. As I indicated in my statement, we will not forget the importance of strong, cross-Whitehall collaboration.

[Hugh Bayley (York Central) (Lab)]

I welcome what the Secretary of State says about resilience and enabling countries to respond better if a crisis strikes, but does he recognise that some humanitarian crises can be avoided? If we did more work on food security and pre-positioning food stocks—in the horn of Africa, say—on climate change or on regional integration, such as by getting an upstream country to warn a downstream country when a flood is coming, we could avoid crises. Work must be done by DFID and the UN on that.

[Mr Mitchell]

The hon. Gentleman is entirely correct. That is why we have, for example, consistently sought to pre-position food and shelter in respect of Sudan, which until very recently has not been required. In respect of Pakistan, we are trying to ensure that we understand the monsoon pattern and whether any flooding will take place this year. The review and the Government’s response rightly recognise his point on encouraging resilience and anticipation.

[Rehman Chishti (Gillingham and Rainham) (Con)]

May I welcome the Secretary of State’s statement? He will know that there was an earthquake in Nepal 70 or so years ago and that another is predicted imminently. What steps are his Department taking to plan for that and to assist if that need arises?

[Mr Mitchell]

My hon. Friend accurately recognises a serious threat within Nepal. That is one reason why the Minister of State has taken a close interest, including by visiting Nepal and talking to all those who are involved there about the role of disaster reduction. We take very strong account in our planning of the points that my hon. Friend rightly makes, not only in respect of Nepal, but in other areas of stress and vulnerability.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

May I, too, welcome Lord Ashdown’s report and the Secretary of State’s statement? Does he agree that there are particular dangers for those involved when a humanitarian emergency results from a political crisis? He will remember the kidnapping of the head of Caritas earlier this year during the crisis in Côte d’Ivoire. Soldiers will continue to play an important role in providing humanitarian relief, but will he ensure that assistance is always given on its merits, and that it is not conditional on political strategy or military engagement?

[Mr Mitchell]

The right hon. Gentleman makes a good point on which I sought to be absolutely clear in my opening remarks. Humanitarian relief must be needs-based, and must not take account of such extraneous factors. That is the commitment of the British Government —it has long been a commitment of Governments of all parties, and it continues just as strongly today.

[Mr Philip Hollobone (Kettering) (Con)]

Whenever disaster strikes, and in almost whatever form it takes, there always seems to be a shortage of helicopters. What can we do to improve international co-ordination to ensure a quicker and better helicopter lift capacity in emergency zones?

[Mr Mitchell]

My hon. Friend makes an extremely good point. He rightly identifies that problem as one of the critical pinch points, as it was particularly in Pakistan last summer. We are considering that and a number of similar issues, and I hope to have more to say in due course.

[Mike Gapes (Ilford South) (Lab/Co-op)]

In his introduction, the Secretary of State said that “we will intervene directly where the UK can contribute in ways that others cannot”. I welcome that, but will he clarify whether that means intervening for the sake of the responsibility to protect agenda? If so, does he agree that often humanitarian disasters occur in areas of conflict or failed states, and that we therefore have a responsibility to recognise that we must sometimes act quickly and without the agreement of the relevant Government?

[Mr Mitchell]

In respect of the responsibility to protect, the hon. Gentleman will know that that is a technical UN term that triggers certain other actions. The point that I was making was narrower and it was that if Britain has a unique skill or the capacity to intervene in a humanitarian situation, we should always consider whether it is right to do so. That was my point and it is narrower than the basis on which he seeks to get me to proceed.

[Naomi Long (Belfast East) (Alliance)]

I warmly welcome both Lord Ashdown’s report and the Government’s response. In a humanitarian crisis, securing access to clean water and sanitation is often one of the key challenges. Does the Secretary of State agree that it is hugely important that engineering charities such as RedR and WaterAid are given the support they need to provide technical assistance in an emergency and upskill local people to make that sustainable?

[Mr Mitchell]

The hon. Lady makes a very good point. She identifies two of Britain’s brilliant NGOs, RedR and WaterAid, which both do such good work in some of the most challenging places anywhere in the world. She also identifies the importance of clean water and sanitation. Britain is doing this in terms of steady state development, with a commitment to get more clean water and sanitation to people in the poor world than the total population of Scotland, Wales and Northern Ireland, and in terms of our work through the cluster system, giving strong support on water and sanitation, not least to Oxfam. That is an absolute priority in almost all humanitarian disasters.

[Emma Reynolds (Wolverhampton North East) (Lab)]

The objectives set out in Lord Ashdown’s report will require what he calls “transformational change” across the Department to give greater prominence to the humanitarian agenda. In the Government’s response, will the Secretary of State set out in more detail how he intends to bring forward that transformational change, in particular with regard to staffing and programming of DFID projects?

[Mr Mitchell]

The answer is that I will and I have. I commend to the hon. Lady the 35-page report, which should now be on the internet, and I urge her to have a look at it and respond if she has any additional comments—as I urge all hon. Members to do.

[Jim Shannon (Strangford) (DUP)]

All the humanitarian aid we give for natural disasters, such as that in Pakistan, or to countries with civil unrest, such as Syria, Egypt and Sudan, is good news. However, the feedback from some of those countries is that those of a Christian faith and in evangelical Churches are at the back of the queue and ignored when it comes to humanitarian aid. What steps will the Minister take to ensure that that two-tier system of assistance will not continue to disadvantage those of that faith in those countries?

[Mr Mitchell]

I hear those allegations from time to time and I always ensure that they are investigated with the seriousness and rigour that such allegations obviously deserve. We have set up a working party with all the faith communities, which will commence work shortly. That will be quite a good issue for the faith communities to address and advise on. On the hon. Gentleman’s specific point, we take all such matters extremely seriously and investigate them immediately.

Points of Order

Wednesday 15th June 2011 Commons Chamber

13:23

[Eric Joyce (Falkirk) (Lab)]

On a point of order, Mr Speaker. I received a letter this morning before I asked the Prime Minister a question about a company called ENRC. The letter was from the solicitors Mishcon de Reya and it referred to comments that I made during an Adjournment debate on 23 May. Essentially, it accuses me of a misuse of parliamentary privilege and I ask for your advice on what, if anything, I should do next. It seems to me that if I call someone “a shady middle man”—as I did Dan Gertler, their client—because that is what I believe to be true and a justifiable comment, it is a use of parliamentary privilege rather than a misuse. The letter appears to be an attempt to constrain a Member of Parliament from expressing his views clearly and fairly in this House.

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order and for notice of his intention to put it to me. My response is twofold. First, if he wishes to make a complaint about the attempted denial of his parliamentary privilege by the firm of lawyers to which he refers, he needs to write to me and I will consider that complaint in accordance with the normal procedure. Secondly, I recall clearly that I was in the Chair for that Adjournment debate on 23 May. If he had been out of order, I would have said so. I did not, because he was not.

[Ian Lucas (Wrexham) (Lab)]

On a point of order, Mr Speaker. Earlier, I asked the Minister of State, Cabinet Office, whether he could tell me the date on which parliamentary counsel were instructed to draft amendments to the Health and Social Care Bill following the NHS Future Forum consultation. In response, the Minister of State referred me to the Health Secretary. In fact, the Minister of State is responsible for parliamentary counsel and should respond to that question. What guidance can you give on how to obtain that information as the Minister responsible did not respond to the question?

[Mr Speaker]

I am grateful for that point of order, of which I was unsighted. I make no complaint about that, but I simply say that I am giving an off-the-cuff response to the hon. Gentleman. Which Minister responds to a particular question put by the hon. Gentleman is a matter for the Government. I am sorry if the hon. Gentleman is disappointed by the response—or what he regards as the absence of a response—but he is an experienced and indefatigable Member who I am sure will find other ways, possibly through the Table Office, to pursue his concerns.

If there are no further points of order, we come now to the ten-minute rule Bill, for which the hon. Member for Devizes (Claire Perry) has been patiently waiting.

Remembrance Day (Bank Holiday)

Wednesday 15th June 2011 Commons Chamber

Motion for leave to introduce a Bill (Standing Order No. 23)

13:26

[Claire Perry (Devizes) (Con)]

I beg to move,

That leave be given to bring in a Bill to designate the Monday after Remembrance Sunday as an annual bank holiday in the United Kingdom with effect from 2012; and for connected purposes.

This Bill would consolidate and entrench long-term public support for our armed forces. My constituency of Devizes includes many of the Salisbury plain garrison towns and is home to more than 10,000 members of the armed forces and at least the same number of service family members.

My father, both grandfathers and my great-grandfather served in the British Army. I am therefore particularly proud to wear a poppy in early November, sport various charity wristbands, attend homecomings and parades in both Westminster and Wiltshire, observe the silence at 11 am on Armistice Day, and to lay a wreath on Remembrance Sunday. Indeed, laying a wreath at the Devizes war memorial last November was one of the most solemn and thought-provoking moments of my new career as a Member of Parliament. I am also proud to support armed forces day, introduced more than two years ago and held in late June. I know that in all of this support I am joined by Members on both sides of the House and millions of people across the country.

But I fear that with all these initiatives and opportunities to show our support we have perhaps fragmented that support—diluted the brand. And many events happen at weekends when working families—as I know for myself—can face as many time pressures as they do during the week, sometimes making their participation in weekend events difficult.

I am also concerned that while we have seen a real upwelling of support for the armed forces in the last few years, due in no small part to the tireless work of the Royal British Legion, who are Britain’s “custodians of remembrance”, as well as the work of charities such as Help for Heroes—headquartered in my constituency—SSAFA and the Army Benevolent Fund, when our soldiers return home from their current operations it may be difficult to keep this momentum going and to ensure that we as a country deliver on our obligations under the military covenant. A day set aside in our busy calendars for remembrance, support and celebration of our armed forces would help to keep the support alive in the future.

This is not a radical suggestion. Many other countries pay tribute to their armed forces with a national holiday, including the United States, Canada, Russia, France and Israel. Indeed, among the five countries spending the most on their military budgets, only Britain and China do not have a national holiday commemorating their service personnel—but at least in China soldiers get a half-day off on army day.

With your indulgence, Mr. Speaker, I would like to take the House on a 10,000-mile trip to the southern hemisphere and consider Anzac day in New Zealand and Australia. As many Members know, I have the great good fortune to be married to a Kiwi, and it was his reminiscences of Anzac day—a national holiday in those countries on 25 April—that contributed to my proposal today. Many young people from down under could tell us in detail about the brutal Gallipoli campaign of the first world war; how many fought, died and were wounded; and how many and who fell from their school. Furthermore, many will have made a pilgrimage to the Dardanelles site. Do you think, Mr Speaker, that if we asked a similar cohort of British young people to name even one first world war battle, let alone the casualty numbers, we would get a similar result? I think not.

Setting aside a national day of remembrance and celebration would help us all with that collective memory. I have suggested the Monday after Remembrance day as a bank holiday. I would equally be in favour of having the holiday on Armistice day itself, but I am aware that the British Legion has concerns about diluting the long-standing tradition of the silence, and if the Bill is taken forward I would wish to work with the British Legion and other organisations to work out the best day. However, one of these historically resonant dates would be appropriate.

It is not for me to propose an additional holiday, although I know it would be popular in the country, and I am aware that it would cause concerns for businesses. However, there are clearly some anomalies in the current distribution of bank holidays. This year we have had one bank holiday in January, three in April and two in May, but there is only one more to look forward to—at the end of August—before the Christmas break. Many people think that trading one of the bank holidays—one in May, it has been suggested—for a Remembrance day holiday in November would be a reasonable swap. Members on both sides of the House support this proposal, although my hon. Friend the Member for North Wiltshire (Mr Gray) said that he would do so on the basis that the holiday be called Wootton Bassett day, which is a suggestion I am, of course, prepared to entertain—I am relaxed about the title.

The British people support the idea. In a recent YouGov poll, Remembrance day, along with St George’s day, was the favoured date for an additional holiday in Great Britain. Last week I spent the day with young men and women of the British Army, many of whom were preparing to deploy to Afghanistan in the next few months. I was deeply moved by the spirit, dedication, determination and quiet courage of those young people. I would like the whole country to have an opportunity to pay tribute to them, their comrades, veterans of the services and those who have fallen, to whom we owe so much. I therefore commend the Bill to the House.

Question put and agreed to.

Ordered,

That Claire Perry, Andrew Rosindell, Bob Stewart, Mr Julian Brazier, Kwasi Kwarteng, Mr James Gray, Mr Michael McCann, Mr Dominic Raab, Chris Heaton-Harris, Charlie Elphicke, Dan Jarvis and John Glen present the Bill.

Claire Perry accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 21 October, and to be printed (Bill 203).

Welfare Reform Bill

Wednesday 15th June 2011 Commons Chamber

[2nd Allocated Day]

Further consideration of Bill, as amended in the Public Bill Committee

Clause 69

Ending of discretionary payments

13:39

[John McDonnell (Hayes and Harlington) (Lab)]

I beg to move amendment 53, page 52, line 21, leave out clause 69.

[Madam Deputy Speaker (Dawn Primarolo)]

With this it will be convenient to discuss the following: amendment 39, page 52, line 22, leave out subsection (1) and insert—

‘(1) Section 138(1)(b) of the Social Security Contributions and Benefits Act 1992 (discretionary payments out of Social Fund) may be repealed, if the Secretary of State—

(a) publishes a detailed proposal for a replacement scheme, or schemes, based on wide consultation with relevant stakeholders;

(b) ensures that such a scheme, or schemes, will provide financial protection for applicants in an emergency or crisis, with the eligibility criteria for applicants specified in regulations;

(c) demonstrates the feasibility of such a scheme, or schemes, through a pilot or pathfinder process; and

(d) demonstrates how an independent appeals mechanism will be implemented.’.

Amendment 40, page 52, line 24, leave out subsection (2) and insert—

‘(2) In consequence of the provision in subsection (1), the office of the social fund commissioner may be abolished.’.

Amendment 54, page 128, line 28, leave out Schedule 8.

[John McDonnell]

Amendment 53 relates to the abolition of the social fund and addresses a number of the concerns that Members raised on Second Reading and in Committee.

The Government propose to abolish key elements of the social fund—the community care grants and the crisis loans—and to replace them with support through local authorities. The social fund, particularly the crisis loan, is critical to many Members in representing their constituents. That is the case not only in my constituency but across the country. These mechanisms support people in desperate need and at key times in their lives, and they are safety nets when people are facing essential expenditure that they cannot meet. My concern is that many organisations have made representations to the Government, Committee members and Members of the House urging that the social fund should not be abolished without robust and effective alternatives put in its place. The proposal should certainly be fully explored and tested before any change is made.

Social funds have been critical. The numbers of recipients of social funds and of applications demonstrate their importance. In 2009-10, there were 640,000 applications for community care grants, 3.64 million for crisis loans and 1.69 million for budgeting loans. Some 263,000 CCGs were awarded, 2.7 million crisis loans were awarded, and 1.2 million budgeting loans were awarded, so the expenditure was significant. They have a significant impact on individuals’ lives and in tackling poverty across the country. Some £139 million was spent on CCGs, £109 million net was spent on crisis loans, and £482 million gross on budgeting loans. This is therefore a large-scale activity that is vital to the most vulnerable and poorest members of our society. Even at this level of expenditure, however, the Public Accounts Committee concluded, having investigated CCGs, that only 32% of legitimate demand was being met.

I am extremely pleased that the Department for Work and Pensions is retaining budgeting loans and advance loans for alignment payments. However, I and many Members and voluntary organisations working in this field are unclear about what will replace the crisis loans and the CCGs. I am gravely concerned about the proposals to transfer responsibility to local authorities, which will be expected to design their own schemes for emergency support. Those responsibilities are being transferred at a time when local authority budgets are being cut. My understanding is that the funding will not be ring-fenced. In their consultation, the Government suggested that local authorities could also meet some of the demands with payments in kind—food parcels and second-hand furniture were mentioned as examples. I am also concerned that without clear guidance councils might be able unilaterally to introduce and force new conditions on those applying for emergency support.

I tabled the amendment because of the real danger that we will now be faced with numerous schemes being developed by local authorities, and that vulnerable people will lose this essential support. I am concerned that if the funding to local authorities is not ring-fenced, it will be diverted to other priorities.

Let me give the example of what happened to the playbuilder grant in my area. I chair the local play association, which I also helped to set up. When the ring fence was lifted, the Government initially sought to withdraw elements of the second year of the scheme. I am grateful that the Secretary of State for Education reinstated them and returned significant amounts to local authorities, which was a real breakthrough. However, because the money was not ring-fenced, much of it unfortunately appears to have been diverted into other areas of council expenditure, rather than going to improve play for children. That is just one example, from the most recent period, of funds that were not ring-fenced being allocated to local authorities and then spent for purposes other than those that the Government had intended. The Minister has agreed that allocations will be based on social fund spending, which will be regularly reviewed and the data updated. However, my concern is that if money is not ring-fenced in the first stages, it will be creamed off in the early years to be spent elsewhere.

[Sheila Gilmore (Edinburgh East) (Lab)]

We in Scotland have had four years’ experience of the removal of ring-fencing, supposedly to free up local authorities. I would be interested to hear my hon. Friend’s comments on our experience. Now that the ring fence has been removed, it is difficult to track what is happening to funds such as the supporting people fund, which give people valuable low-level support.

[John McDonnell]

I hope that my hon. Friend will forgive me: I forgot about the experience in Scotland. What she describes is a classic example of what could happen. I am quite fearful, because I have been a councillor and I know about the pressures on local authorities when they expend their resources. If there are no clear guidelines or statutory duties placed on the authorities, elements of expenditure that the Government might have allocated with the best of intentions might not be spent in the way that the Government would want.

I am fearful that if people lose access to the scale of emergency support they currently draw on, their alternative will be to go to higher-cost lenders such as loan sharks, thereby falling into greater debt. Even in advance of the reforms, we have already had a number of pawnbrokers opening up in the town centre in my area, with the local citizens advice bureau reporting increased evidence of the use of loans from loan sharks. A number of organisations have expressed their concern that having numerous different local schemes could mean that we end up with—I do not like this phrase—a postcode lottery of access to life’s necessities, as a result of the loans not being distributed coherently and consistently. I am also concerned that local authorities seem not to have been given any guidelines or directives about establishing an appeals mechanism. Unless an appeals mechanism is set up, claimants will not have the security of being able to challenge decisions made locally.

I would therefore urge the Government not to abolish or wind down the social fund without giving an absolutely clear commitment about what will replace it. If emergency support is to be localised, we need strong, unambiguous and extremely clear statutory duties placed on local authorities to support vulnerable people, and for those duties to be attached specifically to such funding. I urge the Government to think again about ring-fencing, so that the money cannot be diverted away from the poor. The social fund commissioner proposed that the Government consider establishing national criteria for the schemes to be drawn up by local authorities, to ensure consistency in the use of local discretion. It would still be possible to reflect local circumstances, but national parameters would be set on the use of that discretion. I am also concerned that the devolution of emergency support services might create high administrative costs—this has been mentioned by a number of organisations, including Age UK and the Disability Alliance—which might divert funds away from provision for the poorest.

[George Hollingbery (Meon Valley) (Con)]

I am listening to the hon. Gentleman with interest. Would he like to comment on the observation made in the evidence that we received on the Public Bill Committee that the distribution of such loans nationally is very uneven in any event, despite a national body administering them? On that basis, would there not be some merit in distributing funds to local authorities on a needs basis?

13:45

[John McDonnell]

I appreciate that argument, but there is a difference between having a national system and having a complete free-for-all at the local level. There is a midway point, which would involve the Government setting clear criteria and guidelines, backed up with statutory force, so that when the changes are introduced locally, funds are not diverted but go to people who need them, and local authorities do not face high administrative costs. What I am searching for is Government action to reach a compromise and achieve a balance between national distribution and local distribution, thereby avoiding a free-for-all.

[Brandon Lewis (Great Yarmouth) (Con)]

I appreciate the hon. Gentleman’s generosity in giving way, but I would query what he is describing. Would it not go against the ethos of the Localism Bill, which is about trusting authorities with the responsibility to do what is right for their areas, and trusting the electorate to keep them in check so that they do just that?

[John McDonnell]

I understand, and, coming from a local government background—both as a councillor and as a local government officer—I very much support the localist agenda of freeing up local authorities to do as much as they can to reflect the direct wishes of the local electorate. However, we are talking about people in severe poverty, and one of the overall duties of government at every level is to ensure that people in our communities are not put at risk as a result of that poverty. Therefore, there is a danger in the localist agenda, which I support, of allowing a free-for-all. Without establishing national standards and monitoring, we could have a number of local authorities failing to fulfil their responsibilities as we would wish. Although I agree with the hon. Gentleman that the local electorate should hold those authorities to account, we have unfortunately had numerous examples—I speak as an advocate of local government—of that mechanism for keeping local authorities in check not being effective, particularly on the detail of administering such schemes. I am sure that we can all cite examples of that on a cross-party basis, no matter who has been in control.

I am not talking about just my individual concerns. Virtually every organisation dealing with the poor in this country has expressed its concerns about this element of the legislation. My local citizens advice bureau has provided me with numerous examples—which I will not take the House through—of the benefits of both social loans, particularly crisis loans, and community care grants. I would like to take this opportunity to thank Heather Brown, director of the Hillingdon CAB, and all her team for their hard work. They have emphasised the need to explore all the implications locally and nationally before the Government leap into a new system.

Shelter and Crisis, the housing charities, have undertaken their own assessments of the process. Crisis surveyed 250 of its housing advisers. Numerous Members across all parties work closely with Crisis, and we have the greatest of respect for its work. That survey showed that 69% of clients used crisis loans for rent in advance, with 87% using them to help furnish their properties. In its briefing, which many Members will have seen, Crisis quotes one person as saying that unless we have a system that is at least as effective as the social fund, the effect on efforts to get people to move into independent accommodation would be “catastrophic”. Anxieties have been expressed across the board about the fact that we have not yet had that assurance.

I am concerned about the lack of analysis in the Government’s proposals of people’s needs. There is also a lack of detail on how the proposals will work. My worry is that poor and vulnerable people will be put at risk as a result. It therefore behoves us as a House in discussing this Bill, as well as the Government, to come forward rapidly with detailed proposals that have statutory backing, in order to assure our constituents and all those working in the field that we will have a system to provide emergency support to people who are poor and vulnerable, but not one in which local decision making risks diverting those resources away from where they are needed. It is on that basis that I have tabled this amendment for discussion. I hope that, as a result of this debate, we will at least gain a clear understanding of how the Government are going to address these issues—and address them fairly urgently—given that they are causing considerable concern.

[Ms Karen Buck (Westminster North) (Lab)]

I congratulate my hon. Friend the Member for Hayes and Harlington (John McDonnell) on the way in which he has introduced this group of amendments. His amendments and those tabled in my name cover much the same ground. Like him, I am deeply concerned that the Government propose to remove the discretionary element of the social fund without giving us a great deal more clarity about how the poorest and most vulnerable will be protected, about the adequacy of the replacement system, about the protection of vulnerable people without a local connection—a matter to which I shall return in a moment—and about the lack of a proper system of review. As my hon. Friend rightly said, the numbers involved are significant, with 640,000 applications for community care grants and 3.6 million applications for crisis loans. We are not talking about a modest amount of money, and those figures represent a great deal of need. He also suggested that they represent only the tip of the iceberg of need. Of course we accept that there cannot be unlimited capacity to meet need, and it is clear that, were more resources to be made available, more need would come out and be met.

I want to pick up on a point that my hon. Friend made in response to an intervention. Despite the numbers of people who apply for and receive loans and grants under the discretionary grant, and the fact that when local government takes on this responsibility it will be accountable, in the spirit of localism, to its electors, we must recognise that the characteristics of people who seek assistance from the social fund do not make them a cohort of people that is likely to influence local politicians on a significant scale. This will tie into comments that I will make in a moment about what we should do with people with no local connection.

All the evidence that I and my hon. Friends have received from our law centres, citizens advice bureaux and other organisations shows that the claimants of discretionary social fund elements are very likely to be highly mobile people in a crisis that frequently severs their connections to the local community. They are not likely to be over-represented among those on the electoral register, or to wield a significant amount of local clout. They would not always need to do that; a good, responsive local authority will map and respond to their needs without it, but the reality is that, in a competition for scarce resources, that will not always be true of all local authorities.

We are completing the stages of the Welfare Reform Bill today, having been asked to make decisions on a number of important elements, which we discussed on Monday and are debating today, without having been given a great deal of substance or detail about how those elements will work. The Government called for evidence on the discretionary element of the social fund in February, but the consultation did not close until we were in the middle of the Bill’s Committee stage. That worries me. Yet again, the Government seem to be pushing ahead with their proposals even though we have not had a proper opportunity to reflect on the breadth of views and opinions of people with experience of and expertise in the subject.

The Minister might care to report to the House on what the responses to the consultation actually said. It would be nice if she assured us that all the responses would be placed in the Library. I think I can guess, however, that their overwhelming tone will be one of deep disquiet, and that they will be urging the Government to think again, which is consistent with the principles outlined by my hon. Friend the Member for Hayes and Harlington. As he said, almost all the organisations with expertise and specialist knowledge in the operation of the social fund have told the Government of their worries. Let us take note of who they are. They include: Age UK; the Association of Directors of Adult Social Services; Barnardo’s; the Child Poverty Action Group; Citizens Advice; Community Links; Crisis; Disability Alliance; Family Action; the Family Fund; the Family Rights Group; Gingerbread; Homeless Link; the National Housing Federation; Oxfam; Platform 51; the Prison Reform Trust; Save the Children; Scope; and St Mungo’s. I am sure that there are others.

Those organisations are the big society in action. In many cases, they provide complementary services to the social fund, and they are expressing their concerns about the Government’s proposals and about their capacity to deliver to the people who will need their services when the changes are introduced. If the Government are serious, as I have always thought they were, about the idea of the big society and about a partnership with voluntary and community organisations, surely the first principle must be to listen to what those organisations are saying. Let us take an example from that list. Oxfam has said:

“The Social Fund provides vital support for people in times of crisis. The government proposes to devolve much of this money to local authorities, but without any statutory duty on them to provide an equivalent system of protection. This runs the risk of driving people to use high-cost lenders, reducing their chances of managing their debts successfully. This is particularly important as Universal Credit constitutes a radical reform, and it is almost certain that its introduction will suffer from teething troubles. These are likely to cause significant need for emergency payments like crisis loans, just as they are abolished. The Social Fund needs to play an important role in protecting people during this transition, which further supports the need for a delay to the change.”

The Committee also heard directly from people who know more about the social fund in all its strengths and weaknesses—we know that there are some weaknesses in the operation of the existing scheme—than anyone else. They included Sir Richard Tilt from the Social Security Advisory Committee, who said:

“Community care grants are the bit I am most concerned about—£141 million. By the time that you have dished that out to 100 plus local authorities, there will not be a great amount of money at local level, and I think, as it is not ring-fenced, it is likely to disappear into other things.”

He also said:

“My view on all this is that we have a UK social security system and that, for the past 25 years, the discretionary social fund has been the ultimate, final safety net for the poorest and most vulnerable…I would argue for a UK safety net underneath it.”––[Official Report, Welfare Reform Public Bill Committee, 24 March 2011; c. 82-3.]

Professor Kempson told the Committee, in respect of the role of local authorities:

“Some will provide a better service than we have now”.

I do not think that that is in doubt. There is excellent practice in local government. Like my hon. Friend the Member for Hayes and Harlington, I also came to the House after serving in local government and I am a great advocate of it. Professor Kempson said:

“Some will provide a better service than we have now; many will provide a worse service; and some, I fear, will provide almost no service.”

She also said:

“As I read it, there will be no ring-fencing, and I cannot even see that there is any proposal as yet to build in any form of accountability by local authorities. That is the very least that is needed.”––[Official Report, Welfare Reform Public Bill Committee, 24 March 2011; c. 82-3.]

We know that the social fund has many flaws and has been subjected to scathing criticism from the Public Accounts Committee, the National Audit Office and others. I completely accept that those criticisms need to be taken seriously. The issue before the House today, however, is whether the Government’s proposal risks making things worse by entirely removing that essential safety net without addressing the genuine concerns of the present system. The Minister made it absolutely clear to the Committee that

“there is no expectation that local authorities will replicate the current scheme.”––[Official Report, Welfare Reform Public Bill Committee, 3 May 2011; c. 731.]

She is nodding at that. She made it clear that, when the discretionary social fund is removed, local authorities will provide a service equivalent to the present one. She said that this was not devolution to local government, but something fundamentally different.

Central to that is the fact that the Government do not expect local authorities to manage loan schemes, as happens now with the crisis loan scheme, and that as loan repayments were topping up the available resource through the current crisis loans, the capacity to provide an equivalent level of service through emergency funding is now severely restricted. The figure I was given was 84%, although the Minister told us in Committee that it was 50%—and I am happy to accept her correction. None the less, the cash sum as an annual figure starting from now that will be devolved to local authorities does not tell us much about the funding that will available for the equivalent level of crisis service once the scheme gets under way because that 50% repayment will very quickly fundamentally erode the value of the service. As we have heard, the likelihood is that it will drive people into the arms of the cowboy and high-interest lenders as well as into debt.

14:00

The current proposals expect local authorities to devise their own schemes for emergency support, but without ring-fencing or without specific accountability attached to the funds. It is highly likely, as we know, that some or all of the funds can be diverted into other local priorities and the safety net would disappear.

The Government also envisage local schemes that will make use of the provision of other cash support to assist people in need, as my hon. Friend the Member for Hayes and Harlington said, emphasising the potential use of credit unions, charitable support, recycled furniture outlets and food banks. Setting aside whether that is really the kind of service that we want to operate, it has to be accepted—this is central to our thinking—that in many cases, although not all, when people are in need of emergency assistance, money is the best way of helping them to purchase the goods that they are likely to need.

That is very much in the spirit of empowerment, which we often hear the Government talk about in other respects. When people are at a crisis point in their lives and turn up to ask for assistance—perhaps fleeing domestic violence and needing to set up a new home—I fail to see how it empowers them when the only thing available is a second-hand recycled white goods store that may or may not have the form of assistance that they need. Whether or not it will be good value for money is another point. We all know that second-hand and recycled goods are of less value than new ones. There are all kinds of practical issues to consider.

[Sheila Gilmore]

Is it not also the case that many of the arrangements for people to purchase second-hand furniture are increasingly set up as social enterprises, which are intended to recoup money and make a working profit to go back into the business, so they will charge people, albeit less than for new goods, as otherwise their enterprise will not work? In any event, if this were going to be free, it would have to be heavily subsidised by someone.

[Ms Buck]

My hon. Friend makes an excellent point. The Government’s mindset is an old-fashioned one. There is an excellent case for making better use of recycled goods as a commercial or social enterprise facility, but there is also a strong empowerment argument for letting individuals make their own choices with cash at their disposal to meet their needs appropriately. As my hon. Friend rightly says, in many cases, the vision we used to have of a charitable sector simply opening a warehouse into which people can go to choose whatever donated goods might be available no longer applies.

[George Hollingbery]

I would counterpoint that on the basis that it is entirely possible to imagine a financial arrangement between the charity and the local council in which the council uses the funds provided for the purpose to future-buy services from the charity, giving people free access under certain circumstances to the products provided. There are many different ways to skin this cat; I can see these arrangements working perfectly adequately.

[Ms Buck]

The problem is that once we start creating a necessity for such an arrangement to be run at every single local authority, we will also create the potential for a mismatch between the goods that people need, the goods that are available, the charities providing those services and the area in which they are available. That also risks setting up a completely bureaucratic system in every single local authority to do what the current discretionary social fund does.

[George Hollingbery]

I do not suggest for a moment that what I said should be a prescription nationwide. I said simply that it is easy to imagine an entrepreneurial solution that used the social fund to provide services locally that were administered by local councils but did not involve money changing hands.

[Ms Buck]

I will do a deal with the hon. Gentleman. If he supports our amendment, I will accept his point. There is some truth in what he says: there is some excellent practice out there and plenty of innovation in the local government sector, but it is not consistent across the piece. The amendment effectively says, “Do not abolish the discretionary social fund without piloting or without allowing a proper ability for local authorities across the piece to demonstrate that they have the capacity to do what needs to be done”. The hon. Gentleman might well have enough confidence in that, but it cannot be guaranteed. At the moment, there is absolutely no assurance that a consistent level of innovation, expertise and commitment is available in some, let alone most local authorities.

[John McDonnell]

In my constituency we have done just that. A furniture fund has been set up by a voluntary organisation that is partly contracted by different agencies, but it has taken us 10 years to get to that. Now, because of people’s change in circumstances as a result of loss of benefits, we are setting up an arrangement for food parcels, which are being distributed by religious organisations. It is, however, extremely difficult, and it takes a long time to set this sort of thing up. My anxiety is that in the rush to legislate on this matter, none of the preparatory work has been done and there are considerable costs in setting these things up, particularly in the early years.

[Ms Buck]

That is an excellent point. As we have said so many times in debating this Bill, one does not necessarily disagree with some elements in principle—localism and the involvement of local government in shaping the response to local needs, for example—but these local projects take a long time and require investment to set up and they tend to come and go. In north Paddington, one of the most deprived communities in the country, two credit unions were set up over the last 15 years—with regeneration funding in both cases—but they have both collapsed. I do not want some of our most desperate and vulnerable people to be forced into reliance on a set of services that come and go, that might not be available and that might well collapse. I think credit unions are marvellous; I would like to see them flourish in all parts of the country, but they are much more vulnerable than people sometimes allow.

[John McDonnell]

Many of us have been through the same exercise that my hon. Friend described to establish credit unions, so the last thing we need at the moment is anything that destabilises our local credit unions. Loading this sort of responsibility on to them could undermine not only individual credit unions, but the whole sector.

[Ms Buck]

That is absolutely right. We need to carry on growing the local expertise and the local voluntary and community organisations, including credit unions, which need to come up with innovative and practical responses to help deal with our social problems. However, they are not a replacement, but a complement, and they have to be approached with a great deal of care.

[Jim Shannon (Strangford) (DUP)]

I commend credit unions to all Members for the work they do, but for those in financial difficulties, the crisis is already there and unless someone is already in a credit union, they cannot borrow from it. With respect, I do not believe that credit unions are an option.

[Ms Buck]

That is absolutely right. The Government mention credit unions as part of the package of alternatives that they want to see picking up the slack. They may have a role for some people, but the hon. Gentleman is right that they are not an emergency response. As I said in my opening remarks, precisely because a disproportionate number of the individuals who need crisis intervention do not have a local connection or a stable household background, they are the ones who will not be in a credit union. They are disproportionately unlikely to be in a credit union or to have the scope to be able to join one. That is precisely why the social workers—expected to be a part, although admittedly not the entirety, of the gatekeeping process for the replacement of the discretionary social fund—are so concerned. Although they will not be alone, they will be very much on the front line of gatekeeping for this dramatically reduced and very different type of service, which is patchy and might be flourishing in some cases and not in others. As I said in Committee, the consortium of community care stated a few months ago that social workers are anxious about having to deliver the social fund, knowing that applications for community care grants are already turned down in 60% of cases. They say that their role as advocates and supporters for people in need through a crisis in their lives is dangerously undermined by the new financial gatekeeping role that they will be asked to take on.

In evidence to the Committee, Councillor Steve Reed, speaking on behalf of the London Councils and the Local Government Association, said that local authorities have expressed an in-principle willingness to be part of this process. I understand why he would do that. He also told the Committee that he was worried that the localisation of the discretionary social fund should be fully funded and that it should cover all the costs, including the administration costs, which, for the community care grant alone, were £19 million in 2008-09. As we have drawn out in the debate over the past hour, the likelihood is that the administrative process for local government and the gatekeeping, which will not simply be about deciding whether to give a crisis loan or community care grant but whether to find people alternative levels of support, are likely to put an increased financial burden on local authorities.

Some Government Members on the Committee argued that social workers and others will be able to provide more intensive, personalised intervention for people in crisis, helping to end a cycle of repeated loan applications, but that is likely to make the situation worse. If the 3.64 million crisis loan applicants or 640,000 applications for community care grants have to be funnelled through a more intensive and personal level of intervention, who will do that work? Where are the social workers and the available time in local government to improve on this? The answer is that they will not be there. Local authorities are retrenching and they are on the back foot financially, and the likelihood is that they will have a smaller pot of money as they act as gatekeepers for an even wider group of individuals.

The Minister tells us that there is an expectation that there will be some form of review process, but the current review process is national and now every local authority will be expected to set up its own, leading to huge complications with differences in approach and the structure and bureaucracy of setting up a process in every local authority to determine how initial decisions will be reviewed and appealed against. I know that that causes a great deal of alarm in the advice sector.

Let me return to the vexed concern about local connection. Sample work on discretionary fund cases was carried out by the Department last year, which considered a basket of 500 different cases, and 20% of those cases involved people who were homeless. Some 20% and more of the applicants in such cases—the amount varied between different parts of the country—had no single connection with any individual local authority. That is my single biggest concern about the Government’s approach to this agenda.

One example, which was highlighted in the media last week, is the case of victims of domestic violence. A group of the women’s charities has written to the Minister for Women and Equalities, warning that some councils will not be financially able or willing to help women escape violent partners on the grounds of the provisions in this part of the Bill. The belief is that there will be an increased postcode lottery of provision that does not reflect the Government’s previous claim that tackling domestic violence is a priority and the fear is that councils could impose a local connection test that could disadvantage women fleeing domestic violence who are often, almost by definition, forced to move into another local authority area. The charities say that many women fleeing the home have to leave everything behind, including household furnishings and essential items, such as cookers, that most families take for granted to rebuild their lives in a new home. They quoted a mother from Croydon, south London, who left her abusive partner in 2003 and said that she had only been able to escape a life of domestic violence thanks to a £700 grant that helped her to rebuild her life. The chief executive of Women’s Aid said:

“The social fund is a vital resource for victims attempting to rebuild their lives after domestic abuse and, if it is not available, victims may be forced to return to their abusers.”

The director of Refuge added that if the discretionary social fund is abolished, there is a risk that

“more women will be forced to delay their escape from their partner.”

14:15

We flagged up other groups in Committee that deserve to be mentioned again, such as those that deal with the problems for ex-prisoners. About 66,000 people leave prison every year, a third without accommodation. The Prison Reform Trust has lobbied me and others on its concerns about the loss of the discretionary social fund and has flagged up the fact that ex-prisoners have a particularly strong need for early financial assistance to prevent debt, because once they are in debt there is a grave danger that that will lead to a risk of reoffending, as the two are heavily correlated.

I worry that local authorities, which are subject to political pressures from their resident populations and forced into painful choices that, in some cases, involve retrenching youth services, libraries and so on, are hardly likely when allocating a non-ring-fenced grant to make ex-offenders, for example, a priority. That is human nature. It is inevitable that some groups will be less of a priority than others and ex-offenders are likely to be a particularly at-risk group in that context. If we take each local authority on its own merits, we can understand the political reality of that position, but it will come back and bite local communities and the Government many times over if those individuals are not assisted and cannot make a stable life for themselves after they leave prison.

Local authorities such as mine and such as those in seaside communities, in particular, have an incredibly high population turnover. In my constituency, 30% of those on the electoral register alone move address every single year. Those individuals do not have a local connection and there will be a real risk that a mechanism will be created to determine who does and who does not have a local connection. Where, then, will those individuals go?

When the Committee took evidence, the Secretary of State said that there would be a “moral duty” on local councils. I repeat what I said in Committee: I do not know what a moral duty means. We all believe that local authorities have moral obligations and we have a moral obligation to respond to homelessness, to children in need and to the care needs of our elderly people, but in practice, without a legislative framework, people will not necessarily assume that duty if they have grounds to believe, for example, that the person approaching them at a time of crisis is not someone whom that specific local authority has a duty to assist. Although I welcome the principle of a moral duty, I want to see a legislative framework. I want to see it piloted so that local authorities have the opportunity to draw up a code of practice that can be tested and shown to work so that when people do not have a specific local connection they will be dealt with and not turned away.

For all those reasons, and for the reasons so well expressed by my hon. Friend the Member for Hayes and Harlington, I shall press amendment 39 to a vote. There might be scope for a localised response to some of these needs, but we are a long way from having anything like the structures, framework and legislation to enable individual needs to be accommodated, including with reviews and when the vexed question of local connection is not resolved. I hope that the House will take the opportunity to say that we should not proceed until we have seen this working in practice and dealt with any of the problems that will undoubtedly arise.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

I know that the right hon. Member for East Ham (Stephen Timms) is keen for us to make progress today and was somewhat concerned that we did not complete consideration of all elements on Monday. I will try to address all the issues that I am able to address in a speedy manner so that we can consider things fully.

Right hon. and hon. Members who have been listening to the debate thus far will already have a flavour of the complexity of the current scheme. Unfortunately, the scheme is open to widespread abuse, and some of that is driven by the remoteness of the administration of these elements of the discretionary social fund. Just so that hon. Members are absolutely clear, I should say that we are talking about replacing budget loans, crisis loans and the community care grant with national payments on account, including advances and alignment payments, and with local authority -delivered local assistance. The bulk of the comments of the hon. Members for Hayes and Harlington (John McDonnell) and for Westminster North (Ms Buck) were about crisis loans, half of which are alignment payments, which will continue to be paid at national level through payments on account. It is important that hon. Members are aware that to all intents and purposes people will still have access to that money on a national basis. I hope that will reassure hon. Members regarding a number of the issues raised.

I do not think that the status quo is an option because of the level of abuse in the system at the moment. First, the number of crisis loans has tripled since 2006, but we do not believe that that increase reflects an underlying increase in genuine need as a result of the recession or anything else. We have looked in detail at the individuals who are causing that increase in demand and our analysis has shown that it is being driven by young single people on jobseeker’s allowance, many of whom are still living at home. We should be looking at what is driving that demand and asking whether the money is getting through to the sort of vulnerable people about whom the hon. Member for Hayes and Harlington is rightly concerned.

[Ian Paisley (North Antrim) (DUP)]

What is the Minister going to do to ensure that the operation of the social fund across the devolved regions does not set a hierarchy of standards and differences that are so far apart that people come to realise that the social fund operates very differently in certain parts of the UK? That would create hardship for many vulnerable people.

[Maria Miller]

The national payments on account will be dealt with on a national basis in the same way in any part of the country and the regulated part of the social fund will continue as it is. The hon. Gentleman is talking about how local assistance will be dealt with and I am sure that he, like all hon. Members, will know that local authorities want to do their best by the vulnerable citizens we are talking about. That is certainly my experience of most, if not all, local authorities.

[Naomi Long (Belfast East) (Alliance)]

Will the Minister give way on that second point?

[Maria Miller]

Will the hon. Lady forgive me if I make a little more progress? As I have said, we really need to move through this quite quickly.

Another reason why the status quo is not an option was highlighted only this week when community care grants were referenced in a “Dispatches” programme, which showed that an ex-offender who had received a community care grant for resettlement had spent the money on drugs. We should all be concerned about the lack of checking on how money is used and we should look at how to improve the system.

The hon. Member for Westminster North took a great deal of pain to talk about people who claim crisis loans having some degree of mobility and disengagement from the democratic system. I am not sure what evidence she has to support those assumptions, but we do not have that evidence to hand. The three elements of the discretionary scheme that I have talked about have very different and distinct client groups.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

May I draw the Minister’s attention to one group of people who might fall into that category? Victims of domestic violence might not be on the electoral register because they are forced out of one area and into another and they therefore do not have the democratic accountability that comes through the ballot box.

[Maria Miller]

The hon. Lady is obviously a mind reader, because I was just about to talk about whether the changes we are discussing will be a problem for victims of domestic violence—a group whom we all want to ensure get that support and are able to move to a place of safety, as is absolutely right. We do not believe that the new localised service will be a barrier to people in genuine need, particularly victims of domestic violence. It will provide an opportunity for more joined-up services on the ground while continuing to give individuals in that situation access to national payments on account through advances or alignment payments. The hon. Lady will be aware that under the current scheme victims of domestic violence must have fled the family home to qualify for support to set up home from the discretionary social fund.

A third and very important reason why keeping the status quo is not a sensible option is the need to align support with the wider changes that are happening in the welfare system. To continue running the current administratively burdensome system is no longer financially sustainable. Community care grants and crisis loans for general living expenses will be replaced by locally based support, which will be the responsibility of local authorities in England and the devolved Administrations in Scotland and Wales. That will deliver on the coalition’s commitment to implement the Calman commission’s recommendations and will tie in with the wider Government agenda on localism, as has been mentioned. Local authorities are better placed to understand the issues that people in their area face and to dovetail existing and needed services. Different areas face different issues and local authorities will be free to come up with the sort of innovative ideas that will address these issues and make sure that the money that is available is targeted at the right purposes so that we move away from a situation that allows the sort of abuse I have mentioned.

[Stephen Timms (East Ham) (Lab)]

We learned in Committee that although council tax is delegated to local authorities, investigations of fraud will be carried out nationally by the single fraud investigation service. The Minister has talked about abuse. In the case of the devolved social fund, where there is a worry about fraud will it be investigated by the local authority or by the single fraud investigation service?

[Maria Miller]

Local authorities will be free to consider whether they need to set up their own service locally or use the local government ombudsman. It really is for local authorities to look at the most effective way of dealing with levels of fraud or with any dissatisfaction with the way in which they are delivering services. The amendments do not really grasp the premise behind the Government’s proposals. We want to move to a situation in which local authorities are looking at the gaps in their services locally and are able to use the funding that is forthcoming as a result of these changes to fill those gaps and pull together the sort of service that is required by vulnerable groups such as those we have been discussing.

Crisis loans for alignment purposes and budgeting loans will be replaced by new national provision. As I have said, that accounts for half of all current crisis loan applications. That provision will be delivered nationally by the Department for Work and Pensions. The ending of the discretionary social fund and the implementation of replacement schemes, both nationally through payments on account and locally by local authorities and the devolved Administrations, is the best way to approach the reform. Amendments 53 and 54 would prevent those reforms from taking place and would leave us with an out-of-date and inefficient discretionary social fund scheme that would soon be unworkable with the introduction of the wider benefit reform we have already outlined.

14:28

Amendments 39 and 40 would impose criteria set by central Government on arrangements to replace the discretionary social fund if it were abolished. Some of the requirements in amendment 39 are activities that we are already undertaking in our work on the replacement of the discretionary social fund. Other elements in the amendment would not be helpful to what the reform of the social fund is trying to achieve. As I said, in some ways the amendment misses the point of the reform, which is that local authorities are better placed to understand the needs of their local communities and to make sure that the money is getting through to the right people for the right activities.

[Ms Buck]

Why does the Minister think that almost every specialist organisation, voluntary group and charity in the field thinks that that is a problem? Is it because they do not understand it?

[Maria Miller]

The hon. Lady will know that we have had a call for evidence, and we will be considering the many different views of the organisations she mentions. We will of course want to work with those organisations to make sure that our policies work well. I remember some confusion in Committee about whether we were talking about the social fund or the discretionary social fund, so perhaps we need to make sure that people really understand our policy. Empowering local organisations at local level—the sorts of organisations that the hon. Lady named—to work with vulnerable groups in the individual community will, I think, be welcomed by many organisations on the ground.

[Steve Baker (Wycombe) (Con)]

Does my hon. Friend share my slight puzzlement that the left seems to have abandoned the rich tradition of mutuality and self-help that was the foundation of the Labour movement? I am not hearing very much about that from the Opposition.

[Maria Miller]

I thank my hon. Friend for his intervention. I too was thinking about some of the speeches earlier this week; responsibility and empowering people are vital.

Amendment 39 misses the point when it proposes a pilot scheme to determine the feasibility of whatever scheme would replace the discretionary social fund. It would be impossible to run a pilot scheme for each local authority. We could run only a single pilot scheme, which would lead to our stifling any ideas local authorities might have about how to improve their local area. I hope that my experience of local authorities is no different from that of the hon. Member for Westminster North. They really understand their responsibilities to the most vulnerable groups in society and rather than deprioritising them, which is the inference from her comments, they are very much a priority. Those groups may not have a strong voice at the ballot box, but most councillors I meet are very motivated about getting the right support to them.

[John McDonnell]

I do not want to get drawn into discussions about blue Labour, and I understand the hon. Lady’s anxiety about almost flying against the localism agenda, but there is a mid-way point. Even if the Government are not looking at laying down criteria or guidelines, is there no thought that central Government could convene local authorities to explore best practice before the proposals are implemented?

[Maria Miller]

There have already been conversations with local government, and as I think Opposition Front Benchers hinted at, there was a broad welcome for the proposals. We shall certainly be working with local authorities to make sure that what happens is exactly what the hon. Gentleman was talking about; the spread of best practice will be critical.

The amendment seems to have taken no notice of the national provision of payments on account that DWP will provide under clause 98. Budgeting advances—the replacement scheme for social fund budgeting loans—will be very similar to budgeting loans, which have been hugely successful and largely self-financing. Budgeting advances will be targeted at those who are least likely to be able to access mainstream lending. That will help to ensure that vulnerable people are not driven to illegal lenders, which is rightly of concern to Opposition Members.

Short-term advances—the replacement scheme for interim payments and crisis loan alignment—will ensure that people who face financial need as a result of problems with their benefit claims will, if they are eligible, be able to access financial assistance through interest-free advances of their benefit. The grounds for eligibility will be set out clearly in regulations.

Another element of the amendment is a requirement for the Secretary of State to publish a proposal for a replacement scheme, based on wide consultation with stakeholders. We are already taking that approach in our discussions about replacement schemes. We will soon publish our response document to our call for evidence, which was based on wide consultation with lobby groups and local authorities. There will be a large amount of information and evidence for Members to consider.

The amendment requires local authorities to set up an independent appeals mechanism, but as I have already said, local authorities will be able to set up an internal review mechanism if they think it appropriate. Furthermore, the local government ombudsman offers a fair and impartial service for people who are dissatisfied with a decision made by their local authority.

In conclusion, the national scheme of payments on account and the local provision, as delivered by local authorities and the devolved Administrations, will provide well-considered replacements for the discretionary social fund, and will make sure that we are supporting more effectively than is currently the case the vulnerable individuals we have discussed today. With those reassurances, I hope Members feel it appropriate to withdraw their amendments, and we can press forward with the Bill.

[Yvonne Fovargue (Makerfield) (Lab)]

As we have heard, the discretionary social fund currently consists of budgeting loans for managed expenditure, crisis loans for emergencies and community care grants for essential household items such as cookers and beds for certain groups—for example, vulnerable people who are moving into new accommodation. The provision is national and acts as a safety net for benefit recipients facing essential expenditure they cannot meet.

It bears repeating that in 2009-10, there were 640,000 applications for community care grants and 3.64 million applications for crisis loans. That demonstrates the scale of the activity we are asking local authorities to take on. It is no small task, but it is absolutely vital to the financial well-being of many of the poorest and most vulnerable people in our society. Although an alignment scheme will be introduced—in effect, allowing advance payment of benefit—I have seen from experience how important it is that people can claim a community care grant, which does not have to be paid back, for their living expenses. It does not put people on the lowest possible income into debt. Without that, people will be driven into the arms of the high-cost lenders, which will reduce their chances of managing their debts successfully. That will put more strain on other services—for example, the health service—due to the increase of stress and depression caused by the cycle of low income and debt.

Proposals were outlined in 2011 to transfer to local authorities, with guidance, the funds currently used, but there will be no new statutory duty for how the money is to be used. It will not be ring-fenced. Local authorities have numerous calls on their expenditure at present, and without ring-fencing we cannot guarantee that the provision will go to those who are most in need. I envisage a number of different policies and that some vulnerable people will lose the right to apply for emergency support. They may be trapped between two local authorities with differing policies.

[Bill Esterson (Sefton Central) (Lab)]

My hon. Friend talks about the involvement of local authorities. Several of my constituents have contacted me about a situation that arose when the computer system in Sefton council’s housing office was down for six weeks. The staff advised my constituents to get crisis loans until the problem was fixed. I cannot understand how the Government’s proposals will make it possible for those staff to provide any kind of crisis support. Does my hon. Friend agree?

[Yvonne Fovargue]

I do. It is difficult for local authorities to provide a consistent service. As we have heard, people who are fleeing domestic violence will have an especially difficult time as they move from one local authority to another overnight. How will they be treated?

[Maria Miller]

I apologise for intervening on the hon. Lady, but may I clarify that people will be able to access that sort of money through payments on account, as I outlined?

[Yvonne Fovargue]

I shall return to the issue of domestic violence. Who will be the responsible authority? If people move overnight to interim accommodation, whose policies will prevail? There are problems at the moment with local authorities taking responsibility. I know of situations in which one local authority says, “These people can’t come back to us,” and the other says, “We don’t want to accept them.”

[Jeremy Corbyn (Islington North) (Lab)]

My hon. Friend makes an important point. This is a serious and acute problem in London. Given that the boroughs are geographically small, people who move at a time of crisis are not aware of what borough they are moving to and from, and the situation can be disastrous for their future housing options. Central Government direction is needed, and there must be complete ring-fencing and a statutory requirement on each local authority because otherwise the most vulnerable will be short-changed as a result of demands for expenditure—albeit understandable demands—in other areas of a local authority.

[Yvonne Fovargue]

I completely agree. The Government’s approach seems to be predicated on a view that local management will more accurately assess local people’s needs and use a range of local provision and services to support people in need, but that argument is flawed.

We have heard mention of credit unions and charitable support, as well as recycled furniture outlets and food banks. However, let me cite the example of an individual whose washing machine or cooker breaks down. They might be given a recycled product, but such goods are often much less energy-efficient than new goods, so that person will face higher fuel costs and will have no choice but to pay them with more of their low income. Such goods also lack a guarantee and have questionable reliability, so the approach might well be a false economy.

There is also a question of whether charities will be able to sustain continuing demand and, importantly, of whether the dignity of the individual will be adequately protected. I have heard many people—young and old—say, “I am not asking for charity. I do not want charity.” I fear that people will be deterred from applying to any scheme under which they will be referred to a charity and that they will therefore be forced into the hands of the high-cost lenders and credit companies.

[Oliver Heald (North East Hertfordshire) (Con)]

I might have misunderstood the hon. Lady, but is she really criticising the charities that provide such services? For example, councils for voluntary service provide excellent second-hand furniture facilities. These charities are not undignified, but offer an extremely worthwhile service through which they provide good quality goods at reasonable prices.

[Yvonne Fovargue]

I absolutely accept that, but some people do not want to be forced to use such charities as their only course of action. Vulnerable people on low incomes have a great sense of pride when claiming benefit. I absolutely believe that forcing individuals into the arms of charity will mean that they will instead go to high-cost lenders.

[Oliver Heald]

rose—

[Yvonne Fovargue]

I will not give way. I want to move on to the lack of an appeals process.

I regret the loss of the extremely useful digest published by the social fund commissioner that gave an overview of appeals and reviews. That was an invaluable tool for advisers. It assisted them to help their clients to obtain their rights consistently. Such consistency is extremely important. Without a universal scheme, it will be lost, so vulnerable claimants will be left with a patchy and inconsistent service. People might have a right of appeal or independent review but, depending on local authorities’ policies, one side of the street could well get a cash grant while the other side would be given advice about which charity to approach. In the context of homelessness, I have seen that one local authority’s interpretation of “advice and assistance” can be very different from that of the local authority that gives people a list of private landlords.

14:45

[Jeremy Corbyn]

I am glad that my hon. Friend brings up the issue of private landlords because the majority of the people about whom we are talking—certainly in London, but possibly in the rest of the country—tend to live in private rented accommodation, which is often unregistered and usually incredibly energy-inefficient, certainly compared with council and housing association accommodation and most owner-occupied properties. These people therefore face higher energy costs and their permanency of accommodation is more vulnerable. We need to take account of the fact that we will be throwing people into the most vulnerable housing sector of all those available.

[Yvonne Fovargue]

I agree. This is no way to treat vulnerable individuals who are trying to obtain life’s necessities. I urge hon. Members not to legislate for the Government’s proposals before a robust, effective and consistent alternative, with a proper right of appeal, has been fully explored.

[Priti Patel (Witham) (Con)]

One of the Bill’s underlying principles is that it focuses resources on those who are the most vulnerable and in need. It is also designed to reduce complexity and to make the delivery of welfare support more effective and efficient. Clause 69 satisfies those requirements. Localising the delivery of the social fund will clearly promote a more joined-up delivery of services and support.

[Oliver Heald]

Does my hon. Friend share my concern about the remarks made by the hon. Member for Makerfield (Yvonne Fovargue), who seemed to suggest that benefit claimants should be entitled as of right to buy all their furniture as new, rather than resorting to sensible and reasonably costed alternatives? What person who starts a new home does not have to buy a little bit of second-hand furniture?

[Priti Patel]

My hon. Friend is absolutely right. We are talking about taxpayers’ money, so we have to be resourceful.

I do not believe that Labour amendments 39 and 40 would make the delivery of the social fund more effective, and nor would they further support applicants and people in need. They would put additional bureaucratic burdens on the Government and risk delaying the implementation of the reforms. Amendments 53 and 54, which were tabled by the hon. Member for Hayes and Harlington (John McDonnell), would dogmatically block change by retaining the existing top-down system that is nowhere near as effective as we want it to be.

The hon. Member for Westminster North (Ms Buck) talked about several of the anomalies and dysfunctional problems in the social fund, as well as the National Audit Office’s criticism. Members of the Public Bill Committee know that the number of crisis loan applications has soared since 2006 from 1 million to 2.7 million, while more than 17,000 people have received crisis loans in the past 12 months. Given that such a significant number of people require multiple crisis loans, delivering the social fund locally will help to signpost them to support mechanisms, rather than encouraging the top-down approach that has been in place thus far. Many of the arguments put forward by Labour Members have been flawed and inaccurate, and I think that the amendments would be counter-productive to the Bill’s objectives.

[Ms Buck]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I do not think that the hon. Member for Witham (Priti Patel) is giving way; she has concluded her remarks.

[Jim Shannon]

I am not against the principle of welfare reform, but I am against how it affects those people who regularly come to see me. Not a week passes in the offices that I look after in which we do not see people who need crisis loans, and we hear from people who are under financial pressure all the time. With respect, I sometimes wonder whether some hon. Members have ever seen a social fund or crisis loan form. Do they know what it is like to be in financial crisis and under pressure?

I support the amendments for a number of reasons, and I hope they will be put to the vote. What happens in the House today will be sent to the Northern Ireland Assembly for its endorsement. On the principle of parity with the rest of the United Kingdom, I expect the Northern Ireland Assembly to endorse the decision of the House. The measure will then become the law for Northern Ireland as well. So if we feel concerned about it, we must oppose it here today. That is what the people I represent tell me.

Most of us are probably affluent enough to be able to borrow money from the bank if we are under financial pressure, but the people who come to me in my office seeking crisis loans through the social fund cannot do that. They do not have the option of the credit union either, because of the credit union methodology. I fully support credit unions. Everyone on the Opposition Benches who has a particular knowledge of credit unions would support them 100%, as we have in the past, but they are not an option for people in financial crisis, as the Government have suggested.

[Naomi Long]

Does the hon. Gentleman agree that part of the difficulty is that in circumstances where people’s finances are very stretched and they are very vulnerable, the crisis loan system stands between them and lenders with extortionate interest rates and loan sharks, which can impact not only on their financial welfare, but on their health and well-being more generally?

[Jim Shannon]

I thank the hon. Lady for her intervention. She clearly has cause to represent people in relation to social fund issues and has a good understanding of the financial crisis they face.

Many of the people who come to me in my office have health problems. If they are unable to work, possibly because of an injury at work or an accident at home, they are left facing a financial crisis. Intimidation is not rife in Northern Ireland and nowhere else; it happens in other parts of the United Kingdom as well, and there are occasions when someone has to leave home quickly, and they face financial crisis. Most of those who come to me are single people, maybe a single parent with a young child, or sometimes they are people coming out of care or out of prison, or people who have experienced family break-ups.

The hon. Member for Makerfield (Yvonne Fovargue) described the situation well, and I share her experiences as a representative. Those people are under great financial pressure and are worried about where they are going to go. They look for alternatives to borrowing money. Sometimes, as a result of their inability to pay back their loans on time, they end up in hospital. Loan sharks are probably the only people willing to lend them money but at an extortionate rate, which puts them under great pressure. I am sure other hon. Members have seen that.

[Mark Durkan (Foyle) (SDLP)]

Is my colleague, like me, at a loss to understand how some hon. Members who are prepared to commend the social fund measures are the same people who, in relation to parliamentary expenses, argue for the operational principles of clarity, predictability, responsiveness, consistency and the right to query or appeal? They demand those operational principles where it affects themselves, but they are prepared to mangle them where they affect their most marginal constituents when it comes to the social fund.

[Jim Shannon]

I thank the hon. Gentleman for his passion and his commitment. I would find it difficult to argue against those points. I should like to hear from the Minister what measures the Government intend to put in place to ensure that the people whom I have described—the single people facing financial problems or those experiencing health problems, marital break-ups or intimidation, who clearly have problems at home—will fit into the system. I do not see that they will. I see extreme difficulties for them in future.

The hon. Lady spoke about those managing debt. Not everybody has the ability to manage their financial circumstances. We meet people in my office who unfortunately fit into that category. We try to advise them or send them to someone who can give them advice and help, but in many cases they are unable to manage their financial circumstances. The crisis loan enables them to borrow and get out of the crisis that they face, and agreeing a direct debit helps them to manage their money.

For those who come to me in financial crisis, the crisis loan is their only way out. I would love to be the Northern bank or the Ulster bank and be able to lend all those people money personally, but unfortunately my resources do not go that far and it is not my responsibility to do that singly and individually. That is the responsibility of Government.

[Bill Esterson]

The hon. Gentleman makes a strong case for his concerns about the loan system. What worries me, reading the clause, are the references to discretion and appropriate decisions by the Treasury about what does or does not constitute grounds for payment on account. A constituent who came to me was denied employment support allowance and was told that he was fit for work. When he went to the jobcentre, he did not qualify. That person needed three separate crisis loans. The point about managing debt is well made. The issue of appropriateness will cause huge problems.

[Jim Shannon]

I thank the hon. Gentleman for his comments. Many Members in all parts of the House know how the system works and the importance of a crisis loan system operating through the social fund.

My final point relates to the appeals system. The proposed changes will do away with the independent appeals system or at least make it unnecessary. I fought a number of appeals for people who had applied for crisis loans through the social fund. Having the appeals system in place is critical. If they are turned down the first time, it may be because they provided the wrong information, or because all the necessary information was not available. An appeals system allows a review to take place. It is crucial that the independent appeals system is retained.

The system of crisis loans through the social fund is a crucial aspect of life in Britain today for the people who come to my office and for those I meet. It gives people hope and an opportunity to get out of sometimes dire financial circumstances. The Government, the House and we as elected representatives have a duty to make sure that the social fund and the crisis loan are retained.

[Bridget Phillipson]

I am grateful for the opportunity to speak to this important group of amendments concerning the discretionary social fund, particularly amendment 39, which calls on the Government to bring forward detailed proposals for the replacement scheme.

Discretionary social fund payments, such as crisis loans and community care grants, provide an essential safety net for some of the most vulnerable people in our communities who, at times of extreme hardship or disadvantage, need financial support. One such group I wish to talk about in detail are women fleeing domestic violence who, through no fault of their own, are forced out of their own homes and have to seek shelter elsewhere. It is because of my experience working with women affected by domestic violence and their families that I am so concerned about the Government’s proposals and what they could mean for those women.

A woman fleeing domestic violence often must leave her home with nothing more that the clothes she is standing in, without money or access to money, but she still needs access to vital items for herself and her children, from food and nappies to children’s clothing. The social fund provides a vital lifeline for those women. Although far from perfect—I admit its shortcomings—it gives reassurance to the woman that help is available should she need it so that she does not feel pressured to return home to violence simple because she has no access to money. Community care grants allow women to start afresh, with a new life and a new home, by covering some of the costs attached, such as a washing machine or a cooker.

15:00

At present, clear guidance operates for decision makers, with clear processes in place if the individual is unhappy and wishes to challenge a decision, but the Government’s proposals will shift those responsibilities to local authorities and are deeply concerning on a number of levels. There is little reassurance that an adequate service will be provided or that the quality of service and the appeals process will not differ greatly across the country from council to council. The Government say that local authorities will be open to scrutiny at local level, and to a degree that is true, but I simply do not feel confident that vulnerable and excluded groups, such as women fleeing domestic violence, will be able to make their voices heard in those circumstances.

As I indicated when I intervened on the Minister, those women are often not on the electoral register and cannot cast a vote, so at the most basic level there is a lack of democratic accountability. I am sure we all hope that local councillors and councils would take due notice of those groups regardless, but the realities of life mean that if those women are unable to vote, as is the case for the vast majority who are forced to move to a women’s refuge, they are denied an important opportunity to affect local decision making.

Skilled and experienced professionals in the Department for Work and Pensions currently administer the discretionary social fund, but it is not clear who will take on that role within local authorities. That will present a significant capacity problem for local authorities that are already stretched in the current financial climate. The Government have not set out minimum standards and levels of service that they expect councils to adhere to. How will individuals access the replaced discretionary social fund, and where? What time scales can they expect for decisions? We might end up with significant variation between councils, whereas at present we have a clear national scheme. I do not believe that we have had clarity from Ministers on local eligibility.

[Ian Paisley]

The point that the hon. Lady is making is critical. A local authority might lay down a policy on this matter that is very good, but if another authority then does something slightly different that appears to be better, automatically all the good work that the first local authority has done will be seen as of no use as it will be held to another standard. We must have a single national standard so that people who require this fund, whether in Bushmills or Birmingham, know that they will see the same standard, with the same requirements, the same grant and the same opportunity to avail themselves of that assistance.

[Bridget Phillipson]

I agree entirely. It is vital that people feel that appropriate safeguards are in place with a national scheme and a national appeals system so that when things go wrong, as they sometimes do, there is an appropriate means of redress and decisions can be looked at again.

My concern with the Government’s proposals is that we will end up with massive variation between councils and between different parts of the United Kingdom, which will disadvantage people in certain areas. Some councils might choose a system that works very effectively and addresses the needs of vulnerable groups, but others might not do that so well. That is why the Government must be very clear about the standards that they will demand of local authorities, but they are not being clear.

Women fleeing domestic violence are often forced out of their local area in order to seek safety, so what safeguards can we expect when a woman is forced to move to an area where the local council might decide that she is ineligible for support? In the urban areas of the north-east, where large local authorities cover small geographical areas, it is not a great distance from Gateshead to Sunderland, but might the local authority in Sunderland, for example, take the view that the woman should seek support from her local authority in Gateshead? I sincerely hope that it would not take such a view, as that could hold up the process when the woman desperately needs financial help. This is not a factor at present because the scheme is a national one, but devolving responsibility to local councils will create a raft of potential problems for those councils and risk placing some very vulnerable people at risk of harm.

It is simply not good enough for the Government to hope that local councils will be able to manage this complex change. With a budget that is not ring-fenced and the potential for a reduced level of funding from recovered grants, it is inevitable that some local councils will not want to take people without a clear and established local connection, which I believe will be particularly damaging for women fleeing domestic violence if this is not done properly. That is why it is imperative that the Government set out detailed proposals, as amendment 39 makes clear, including eligibility criteria and an independent appeals mechanism. Without further clarity and detail, there is a real likelihood that some of the most vulnerable people in our communities will be unable to access financial support when they need it most.

[John McDonnell]

I will not delay the House any further because I think that colleagues from all Opposition parties have demonstrated why they are not convinced by the Government’s proposals, and why every charity and housing group in the country is not convinced either. Members’ surgeries will fill up as people can no longer receive grants and loans, so it is inevitable that we will return to the issue at a later date to reform the Government’s reforms. I will not push for two Divisions on this group and, on the basis of supporting amendment 39, beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: 39, page 52, line 22, leave out subsection (1) and insert—

‘(1) Section 138(1)(b) of the Social Security Contributions and Benefits Act 1992 (discretionary payments out of Social Fund) may be repealed, if the Secretary of State—

(a) publishes a detailed proposal for a replacement scheme, or schemes, based on wide consultation with relevant stakeholders;

(b) ensures that such a scheme, or schemes, will provide financial protection for applicants in an emergency or crisis, with the eligibility criteria for applicants specified in regulations;

(c) demonstrates the feasibility of such a scheme, or schemes, through a pilot or pathfinder process; and

(d) demonstrates how an independent appeals mechanism will be implemented.’.—(Ms Buck.)

Question put, That the amendment be made.

15:06

Division 294

Ayes: 237

---

Labour: 219
Democratic Unionist Party: 6
Scottish National Party: 5
Plaid Cymru: 2
Independent: 2
Social Democratic & Labour Party: 1
Alliance: 1
Green Party: 1

Noes: 300

---

Conservative: 259
Liberal Democrat: 39

Clause 74

State pension credit: capital limit

Amendment made: 19, page 54, line 15, clause 74, at end insert—

‘( ) In section 19 of that Act (regulations and orders), in subsection (2), before paragraph (a) there is inserted—

“(za) section 1(2)(d),”.’—(Maria Miller.)

[Sir Peter Bottomley (Worthing West) (Con)]

On a point of order, Mr Deputy Speaker. We now come to a sensible grouping of amendments, to be considered together, on the personal independence payment. The first, amendment 43, refers to clause 78, but amendments 41 and 42 refer to clause 83, which is about a rather separate issue, so I hope that the Chair will take into account the progress of the debate in order to decide whether to allow a vote, if necessary, on amendments 41 and 42.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

We will see how the debate goes, and I am sure that we will look favourably upon the issue when we get there.

Clause 78

Ability to carry out daily living activities or mobility activities

[Margaret Curran (Glasgow East) (Lab)]

I beg to move amendment 43, page 56, line 40, at end insert—

‘(7) Regulations shall exempt people with prescribed medical conditions from the requirement in subsection (4)(c), including in prescribed circumstances where the individual is—

(a) severely mentally impaired;

(b) a double amputee;

(c) deaf/blind;

(d) undergoing haemodialysis;

(e) severely visually impaired; and/or

(f) meets the requirements of special rules set out in Clause 80.’.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

Amendment 76, in clause 79, page 56, line 45, leave out ‘as respects every time’ and insert

‘as regularly as their disabling condition occurs’.

Amendment 44, page 56, line 45, leave out ‘6’ and insert ‘3’.

Amendment 77, page 57, line 3, leave out ‘as respects every time’ and insert

‘as regularly as their disabling condition occurs’.

Amendment 45, page 57, line 3, leave out ‘6’ and insert ‘9’.

Amendment 46, page 57, line 15, leave out from ‘previous’ to second ‘months’ and insert

‘3 months means the 3’.

Amendment 47, page 57, line 17, leave out from ‘next’ to second ‘months’ and insert

‘9 months means the 9’.

Amendment 66, in clause 83, page 58, line 34, leave out ‘meets the condition in subsection (2)’ and insert

‘is an inpatient of a hospital’.

Amendment 41, page 58, line 35, leave out ‘2’ and insert ‘3’.

Amendment 42, page 58, line 40, at beginning insert—

‘(3) The condition is that the person is an in-patient of a hospital.

(4) ’.

Amendment 73, in clause 86, page 59, line 35, at end insert—

‘(3) The Secretary of State must lay before Parliament a report on the impact of regulations made under section 83 within 12 months of the regulations being laid before Parliament.’.

Amendment 60, in schedule 10, page 140, line 25, at end insert—

‘(3) The Secretary of State shall ensure that, in respect of any person whose award of disability living allowance is terminated on or after the appointed day, an award of personal independence payment is made without application, and that said award is not subject to the requirements of assessment in section 78(3) or (4), or subsection (2) of this section, until:

(a) The Secretary of State has commissioned an independent report, no less than six months after the appointed day, on the effectiveness of the assessment process as used on new applicants for personal independence payment, and;

(b) The Secretary of State has satisfied himself, having consulted with disabled people, that the assessment process is functioning correctly.’.

Amendment 74, in clause 91, page 61, line 13, at end insert—

‘(c) the first regulations under section 83 containing provisions about the payment of the mobility component of personal independence payments to residents of a care home.’.

[Margaret Curran]

We have reached a vital stage in our consideration of the Bill. Government proposals for the reform of benefits for disabled people have been mired in controversy and bogged down by issues that the Government have failed to address, and they have alienated many organisations of and for disabled people. Sadly, instead of listening to and attempting to understand those concerns, the Government have dismissed them and undermined the traction that they command throughout the country. So much for the new politics! Instead of continuing the previous policy and the new approach of co-production practised with care and consideration by my right hon. Friend the Member for Stirling (Mrs McGuire) when she was the Minister with responsibility for disabled people, the Under-Secretary has been steadfast in her refusal to appreciate the issues brought to her, which I will detail. I fear that her approach has alienated the voices for reform in the disability movement and in this House. As a result, we are debating a huge missed opportunity for meaningful reform. However, we are where we are, and we will debate the proposals before us and our amendments to improve them.

Let me say a few words to provide some context. Although disability living allowance is a much respected and much valued benefit, it was designed in a different time, well before measures such as the Disability Discrimination Act 2005 and the Equality Act 2010, which were introduced by the last Labour Government and which have profoundly changed the way in which disabled people participate and are recognised in society today. I acknowledge that the application procedure to make a new DLA claim—the process of self-assessment whereby somebody has to fill out a long, and at times complicated, form—is not one that many people believe to be suitable in a modern welfare state. We therefore believe, and have said consistently throughout our deliberations, that it is right to reform DLA. We welcome the Government’s decision to keep DLA as a non-means-tested, in-work benefit, and we think it is right to introduce a new, objective gateway.

Notwithstanding that, we feel that this Government have made profound mistakes and have missed opportunities in their approach to DLA reform. The whole process was kick-started by a rushed consultation. Apparently, according to the DWP website, it was one of the biggest of its kind, yet despite all those representations it yielded very few changes following the introduction of the Bill. The consultation was carried out over the Christmas and new period and was cut short. Perhaps most disappointingly of all, the Government chose to publish their proposals before it had even closed. No wonder this Minister, in particular, has a reputation for not listening. She will know that charities and the disabled people whom they represent have been highly critical of the process of reform. It did not have to be like that, and it is very disappointing that the Government did not undertake more groundwork to ensure that key stakeholders were a key part of the reform process.

While we take issue with the process of reform, we also have major concerns about its substance, and that will be the focus of my remarks. We now know that universal credit will halve support for disabled children and take away the severe disability premium for disabled people who live alone without a carer, yet put nothing appropriate in its place. Furthermore, part 4 outlines details of the new personal independence payment, with proposals to make disabled people wait half a year before they receive support and to take away the right of automatic entitlement for those with severely disabling conditions. The proposals are plainly chaotic and confused as regards the future of DLA mobility component for those in residential care homes.

[Fiona O’Donnell (East Lothian) (Lab)]

My hon. Friend has referred to the Government not listening and not understanding. Does she share my utter dismay at what the Prime Minister said at Prime Minister’s questions, when, on at least four occasions, he failed to acknowledge and understand what the Bill means, or even to see the difference between those who are terminally ill and those with cancer?

[Margaret Curran]

I could not agree more. It was staggering how ill-informed the Prime Minister seemed to be about the impact that the Bill will have on cancer patients. I will make reference to further experiences that cancer victims will have as a result of these proposals. There is worse news for them, as we will find out.

Our amendments seek to put right the wrongs in the Bill. They would make the personal independence payment a fairer, more effective and more workable component of welfare reform. That is incredibly important given the scale of the reform, with 1.8 million working-age people being assessed in just three short years. Let me begin with one of the most controversial elements of the Government’s proposals and explain the key arguments behind our amendments to clause 83, which deals with the mobility component for those in residential care homes. That policy has attracted much attention and has been the subject of much debate inside and outside the House, yet the Government’s position remains, I am sorry to say, far from clear.

The blanket cut to those living in residential care was first announced by the Chancellor in the comprehensive spending review: it is there on page 12 of the documentation that I have here beside me. For the record, that position has not changed. The cut was in the first Budget document, and it remains in today’s Budget document. Granted, it has been delayed by six months, but it is still there. The proposal was met with an outcry from disabled people, disability organisations and the Opposition. Where was the Government’s much vaunted compassionate welfare reform? Why single out this particular group? Why select perhaps one of the most vulnerable sections of society? We have heard much talk of reviews and overlaps, but let there be no mistake—unless clause 83 is amended, people living in residential care homes can have their DLA mobility taken away from them.

Let me draw to the attention of Members who may be thinking about how they will vote a briefing submitted by several charitable organisations, which says that while the Government are no longer planning to remove DLA mobility from people living in residential care, they are planning to remove PIP mobility. Members should be careful to remember that if the Government say they are not removing DLA mobility, the Bill as it stands will remove PIP mobility.

[Duncan Hames (Chippenham) (LD)]

I accept the hon. Lady’s observations about the confusion over the Government’s intentions. I think she just said that the Bill will remove PIP mobility. Is it not the case that the Government could bring forward regulations to remove PIP mobility? What we have to determine this afternoon, and what I hope Ministers will give us assurances on, is whether that is the Government’s intention.

[Margaret Curran]

I thank the hon. Gentleman for his comments. I know that he takes a great interest in this matter. That is exactly the point I am about to address. Our purpose this afternoon is to prohibit the Government from ever taking away PIP mobility from those in residential care. I hope that I can win his support, because I know that he has a genuine interest in this matter. I hope he bears with me, and I will gladly allow him to intervene again.

[Sir Peter Bottomley]

Just to put it in plain English, are we agreed across the House that the mobility allowance, as it used to be called, should be available to people who happen to live in a residential home, rather than in their own home, whether their home is within a residential home or they are living in a block with others?

[Margaret Curran]

Yes, that is what we agree on. Our amendments would ensure that the Government do not have a blanket power to remove PIP mobility from people because they live in residential care. If Members agree with me, they should vote for our amendments. I will go through the arguments again, and hopefully that point will be clear.

[Ian Paisley]

Does the hon. Lady agree that what will be foisted on people tonight if we are not careful is a sleight of hand whereby, from March 2013, people will be moved across duplicitously from DLA to PIP, and then PIP will be withdrawn? Of course, DLA will not be withdrawn because it no longer exists. That sleight of hand should be rejected outright by this House.

15:30

[Margaret Curran]

This is getting embarrassing because, again, I could not agree with the hon. Gentleman more. He made the point perfectly. I commend him because he too takes a strong interest in this matter and has argued passionately for his constituents.

Unlike the Government’s position on DLA mobility for those in residential care homes, Labour’s position is crystal clear, as are our amendments. The Government must not remove DLA mobility for those in residential care and must delete the part of clause 83 that sets out to do just that. When I say “DLA mobility” throughout my remarks, I also mean as it applies to PIP mobility.

There have been many warm words from the Minister on the Government’s plans on DLA mobility, but they come as little reassurance to disabled people when they realise that absolutely nothing has changed since the cut was announced. The clause remains unamended and the cut remains in the Budget book. Some 80,000 disabled people continue to be under threat of losing out at the hands of this Government. Warm words, yes; a change in policy, no.

When justifying this cut, the Minister explains that it is about removing the overlap in provision. She has described a situation of chaos in the residential care sector in relation to this benefit, but hon. Members and charities have heard little or no evidence to substantiate that claim. Furthermore, she knows as well as we do that she does not need clause 83 to remove any overlap there might be in the provision of services to support the mobility and transport needs of care home residents. She already has the power to set new eligibility criteria. Such criteria could remove any overlap in funding or inconsistency in practice and ensure that the mobility component of DLA is used appropriately—I presume that that is the reason for her concerns about overlap. If care homes or local authorities are using the mobility component in a way that is not appropriate, she should address it head-on with the care homes and local authorities.

[Bill Esterson]

My hon. Friend is making an extremely good case. One of my constituents has said that if the mobility component of DLA is taken away, it

“will make a prison of my son’s care home”.

A wider issue that has been raised by many constituents is that people may be in care for many years with considerable mobility needs and that the care home needs the extra resources to get them beyond the front door.

[Margaret Curran]

I thank my hon. Friend for drawing our attention to his constituents’ concerns. I am sure that he, and all Members, will bear that experience in mind when we vote this afternoon. I appeal to Members to consider the significant needs of people who live in care homes. That should direct us in how we vote.

[Mark Durkan]

Does the hon. Lady agree that many people will be perturbed and confused by the fact that the Government are derelict on the real crisis affecting care homes in funding, ownership and stability, but are diligent in trying to claw back the pittance that some people in those care homes receive, based on the myth that there is some financial West Lothian question whereby people are being paid out of one fund and also getting money out of another?

[Margaret Curran]

The hon. Gentleman makes his point with great passion. We must bear in mind the context in which this decision is being taken and the scale of resource that is involved. I have to say to him that we have found no evidence of great concerns about the practice of care homes and local authorities on the matter. The Minister has not presented any such evidence to us or to charities, and we cannot see where the great worry or cause for concern is.

[George Hollingbery]

I have just a small point. I think I heard the hon. Member for North Antrim (Ian Paisley) say that PIP was being withdrawn after the change from DLA. I believe the hon. Lady will confirm that we are talking about the mobility component, not PIP in its entirety.

[Margaret Curran]

If I made that mistake, I am very grateful for the opportunity to correct it. We are talking about the mobility component of DLA, which will be transferred to PIP. I will come on to broader concerns about PIP later, but I thank the hon. Gentleman.

I was talking about how the Government are addressing the issue of overlap and introducing a review. I assume that part of their concern is the need for greater consistency in how funding for people who live in residential care is arranged. I put it to the Minister directly that if there needs to be greater consistency in how the transport and wider mobility needs of residents are addressed, she should issue the appropriate guidelines to care homes. Whatever she chooses to do to address the matter, it is plainly wrong and irresponsible to make victims of the residents themselves by the blanket withdrawal of a benefit to which they are legitimately entitled.

The core of the argument, which should determine how we vote today, is that the power in clause 83 is necessary only if the Government want to remove payments solely on the basis that someone lives in a residential care home. If that is not the aim, we need to change the Bill.

[Stephen Lloyd (Eastbourne) (LD)]

On that point, does the hon. Lady agree that under article 20 of the UN convention on the rights of persons with disabilities, on personal mobility, and article 31 of the UN convention on the rights of the child, removing the mobility component from children in residential homes may amount to a breach of the UK’s obligations in human rights conventions?

[Margaret Curran]

That is a very interesting observation, and I thank the hon. Gentleman for drawing it to the House’s attention. I know that he takes a great interest in these matters. That point gives us even more reason to argue that Members should support the amendments—they would avoid any problem of that nature.

When the Minister is not talking about “overlap” in an attempt to address the problem in question, she is talking about the need for a review. It was promised that the review, first announced earlier this year, would look into the provision of DLA mobility to those in residential care homes, which I know offered some succour to Members who were concerned about the matter. Labour Members were mildly optimistic that that was a signal that the Government were undertaking a rethink, as we know they are prepared to do when the time is right. However, we have been sadly disappointed. Although a review was launched, it has no time scale, there are no terms of reference, no review group has been established and there is no involvement for disabled people. No wonder people are confused about where the policy stands.

I remind the House that at Prime Minister’s questions on 23 March, the Prime Minister offered the Leader of the Opposition an opportunity to contribute to the review. I do not think that possibility actually exists. Have the terms of reference of the review been made public? No. Will the findings be published? No. This is not a review, it is, as the hon. Member for North Antrim (Ian Paisley) said, a delaying tactic to cover up a deeply flawed policy. In my wilder moments I thought it was perhaps an appeasement of some Liberal Democrat Members, because we know that their party conference overwhelmingly passed a resolution condemning the policy. The Liberal Democrats in Committee disappeared when the matter was voted on. They are here today, so I hope they will join us and help to defeat this particularly pernicious part of the Bill. I appeal to them to make their presence felt today in a way that they did not in Committee.

[Ian Paisley]

Does the hon. Lady agree that throughout all of this—no matter how it is dressed up or how Opposition Members are criticised—the policy is about doing one, well named thing? It is about making the pips squeak among the most vulnerable in our country. That is another reason why it should be opposed.

[Margaret Curran]

This is embarrassing, because hon. Members are putting the argument so much more effectively than I am.

To conclude on this section of my contribution, may I make an appeal to Members of the House? We have a moment in time. We are being watched by disabled people this afternoon, and by their organisations. This goes to the heart of what we are about. People will be prisoners in residential care and prisoners in their own homes if this provision is removed from them. Many opportunities for them will also be withdrawn. I appeal to hon. Members: let us do the right thing this evening and vote for amendment 43—I also intend, Mr Deputy Speaker, to press amendments 42 and 44 to a Division when the time comes.

I shall now discuss specific aspects of the personal independence payment that should be changed to make the new benefit fairer and more effective in giving support to those who need it, and to assist a smooth transition for existing claimants to the new benefit. Amendments 44 to 47 seek to amend clause 79 and the proposed change to the required period condition for PIP. The amendments would retain the three-month period that claimants must wait before they are eligible to receive PIP, but would extend the period over which a claimant must show that they will be with that disability from six months, as is currently the case with DLA, to nine months.

In other words, for those who have not followed every single detail of the Bill like those of us who served in Committee, like the Government intend, the Opposition would extend the current DLA required condition period from nine months to one year for PIP. However, the Opposition would extend the provision after receipt of the benefit, not at the beginning. To do otherwise would be to penalise unfairly those disabled people who need extra help associated with their disability early in their treatment.

Yet again, there is some confusion about the rationale behind the change in the waiting time for PIP. In Committee, the Minister said that the change was categorically not about savings. She clearly stated:

“I will be honest and open with my answer. I would like to reassure the hon. Lady”—

meaning me—

“that the principal aim of extending the qualifying period from three to six months is not about savings. We do not expect the measure to provide any significant savings.”––[Official Report, Welfare Reform Public Bill Committee, 10 May 2011; c. 848.]

Furthermore, I have asked the Minister in a series of written parliamentary questions what the projected savings are. Again, her Department was unable to provide any sort of answer—nor do its answers so much as allude to potential savings resulting from this policy decision—yet at Department for Work and Pensions questions on Monday, the Minister appeared to backtrack, stating that “modest” savings were now part of the reasoning for pushing ahead with the change. In her response today, will she indicate the scale of those modest savings? It is a little concerning that the rationale behind changes that will make such a big difference to the lives of many disabled people in this country is, even at this late stage, being cobbled together by the Government.

If we cannot comment on savings from the policy, we can at least discuss its impact on disabled people who require PIP to help them to meet extra costs associated with their disability. In Committee, we discussed in great detail the different conditions that are likely to require early support, so I will not go into them in great depth today unless pushed to do so.

[Jim Shannon]

The hon. Lady has clearly outlined the issues in relation to the qualifying period. Is she aware, as many in the House are, that for people in poor health, it is a time of stress and anxiety? The Government are talking about increasing the qualifying period when people are under the most pressure regarding their health, so putting them under additional, financial pressure. Does she feel that such financial pressure will impact on people’s health at a time when they need less pressure and more help?

15:44

[Margaret Curran]

The hon. Gentleman makes a very strong point. The Macmillan cancer charity, which has already had an airing in the Chamber today, makes strong representations about the impact that financial worries can have on health, including leading to a deterioration in health. It is therefore especially pernicious that the Government have come forward with this policy. Cancer and stroke victims will suffer severely from this, because they can have major changes in costs very early in their conditions. Cancer and stroke victims may not be terminal, but they can still have great needs and society needs to support them in working through the terrible and difficult circumstances they are experiencing.

[Fiona O’Donnell]

Does my hon. Friend agree that this is about more than the entitlement to DLA or PIP: it is about all the other benefits that that triggers, including carer’s allowance so that a whole family can be supported through that difficult time?

[Margaret Curran]

Indeed, and for those of us who have experience of how families struggle through family illness on lower incomes, we know how important that is. We do not want to have a society in which people who are struggling with major illnesses have to worry about how they will meet their family bills.

Cancer and stroke victims usually require help early in their conditions. As of August 2010, some 195,000 people were receiving DLA for a malignant disease or a stroke-related condition. Many in this group who are of working age may well be the very individuals who will be affected by clause 79 and the decision to lengthen the qualifying period to six months.

The extra costs will vary from individual to individual, but we can safely assume that they include key criteria such as extra fuel costs, costs associated with aids, adaptations and special diets, and extra costs of washing clothes and such like.

[Dame Anne Begg (Aberdeen South) (Lab)]

On the issue of extra fuel costs, one reason why the last Government—followed by this Government—said that they would not extend the winter fuel payment to those with disabilities was that it was already covered in the payments received under DLA. If the people who move on to PIP do not get those payments, they will be disadvantaged.

[Margaret Curran]

I thank my hon. Friend for that point, which reinforces why we should not accept the Government’s proposals and instead vote for this amendment. Simply to shrug aside the points that have been made or—as I suspect the Minister will argue—to pass on the obligation for meeting these costs to local authorities that are already feeling the strain of funding would be unfair and a great insult to many victims. Cancer patients are already the victims of the decision to time-limit the contributory employment and support allowance to just one year, as the Prime Minister now understands. Why should they be punished yet again at the hands of this Government when it comes to reforming DLA? We had controversy this morning about how cancer patients are being treated by this Government and now we have more concerns and more difficulties for cancer patients.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

As it is carers week, it is also important to remember that when someone is having treatment in a hospital that may be some distance from home, there is also an impact on family members, who end up taking time off work and have to pay high travel costs. That has an impact on the whole family’s income, not just the person who is suffering the illness.

[Margaret Curran]

Indeed, and there is often an impact on the wider family, not just the immediate family.

We believe that the Government are misguided in their decision to lengthen the time disabled people must wait before they are given support. The Government are also wrong to remove automatic entitlement for certain severely disabled people who currently have the automatic right to receive the higher rate of DLA. At the moment, the severely mentally impaired—that is the language that is used—double amputees and those who are deaf-blind, undergoing haemodialysis or are severely visually impaired are automatically able to receive higher rates of DLA. Under the Bill, however, only those with a terminal illness will automatically receive PIP. Obviously I welcome the Government’s commitment to protect the terminally ill, but we believe that this obligation does not go far enough. Amendment 43 would ensure that those with a severely disabling condition, who are currently eligible for automatic entitlement, would retain that right following the introduction of PIPs.

It is important that we keep in mind the group of people whom we are talking about in the amendment. Is the Minister planning to inform the House today that an individual who is severely mentally impaired or a double amputee might not now be eligible for the higher rate of PIP? That would be quite an announcement. What reason is there to force this group of severely disabled people to undergo an assessment process of which we can all safely predict the outcome? We now know that the Government plan to spend £675 million on establishing PIP, on the bureaucracy of PIP and on the reassessment of 1.8 million working-age recipients of disability living allowance.

[Jeremy Corbyn]

Does my hon. Friend have estimates of the cost of each of these interviews that will have to take place; of how many will be unnecessary; of how many will be appealed successfully; and of the incredible stress and hardship through which individuals will be put while knowing full well that unfortunately they can never get a job or go to work, and that they will have to be in receipt of benefits in the future?

[Margaret Curran]

I am afraid that I do not have specific numbers to hand, but I will make it my business to get that information because it would be very interesting. I am sure that some organisations could help us estimate those numbers and the different categories that my hon. Friend highlighted. He outlined a common-sense approach. It makes no sense to put these people through this stress, or to add to the bureaucratic costs of administering the process, when that money should be going to the disabled people themselves.

In a time of economic restraint, I am sure that everyone on both sides of the House agrees that this is a huge amount of money to spend on administration, so we should consider opportunities to reduce the costs. It is absurd to propose reassessing conditions that will clearly be eligible for the new PIPs. I have asked how much it will cost, and I will try to get answers—perhaps the Minister can give them in her reply. If the argument for retaining automatic entitlement is rooted in the avoidance of needless assessment, it is also grounded in the goal of appeasing the anxiety of many disabled people about having to undergo reassessment for PIP eligibility. As I am sure my hon. Friend the Member for Islington North (Jeremy Corbyn) knows, one of the biggest concerns disabled people tell us about is the constant reassessments they have to undergo, despite it being obvious to everybody that they have a disability. They are needless assessments.

[Mark Tami (Alyn and Deeside) (Lab)]

Does my hon. Friend agree that problems are also created by the period disabled people have to wait before an assessment and the consequent stress and worry? They read newspapers that convince them they are not going to get the benefit, and their overall state worsens as a result of this whole exercise.

[Margaret Curran]

Yes, absolutely, and we have an opportunity here to minimise that stress and to address the problems. I strongly believe that we should take that opportunity.

[Mark Durkan]

Does the hon. Lady recognise that many people are concerned that as the costs of administering the assessments emerge and escalate, they will be met not by scaling back the arrangements, but by tightening the criteria and reducing the benefits awarded?

[Margaret Curran]

I acknowledge that many disabled people and disability organisations are extremely concerned about that, given the Government’s track record on this. We cannot underestimate or brush aside the level of anxiety of many people in this country about the reform of DLA. Many people find incredibly stressful and worrying the prospect of having to go through a new face-to-face assessment to prove their disability, despite it being abundantly clear, in order to receive help.

It is the Government’s job to assure disabled people that the introduction of PIPs—I know that the Minister tries to do this—will not mean the end of financial support for disabled people. Given the Minister’s efforts on that, I plead with the Government to go that extra mile to assure disabled people that the process is about meaningful reform of an important benefit, rather than an attempt to remove it from those whom they can get away with removing it from. One way the Government can do that is by ensuring that the most severely disabled members of our society do not face needless upheaval and uncertainty over the future of support following the introduction of PIPs.

[Stephen Lloyd]

I understand where the hon. Lady is coming from, but does she agree that the Government have made good progress by bringing in Professor Harrington to ensure that the test—which, to be honest, we inherited from the previous Government—is improved?

[Margaret Curran]

That test was introduced for the work capability assessment and the application of employment and support allowance, as the hon. Gentleman knows. Of course I acknowledge that the Minister is working with disabled people to try to ensure that the test is as effective as it can be, but I have to tell the hon. Gentleman and the Minister that most disabled people are saying that they are not satisfied. I do not think that reassurances have been given that the test is right yet. None the less, what I am talking about in this debate is automatic entitlement, which is a different issue. Even if the test were perfect, which would be very hard to achieve—we are very far from that—putting people through needless assessments, all at a cost, would still not be worth it when they are clearly disabled. Retaining automatic entitlement for severely disabled people would be a small step, but would enable the Government to send out an important signal to show that they are listening and that they get some of this. The big cry coming from disabled people is that there has been no shift from the Government and no signals, and that they do not get it.

Amendment 60, which is our final amendment in the group, would ensure that the process of reassessment will result in an orderly, careful and efficient transition for working-age claimants. As I have said before, we need to keep in mind the scale of the exercise that the Government are proposing to undertake. We are talking about reassessing 1.8 million working-age people on DLA in the space of just three years. To meet that goal, the Government would need to reassess—I can assure my hon. Friend the Member for Islington North that I do have the figures for this—roughly 600,000 people, which is 11,500 people a week or more than 2,000 a day. That is the scale of the process that disabled people will have to go through.

Given the scale and depth of concern about this issue, our amendment 60 proposes that checks and balances be written into the Bill to ensure that lessons are learnt as reform develops—we have tried to learn some of those lessons ourselves—and that the teething problems of assessment are addressed and disabled people have the confidence that reform will work for them. Amendment 60 would embrace this opportunity to send out a clear message that we will learn from mistakes in the system and iron out anomalies in the assessment before we start to assess some of the most vulnerable people currently receiving DLA, by ensuring that only new applicants are assessed first. That is what the safeguard would do. Amendment 60 is fair and proportionate. We are not saying that reassessment is wrong; we are simply saying that it needs to be done properly and carefully, and that it should be phased, with the Secretary of State playing a key role in the process to ensure clear scrutiny and accountability.

The amendments would ensure that the personal independence payment was a fairer, more effective and workable reform. As I set out in my introductory remarks, the Opposition support reform and the principles of reform; however, the Government have wasted a significant opportunity to introduce such reform. If the universal credit penalises families of disabled children by halving the support available to them; penalises severely disabled people who live alone by neglecting to replicate the severe disability premium or the personal independence payment; penalises disabled people in residential care homes by removing their DLA mobility component; penalises disabled people by making them wait six months before they receive the support that they need; and creates uncertainty and needless anxiety for the most disabled people in our society by removing their automatic entitlement to the new benefit, is it any wonder that we are opposed to this Bill?

[Jenny Willott (Cardiff Central) (LD)]

I rise to speak to the amendments tabled in my name, which focus on the mobility component of the disability living allowance for those in care homes. We have already heard a lot about that from the hon. Member for Glasgow East (Margaret Curran). Amendment 74 asks for the regulations on this issue to be dealt with under the affirmative, rather than the negative, procedure. Amendment 73 asks for a report on the impact of the changes after one year.

16:00

There were many concerns across the House when the Government announced their original plan to remove the mobility component of the disability living allowance from all those in care homes. Concern was expressed particularly about young people in boarding schools and residential care, and about the impact on parents who have to meet extra costs associated with their child’s disability, whether or not they are in residential care. For example, they might need to meet the additional cost of an adapted or expensive car to transport the young person around. Concern was also expressed about the impact of the proposal on older people in residential care, and it is that issue that seems to have taken off, rather than a focus on younger people.

The Government have listened, however, and they have said that they no longer plan to remove the mobility component of the disability living allowance from all those in residential care. Instead, they have made it clear that they intend to tackle instances of overlapping funding, such as when a local authority is providing funding for someone’s mobility needs directly to a care home and the individual is also getting DLA. I hope that the Minister will confirm that that is the Government’s intention, because it is important to be clear that we are tackling the overlap of funding rather than entirely removing mobility support from people in care homes.

[Fiona O'Donnell]

Under the hon. Lady’s definition of overlapping provision for mobility needs, would she settle only for what we would expect anyone living in the wider community to have—namely, complete freedom of choice and access to transport to assist them when it suits them?

[Jenny Willott]

I am about to come to my understanding of that point. Obviously, it is up to the Minister to determine her definition, and I am sure that the hon. Lady will be able to comment on what the Minister has to say later.

I am also glad that the Government have put on hold the plan to introduce this change while comprehensive research is carried out. Any decision needs to be based on solid evidence, and it has become clear that no research has been done in the past, so no such evidence has been available so far.

[Margaret Curran]

To the best of her knowledge, can the hon. Lady identify two examples of where overlap is a problem? Does she think that the review should be widened to involve disabled people? Does she also think that its findings should be published?

[Jenny Willott]

I have just made it clear that no research has been done in the past, so there has been no evidence up to now. I have absolutely no idea what evidence the Minister has found, but I am sure that she will be able to give the House more information on that and answer the hon. Lady’s question. Not being part of the research team, I cannot give the hon. Lady any examples of overlap, but I am sure that the Minister will be able to provide more information about that later.

[Margaret Curran]

May I ask you to address the second part of my question, which was about the review? There are serious concerns that the review is not being made public and that we do not know its terms of reference. I presume that you know its terms of reference, since you support the Government’s proposals. Could you perhaps explain them to the House?

[Jenny Willott]

I think she means “the hon. Lady”, rather than you, Mr Deputy Speaker. This is obviously an issue for the Minister to address later, particularly in regard to the terms of reference. I do not believe that it would have been appropriate for disabled people to take part in the research, because it is my understanding that this is an information-gathering exercise—

[Simon Danczuk (Rochdale) (Lab)]

Shame!

[Jenny Willott]

The hon. Gentleman shouts “Shame”, but this is an information-gathering exercise to obtain evidence on the basis of which a decision can be made. At that point, it will be appropriate for people to be consulted. When we know the evidence base, and what options are open to the Government, it will clearly be appropriate to consult. At the moment, the Government are communicating with local authorities to find out what funding is in place, and disabled people are probably no more aware of that than I am. It would not be appropriate, while gathering that information, to consult. Afterwards, when we have the evidence on which to base a decision, it will become appropriate to consult on the options.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I have to confess that I am astonished to hear the hon. Lady suggest that disabled people would have nothing to add to an information-gathering exercise. Would she support postponing the proposals until we have clarity on what the review will involve, to ensure that everyone with a view is able to put their view forward?

[Jenny Willott]

The hon. Lady completely misrepresents my words. I absolutely did not say that disabled people have nothing to add to this. I said that the Government are undertaking an information-gathering exercise so that we have an evidence base on which to look at the options for the Government to take forward. At that point, people with disabilities and others affected would, I hope, have an opportunity to be consulted and to participate in discussions. At the moment, it is my understanding that the Government are gathering information to provide the evidence that has been lacking. I have to say that I was taken aback to find that the previous Government had never done research to enable us to understand what funding is made available to care homes and what is made available to people through disability living allowance. Providing such evidence is seriously overdue.

[Several hon. Members]

rose—

[Jenny Willott]

I give way first to the hon. Member for North Antrim (Ian Paisley).

[Ian Paisley]

I am grateful to the hon. Lady, who is being very good and lenient with her time. On the issue of overlapping, which was raised at the start of her comments, I want to point out that the disability living allowance as currently constructed is a non-means-tested benefit. Overlapping implies that there should now be a means test. If part or all of someone’s benefit were to be taken away, means-testing would be necessary. Is the hon. Lady saying that she will support a provision that would introduce a new means test by stealth?

[Jenny Willott]

I do not believe that this is about means-testing of benefits. It is about looking for sources of state support or Government funding for the mobility needs of individuals with disability. It is about looking at the different sources of money to ensure that it is provided evenly to people with disabilities so that their mobility needs are covered.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

I understand where my hon. Friend is coming from, as she and I are signed up to the same position. Let me confirm that her position and mine is the one agreed at our party conference only a few months ago—[Interruption.] Let me put it on the record that the conference called

“on the Coalition Government not to remove the Mobility Component completely and to ensure sufficient funding for the mobility needs of those who cannot afford to fund their needs themselves”

and

“to ensure that any reductions to the Mobility Component are based on clear evidence that the cost of that support is provided via other funding means.”

That is where we stand, so I ask my hon. Friend to confirm that that is why she is making sure that the Government will end up standing there, too.

[Jenny Willott]

That is exactly the position that I am putting forward. I am concerned, because clause 83 still leaves it open for Ministers to cut the mobility component for those in care homes. As a number of Members have made clear, the concern about that is considerable.

[Dame Anne Begg]

I appreciate that the hon. Lady is trying to get the Government off the hook by supporting this review, but the original proposal came forward in the coalition Government’s first Budget—almost a year ago. Is she not as surprised as I am—if not shocked—that the work that she now advocates was not done before the proposal was made in the first place?

[Jenny Willott]

To risk the wrath that has been incurred by some colleagues on my side, I have to confess that I was somewhat surprised about that, but I also think it should have been done by the previous Government as well. It is pretty shameful that we have no understanding of where the funding for these costs has come from.

[Several hon. Members]

rose—

[Jenny Willott]

I am afraid that I am not taking any more interventions, as many Members want to participate in the debate and I do not want to run out of time. I am sure that those who have further comments will attempt to catch your eye, Mr Deputy Speaker.

We must not underestimate how important it is for people to be able to get out and about. I appreciate that those in residential care often do not have as many mobility needs as some people living on their own. For example, they do not need to shop regularly for food as it is usually provided, and they often do not need to make arrangements to get to a doctor’s appointment or the hairdresser’s because those services are often provided in the care home. However, they often need to shop for things other than food—for clothes and personal items—and they need to be able to maintain contact with friends and family. Younger people in residential care may often be in work and need to travel in and out of work as well. They have needs that need to be funded. It depends on the disability, but often public transport is not an option, so people rely on expensive taxis, on Motability scooters or on having access to their own vehicle, all of which add significant costs.

It is important that people have independence, keep up their social lives and live a full and valuable life. That is not possible on the £22 a week that people in residential care would be left with if they did not have the mobility element or any other support for their mobility needs. Although this part of the Bill is about PIPs, which will apply only to those who are over 18, I would be grateful if the Minister clarified the Government’s intention about extending PIPs to the under-18s, too, and whether the provisions will apply to families and young people with disabilities who are under that age.

My amendments would ensure that this important issue is decided by affirmative resolution, enabling proper parliamentary scrutiny, and that its implementation is monitored effectively through the production of a report after enough time has elapsed to show the impact and the effect. It is clear to me from the totality of the Government’s proposals that affect people with disabilities that the Government do not intend to restrict the independence of individuals. The move towards personal independence payments from disability living allowance goes in quite the opposite direction. We had a number of debates in Committee about the increased emphasis on individual needs and independence, and I sometimes found the Minister’s emphasis on taking every person as an individual and assessing their individual needs somewhat frustrating. Sometimes in debate it is easier to consider groups of people, but it is clear that the Minister’s intention is to consider individual needs and to take them into account when making decisions, as well as to ensure that individuals have independence.

[Stephen Timms]

The Minister has said that she does not envisage the results of the review being published. If I understand the hon. Lady correctly—she is making some telling points—she envisages the review being published so that there can be consultation. Will she confirm that she disagrees with the Minister on that point?

[Jenny Willott]

I have no idea whether the review will be published. I was commenting on the fact that the options on PIPs and DLA for the future should be consulted on. The Bill simply states that that will be decided in regulations, which is one reason I tabled an amendment requiring them to be subject to an affirmative resolution. The decisions will be made by regulations, which means that there is a further decision-making point. The Government will be able to publish their regulations and their intentions once they have done the information gathering and considered the funding situation across the board. At that point, I would like to see some broader involvement of people who are affected by these decisions. We will then have the information when we make a decision.

[Fiona O'Donnell]

rose—

[Jenny Willott]

I will give way one more time.

[Fiona O'Donnell]

The hon. Lady is very generous in giving way. How will this review, report and gathering of information apply to the devolved Governments of the country? How can the Minister possibly influence social care policy and NHS policy in the devolved Governments?

[Jenny Willott]

I am afraid that I shall disappoint the hon. Lady, but that is an issue for the Minister. I do not know what discussions the Minister has had with the devolved Administrations. I am a Member of Parliament for a Welsh constituency, so the issue clearly affects my constituents, too. I am sure that some discussion is going on, but the hon. Lady can ask the Minister to respond to that question.

A number of other issues are covered by the amendments before the House and have already been raised by the hon. Member for Glasgow East (Margaret Curran), including how the Government handle fluctuating conditions and the assessment requirements for PIPs. We have had a number of debates about fluctuating conditions, not least in a Delegated Legislation Committee yesterday afternoon which was attended by many Members who are in the Chamber this afternoon. Fluctuating conditions are hard to manage in the benefits system. As has been mentioned, Professor Harrington is doing work on descriptors for the work capability assessment for fluctuating and mental health conditions and on how the assessments can be improved to take them into account. I hope that the Minister can reassure us that the Government are learning the lessons from the mistakes made in the work capability assessment and that we do not replicate them when the new PIP assessment is introduced.

[Jeremy Corbyn]

Will the hon. Lady give way?

16:15

[Jenny Willott]

I am afraid that I will not, as I am aware that a lot of people want to speak.

I flagged up my concerns in Committee about whether there are some people for whom face-to-face assessments are not appropriate, and I was reassured by the Minister’s response, as she clearly accepted that they are not appropriate for everybody. She intends to allow Jobcentre Plus advisers discretion to consider individual cases and the Government seem to be thinking about taking the same approach to the need for ongoing face-to-face assessments. As long as there is discretion and an acceptance that such assessments are not appropriate for everybody, I hope that decisions will depend on the discretion and common sense of Jobcentre Plus advisers. Will the Minister reconfirm today that the Government are taking a slightly flexible approach?

The final issue that I want to flag up is that of sudden-onset conditions such as cancer, stroke or accidents, which the hon. Member for Glasgow East has mentioned. Such conditions are very different from conditions that gradually worsen. They do not give people time to adapt mentally, emotionally or financially to their new circumstances and in addition to the trauma of coping with diagnosis there are large up-front costs that start almost immediately. There might be a sudden loss of income and there is the cost of travel to and from hospital for regular treatments, as well as parking charges and new equipment that is needed. Such costs seem to be just the sort of thing that disability living allowance was designed to fund.

The change from three to six months before someone can apply for the new personal independence payment might hit those people the hardest, because they have to pay those costs so immediately up front. I understand that that group of people form a very small proportion of those who are currently on DLA—around 6%, I think—so it would not be expensive to treat them differently. There are knock-on implications for that group, as their carers will not be able to apply for carer’s allowance unless they have DLA, so both the claimant and the carer could lose income. I raised this issue in DWP questions on Monday and the Minister was kind enough to say that the Government are looking into the issue. I hope that they will look at what can be done to ameliorate the situation for that small and distinct group.

I welcome the Government’s moves to take into account concerns about the removal of the DLA mobility component, and although I welcome the decision not to push ahead with the original proposal to remove it entirely, I think the Bill leaves the door open for that to happen in future—perhaps not under this Government but under a future one—so I believe that any changes should pass through the House via affirmative resolution. I also believe that the situation needs to be monitored closely to ensure that we are protecting and enhancing the lives of some of the most vulnerable in society.

[Dame Anne Begg]

I suspect that many hon. Members will want to speak particularly about the removal of the higher-rate mobility allowance from residential care, so I shall not talk about that in any detail, but I think it is merely the top of a very pernicious iceberg, and the proposed amendments attempt to allay our concerns on that. This issue has captured the public imagination because it seems so grossly unfair and because people cannot understand what kind of Government would take away the independence of the, by definition, most disabled people in our community because they happen to live in a residential home or, for those whose families might lose access to an adapted vehicle, because they happen to go to a residential school.

I want to look more widely at the Government’s reasons for seeing fit to wipe away everything that was the DLA and bring in a new benefit called the personal independence payment. Let me address the Government’s analysis, or rather their argument—I should not have said analysis because part of the problem is that there has been no proper analysis and it is very difficult to get any data to suggest that some of what they have said is true; that might be the case for individual cases, but it is not widespread. The fact that the hon. Member for Cardiff Central (Jenny Willott) had to ask for some of those data may show that the Government lumbered into the whole area without knowing the details, and that their proposals were based on some perception of prejudice, or the need to save money, a point to which I shall return.

What were the criticisms that the Government laid at the door of DLA? They said there were no regular reassessments. That is easy to sort. We can put in regular reassessments for certain people. The Government said that too many people were getting DLA for life. Is that too much of a problem? If a person is quadriplegic after a cataclysmic accident, I am not sure they will get better. The reason many people who at present depend on DLA are so frightened by the changes is that they have an award for life; they do not have to worry about more reassessments. They have gone through assessments. They know they are profoundly disabled. Anybody looking at them can tell they are profoundly disabled, so why on earth do they yet again have to go through an assessment?

Another criticism of DLA was that some people were getting it automatically based on their condition. I challenge the Minister to tell us what it is about the condition of people who cannot feed themselves, cannot dress themselves, cannot move from one seated position to another, cannot walk or go to the toilet themselves that means they have to be assessed for their need for extra costs for care and mobility. I cannot think of a reason. Why should there not be an assumption that those individuals have their extra costs for care and mobility covered by DLA? That is what it was all about.

The Government’s main argument was that DLA was not well understood. That is not my experience from talking to people who receive DLA. It was one of the few benefits they did understand. DLA was for the extra mobility and care costs associated with disability. Compare that to the confusing rules for tax credits, or the in-work benefits or disability premiums associated with jobseeker’s allowance, employment and support allowance or incapacity benefit. We could look at contributory ESA as well. Those are confusing. The one benefit for disabled people that was clear—they knew what it was for—was disability living allowance. That is what they tell me and I am sure it is what they have told the Government. The vast majority of responses to the Government’s consultation made exactly that point: people valued DLA so greatly that they were frightened they might lose it.

Another criticism the Government have made of DLA is that the form was too long and complicated. That would be easy to sort. Make it shorter, make it less complicated and maybe put it online. There were solutions.

Those are the main criticisms of DLA that the Government have come up with, but none of them could not have been solved by some changes to the existing allowance. It did not require the sweeping away of DLA and its replacement with a new benefit, with new criteria. If the criteria were out of date, some of them could have been changed, but there was and is no need to change all of them. People who depend on DLA at present as a large part of their income are terrified, because they do not know what lies ahead. If the system is as bad as, according to the Government, it is at the moment, those people are worried that whatever the Government come up with will not be suitable for their needs. I have to tell the hon. Member for Cardiff Central that the previous Government did not collect data on double-funding mobility allowance in care homes, because they were not advocating the removal of DLA from that group of people.

The things that are particularly good but often forgotten about DLA include the fact that it is an in-work and out-of-work benefit. That element will become increasingly important as the Government proceed with their welfare reforms to put work obligations on people with profound disabilities. Anyone who is not assessed as being in the support group for ESA will have a work obligation. However, if those who end up in the work-related activity group find that they no longer qualify for DLA, it will be all the harder for them to find a job or to do the work-related activity that the Government expect them to do, because the extra financing to make that possible will have been removed.

The best thing about DLA was that we had for the first time in this country a benefit that followed the social model of disability, rather than the medical model. There is a worry that the clock will be turned back. The Government call their new benefit the personal independence payment, but DLA was a personal independence payment, so they did not need to change the benefit. DLA is personalised and represents what the Government say they want the benefit system to be because it is a dynamic benefit, which means that it helps people to lead an independent life by going out to work, visiting friends and doing all the things that everyone else takes for granted. Such independence includes the ability to live in the community, which can be achieved if a person can buy in care and get someone to come in to look after their care needs. All those things exist under DLA, so why is there a need to make a fundamental change to something that was not broken? Why fix something that was working reasonably well? No one would have complained if the Government had done a bit of tweaking, but such a fundamental change makes people especially worried.

The Red Book states that the Government want to cut 20% from the DLA budget. That means that the pot will be 20% smaller, but given the cost of reassessing everyone, about which we have heard today, the reduction in payments will be more than 20%, because some of the money that would have gone to disabled people so that they could live their lives will be invested into the private company that will carry out the reassessments. Given the difficulties of the ESA, there is suspicion about the accuracy of the reassessments. Even though Professor Harrington has made recommendations, there are still fears and worries about the way in which the work capability assessment is working, and disabled people’s experience of that assessment makes them especially worried about what will happen under PIP.

[Fiona O'Donnell]

Does my hon. Friend agree that anxiety is especially high among people with mental health problems? We have recently heard reports of a number of suicides, so we need to be able to offer people reassurance about the process.

[Dame Anne Begg]

My hon. Friend is absolutely right. Perhaps I should now speak to amendments 76 and 77, which I tabled as an attempt to ensure that fluctuating conditions—mental health problems are often fluctuating conditions—are properly recognised.

Mental health organisations throughout the country are deeply concerned about clause 79, which makes provision about whether an individual will qualify for a personal independence payment. The Bill states that the question of qualification relates to whether during

“every time in the previous 6 months, it is likely that if the relevant ability had been assessed at that time that ability would have been determined to be limited”.

Mental health charities are worried that someone with a fluctuating condition would not qualify because they would have to be sufficiently ill for qualification at every point over those six months. Amendments 76 and 77 clarify that the condition would not have to be continuous throughout that time. The charities agree with the principle of monitoring a person’s condition over time rather than making a snapshot assessment—they have no problem with that. They say the latter would poorly serve individuals with fluctuating conditions. This has been especially apparent in the experience of people applying for employment and support allowance.

16:30

The wording of the Bill suggests that people with fluctuating mental health problems or another fluctuating condition will not qualify if they are not consistently ill for the required length of time. Denying them support through PIP could have a detrimental effect on their health and their ability to manage their condition. This could affect the individual’s ability to stay in work if they are employed, or impede their recovery if they are not working. Also, it would not accurately capture the impact of the condition on an individual’s life. I do not intend to press my amendments to a Division—we probably have enough votes—but I want an assurance from the Minister that fluctuating conditions will be taken into account and will be recognised. That is a particular worry.

If the Government are hellbent on introducing PIP, it is important that we get it right. As I just mentioned with regard to people with mental health problems, the Government are putting new obligations on disabled people of working age. They will have work obligations. They will have to do work-related activity. If PIP is not there to act as an aid to help someone get into work, the barriers that exist for all disabled people—such as lack of access to transport, or the lack of the ability to buy in their own care that is flexible enough to allow them to go to work—become insurmountable barriers. That means that the Government will not be able to deliver on their stated aim of getting more and more disabled people into work.

It is particularly important that the right people and those with severe disabilities get PIP because, as we heard during Prime Minister’s questions today, the Government are proposing to limit contributory employment support allowance to a year. That will affect anyone who is not in the support group and who has cancer—that has been used as an example, but it could be someone in the early stages of multiple sclerosis or with a condition such as Crohn’s disease—and who is quite ill, but not terminally ill or ill enough to go into the support group, and not so disabled that anyone looking at them would say it was unfair to expect that person to work.

Large numbers of people with conditions that are difficult to manage and make work difficult will be assessed as being able to look for work some time in the future and will therefore be in the work-related activity group. They will lose their contributory ESA after a year. I know that many such people in my constituency will not get any benefit afterwards because they will probably live in a household that has other income. That need not be a large income, but just enough to put them above income support level, which is not particularly high. There is much talk about caps on benefits, but if a household is living on income-related benefits, it does not get a lot of money. Those people do not get £26,000. They get an awful lot less than that. If somebody is earning more than £10,000, there is a good chance that they will not get any benefit.

In a constituency such as mine, which is reasonably affluent and wants people in work, there is a good chance that there will be a partner in the household who will be working. At the end of the year, the cancer patient or the person in the early stages of multiple sclerosis will lose their contributory ESA if their condition is not bad enough to put them into the support group. If that happened now, the one thing they would have is their DLA, but in future they may not have their PIP. They will have no independent income whatever. That is particularly worrying.

Even more worrying is the fact that the Government have set up an unfairness in that some people will be able to keep their contributory ESA and others will not. If someone has a cataclysmic accident and becomes quadriplegic, they will go straight into the support group. If they have worked all their life up to that point and paid their national insurance, they will get their contributory ESA, as far as I can gather, for life.

However, if someone falls out of work because they have just been diagnosed with MS that is quite far advanced but not far enough advanced to put them into the support group, they might be in the work group. Because they have MS, they might find it very difficult to get a job. That was why they fell out of their previous job and it would be difficult to get back into work. MS in its early stages can be a fluctuating condition. For the first year, that individual will receive contributory ESA, and the next year they will not because they have a working partner, but what will happen in year three or four when they are reassessed and go into the support group? Will they get their contributory ESA back? I do not think that they will, because they will not have made national insurance contributions for two years, having been out of work for that time. Perhaps the Minister could clarify that.

There is a danger in all this of setting up a two-tier system for contributory benefit, which would be particularly unfair on those with slowly degenerative diseases, who fall out of work some time before they are classified as severely disabled and before the work obligation is taken off their shoulders.

[George Hollingbery]

Perhaps I misunderstand the hon. Lady, but I think that I am right in saying that if those individuals are reassessed a year or two later and found to qualify for the support group, contributory ESA is no longer relevant as they will automatically be in the support group in any case. Is that right?

[Dame Anne Begg]

That is exactly what I would like the Minister to clarify. I do not know whether there will be contributory ESA for those in the support group, whether it will be income related, or whether everyone will get it. If someone lives in a household with a working partner who earns £20,000 or £30,000 a year and then goes into the support group, having not worked before that and so having not made national insurance contributions in their own right, will they get any ESA? I am not sure they will, because ESA is an income replacement benefit, and of course to get such a benefit they need to have made national insurance contributions or have a low income.

[Stephen Timms]

My understanding is that, even though they are in the support group, if they have not met the contribution conditions they will not get the contributory benefit. Perhaps the Minister will confirm that when she responds.

[Dame Anne Begg]

That is my understanding also. There will be a group of people who will have paid the contributions in the two previous years and who will go straight into the support group and get to keep the benefit for life, but those with slowly degenerative diseases and those who come from better-off households will get nothing at all. It is that kind of unfairness and that sense of a two-tier system that frightens people.

[Maria Miller]

On a point of order, Mr Deputy Speaker. Although it is very interesting to hear about the ESA, it actually is relevant not to PIP, but to another section of the Bill.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I am sure that there will be a conclusion in which the two points join together. I am not taking that as a point of order.

[Dame Anne Begg]

My point is that if the Government take contributory ESA away from this group of people and then change the criteria so that they no longer qualify for DLA or the new PIP, those people will end up with no independent income at all. That is the connection. We cannot look at the Government’s proposals to remove DLA and introduce PIP in isolation, because they are putting disabled people under all sorts of other obligations. If we look at the benefits in isolation, we will get into trouble, and that is what leads to the fears of disabled people, because many of them, particularly those with more profound disabilities who are trying to live independently in the community, have complex funding packages that they have put together to make things work for them. They are dependent on the personal care element of DLA for their care and on housing benefit to pay for their rent; they are dependent on local government facility grants to adapt their houses; and they are dependent on the mobility element of DLA to provide them with transport or, for many of them, with cars through the Motability scheme. These are complex packages, and if the Government interfere with some of them the whole edifice could collapse. That helps to explain why there is so much fear among people with disabilities about what the Government are doing. They feel that the Government are not seeing the whole picture—that they are seeing different pieces of the jigsaw but not putting it together or looking at the impact that those pieces will have on individuals.

Part of the problem with universal credit and with PIP is that we do not yet know the criteria, the payments or who will qualify for what, so it is impossible for individuals to sit down with all the new regulations, which nobody has seen because they have not been published, and work things out, saying, “Right, in my condition, I know I will get that, that and that, and I can add that together and that will then tell me whether I am going to be better off or worse off under the new proposals.” It is difficult to judge the situation, because we do not have that detail.

[Mr Nigel Dodds (Belfast North) (DUP)]

The hon. Lady is doing the House a great service in teasing out the complexities, and in illustrating just exactly what is and is not known. Is not that at the root of many problems? How can we proceed with these measures when our constituents have so many unanswered questions? They have asked me, but I am unable to relay with any certainty what is going to happen to them, so surely the issues that have been raised deserve full clarification. Certainly, what has been illustrated as definitely going to happen demands that the amendments be carried.

[Dame Anne Begg]

Much of Monday’s debate was about the fact that the regulations for PIP, for housing benefit and for universal credit do not exist, so it is difficult to judge exactly what will happen to individuals.

There is also a fear among disabled people, because the Government sometimes take a simplistic view of what a disability might be. Disability living allowance was quite clear, because it was to cover the extra costs of disability, but one worry is that, under the PIP proposals, aids will be taken into consideration. The implication is that, if someone has an aid, they do not have the extra costs associated with their disability—that somehow the aid will miraculously take away those costs.

It has been said—the Minister did so in front of the Work and Pensions Committee—that, if a wheelchair-using Olympic athlete has a university degree, it is reasonable to place some work obligations on them. That might be the case, but being an Olympic athlete who needs a wheelchair does not take away the need for an adapted car. They still need the car, the wider parking space, to build the ramps to get into their house, the adapted shower that the local authority’s facilities grant often does not pay for, and the adapted bathroom.

In many cases, therefore, aids and adaptations do not take away the need for extra money. In fact, people with disabilities sometimes need the extra money to run some of those aids, such as an electric wheelchair and the extra costs that that entails, or an electric buggy that gets them around the shops. Rarely are such aids supplied by the NHS or, indeed, by the local authority, and DLA was such a good benefit because people could choose how they used it in order to fulfil their needs and lead an independent life.

If disabled people have work obligations placed on them, they will need extra money for travel costs. I could be as fit as possible and have the best super-duper wheelchair in the world, but with the best will in the world I am still not going to be able to get on the underground. It just will not happen, so we need to ensure that we get PIP right, and to ensure that it enables disabled people and does not hinder them.

Disability living allowance, particularly the mobility element, acts not only as a passport but as a proxy for all sorts of other things. Local authorities and organisations such as railway companies and cinemas use an individual’s qualification for upper-rate mobility allowance as a proxy for the fact that they must be disabled and therefore qualify for a disabled railcard, a disabled cinema ticket or a blue badge—or, in my local authority, a green badge, for which we also have to pay 20 quid a year, so it is not as though we are getting it for nothing. That means that people do not have to be assessed time and again, which makes things much easier. For many people, the knowledge that they have been assessed and qualify for upper-rate mobility allowance is more valuable than the money. I would not say that the money is not important—of course it is—but access to a blue badge with reasonable ease is also incredibly valuable.

16:45

I hope that the Government will look again at how they are introducing PIP. I will support my hon. Friends’ amendment on the withdrawal of the upper-rate mobility PIP from those in residential homes. I hope that the Minister can calm some of the fears that disabled people are experiencing. They fear that if the Government do not get this right, then instead of being able to get out of their homes and go to work, they will be stuck there and have a life that is not as fulfilling and worth while as it is at the moment.

[Maria Miller]

It is absolutely right that we have a serious, considered and detailed debate on the reform of one of the most important benefits that we have, not only in relation to disabled people but within the whole array of benefits. It also represents £12 billion of taxpayers’ money, so they would expect us to have a good and detailed debate.

I do not like to take issue with the hon. Member for Aberdeen South (Dame Anne Begg), not least because she is Chairman of the Select Committee—I had the pleasure of appearing before her this morning—but if it was easy to change the current system of DLA by simplifying the claim form, making it easier to understand and streamlining its administration, then I am rather surprised that the previous Government did not address those issues before. In fact, perhaps it is not I who take issue with the hon. Lady but Opposition Front Benchers, given their stated position. The right hon. Member for East Ham (Stephen Timms) has said:

“we recognise that it is right to reform the DLA and accept that it is perfectly sensible to use a medical test as the basis for assessment”.––[Official Report, Welfare Reform Public Bill Committee, 10 May 2011; c. 825.]

I have to take issue with the idea of a medical test, but the right hon. Gentleman obviously has his own reasons for saying that. The hon. Member for Glasgow East (Margaret Curran) has said:

“There is no doubt, and it has been plainly stated, that there is a case for reform. The Opposition and I are clear about that.”––[Official Report, Welfare Reform Public Bill Committee, 10 May 2011; c. 767.]

I think she said that when she was in the Scottish Parliament. [Interruption.] She said it recently as well. There is clearly a growing consensus on the need for reform.

When DLA is not getting the right support to the right people and £600 million is being paid in overpayments, and there are £190 million of underpayments—hon. Members will be equally concerned about that—there is a clear need for some fundamental changes. I hope that Labour Members who are feeling shaky on the need for reform can remind themselves that their party has also called for it in the past. Perhaps the position has changed, but those on the Front Bench have certainly not indicated that today.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

Will the Minister give way?

[Maria Miller]

I hope the right hon. Gentleman will forgive me if I do not take many interventions, because I am very conscious of the time and of the desire of Opposition Front Benchers to get through the selection list. Many questions have already been asked and I will deal with them as I go through my remarks.

Before I respond to the issues that have been raised, I will set out the three basic principles that are central to our reform. The personal independence payment will provide support for long-term needs. It is one of a wide range of benefits that are on offer. It will be based on an assessment of the impact of a health condition on an individual and their ability to lead an independent life, rather than just on the condition. Above all, it will be fair.

Amendment 43 seeks to exclude individuals from the face-to-face consultations in the new assessment process for PIP. DLA relies on a self-assessment form and I will not go through the details of why that does not work. One of my constituents had to take a four-hour course to learn how to fill out the DLA form, which shows its ineffectiveness. One of our key proposals to ensure that the benefit has a more consistent and transparent assessment is that most people will have a face-to-face consultation with a trained independent assessor. The consultation will allow the individual to play an active part in the process, rather than passively filling in a form, and put across their views on how their health condition or impairment affects their everyday life.

We recognise the importance of ensuring that the assessment process is sensitive and proportionate. The Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), has a great deal of expertise in that area from his work on the work capability assessment. Let me be absolutely clear that when it comes to PIP, some people will not be required to attend a face-to-face consultation. I was clear about that in Committee and I reiterate it now. For such people, the assessment will be carried out on the basis of evidence that has already been gathered. Such decisions will be at the discretion of the individual triaging the assessment as it goes through.

Amendment 43 would undermine one of the key principles of PIP. It would effectively label people by health condition or impairment, rather than treat them as individuals. The disability organisations with which I am working day in, day out on the development of the assessment and the overall benefit would feel that to be a step back, not a step forward. The impact of a condition can vary greatly. Under the amendment, somebody with a severe mental impairment would not have to have a face-to-face assessment. That is a broad category, which covers a wide range of conditions that affect people in many ways. Although we accept that not everybody who has a severe mental impairment will have to undergo a face-to-face consultation, for others it will make a great deal of sense. For that reason, I cannot accept the amendment.

I deal now with amendments 44 to 47, 76 and 77. I am grateful to the Opposition for agreeing that PIP is a long-term disability benefit, and that there should be an expectation that there will be limitations for a period of not less than 12 months. The proposed qualifying period will allow us carefully to assess someone’s ability to carry out a range of activities once their condition has settled down and potentially once the effects of treatment and rehabilitation have begun. PIP will be a valuable, universal, tax-free benefit—that is carried forward from DLA—and it will be paid irrespective of whether a person is in or out of work. I emphasise that point for the hon. Member for Islington North (Jeremy Corbyn), who conflated it with an out-of-work benefit. It is our view that the additional financial support that it brings should start only once other support mechanisms have played their part and once the financial burden becomes onerous for an individual over the long term, regardless of their income.

I can reassure Members that the Government have been listening to the arguments regarding the return to a three-month qualifying period, and we will continue to listen and talk regularly to disabled people and their representative organisations. We recognise that for some people there may be additional financial burdens at the outset, but we have to consider the matter within the ambit of the wide range of other support that is already available during the early months.

[Sheila Gilmore]

Will the Minister give way?

[Maria Miller]

Will the hon. Lady forgive me if I do not give way now? Perhaps if I do not cover her point, she can intervene on me later.

The hon. Member for Aberdeen South has tabled amendments 76 and 77, about how we treat fluctuating conditions. That is absolutely an important part of ensuring that we have a successful assessment. The use of the term “every time” in the Bill has caused some concern, I believe unnecessarily. I hope that I can allay her concerns about it.

Our approach will be to have two main components to the assessment. First, we will consider whether an individual is able to carry out an activity, and whether they are able to do so reliably, repeatedly, safely and in a timely manner. If they cannot, it will be considered that they cannot complete that activity at all.

Secondly, the assessment will not be a snapshot of any one day, as I am sure the hon. Lady would expect. It will consider an individual’s ability to carry out activities over a period of time—we suggest a year. It will consider impacts that apply for the majority of the time. We will determine whether somebody has met the required period condition by considering whether they would be likely to meet the requirements of the assessment if they were assessed at any point over the period in question, which will effectively create hypothetical assessments across that period. We envisage that the assessment will not consider the effects of a disability on just one day, because the same principle will apply across the whole period. That means that we will consider an extended period of time, and that we will still apply the “majority of time” test. I think she will be reassured by that. As such, individuals will be able to meet the required condition even if their disability fluctuates over the specified period. We intend to include the treatment of fluctuating conditions in the next iteration of the assessment regulations, which is due to be published in the autumn. I hope that provides some reassurance.

I turn to amendments 66, 41 and 42. We have already announced that we will not remove the mobility component of DLA from people in residential care from 2012, as originally planned. We have also said that we will re-examine its position within the personal independence payment, which is precisely what we are doing. When that work is complete we will make a final decision, in the context of the full reform of DLA and the introduction of PIP.

[Margaret Curran]

rose—

[Maria Miller]

Perhaps the hon. Lady can let me finish and see whether I have covered her point.

We will treat care home residents in exactly the same way as any other recipient of DLA. The views that have been expressed during, and in the lead-up to, today’s debate have been vigorous and made people’s positions clear. That is why we are not introducing the change in 2012 and are undertaking a review of the practical issues on the ground. We will not produce a review report, because we are not undertaking an official review. We are simply collecting information about the implementation of the policy at the moment, as I am sure Labour Members did when they were in government to inform their policy decisions.

[Sheila Gilmore]

Will the Minister give way?

[Maria Miller]

I will give way briefly.

[Sheila Gilmore]

It is very important that the Minister clarifies exactly what is intended. Does she still intend at some point, perhaps after a review or some information gathering, to treat the people affected as a group and decide whether they are entitled to the benefit, or will each individual case be assessed? If it is the latter, how will the information be gathered?

[Maria Miller]

If the hon. Lady will listen to my full remarks, I hope that she will be satisfied. We have made it clear that we want to remove overlaps, and that we do not ever want to limit severely disabled people’s ability to get out and about, so we will not do what she describes.

[Cathy Jamieson]

rose—

[Maria Miller]

Will the hon. Lady forgive me if I try to complete my remarks? I will give way if I have not answered any questions. I will ensure that when we introduce PIP from April 2013, disabled people are treated absolutely fairly, regardless of their place of residence. We do not intend to undertake what the hon. Member for Edinburgh East (Sheila Gilmore) was talking about.

[Cathy Jamieson]

Given the concerns about the term “overlap”, will the Minister be absolutely specific about what she means by it? For example, is it overlap if a care home uses a minibus to transport residents?

[Maria Miller]

Obviously we are looking at whether an individual has access to support, not at whether a care home has access to it. I could not make it plainer than to say that we do not intend to remove somebody’s ability to get out and about. That is a plain and categorical statement, and the hon. Lady can interpret it as she chooses—I know that I interpret it as a plain and clear statement. Support for disabled individuals should be available in the social care packages that are available on the ground. If that support is not in place, there is no overlapping benefit.

[Cathy Jamieson]

rose—

[Maria Miller]

Will the hon. Lady forgive me for moving on and making some more comments?

Opposition Members will not be surprised to hear that I feel strongly that the Government have made our position clear on this matter.

[Margaret Curran]

I cannot understand this. If, as the Government say, they are not removing the DLA mobility component from people in residential care, why do they need the Bill to give them the power to do so?

[Maria Miller]

We are not doing that. We are reviewing the situation. As the hon. Lady will of course know, we need provisions in the Bill to take account of other areas of overlap within PIP—it was the same under the previous Administration—so that we do not pay certain elements of the benefit to people in various types of accommodation. Any change or refinement will be dealt with in regulations, which she will be able to view for herself.

[Duncan Hames]

I have heard very clearly the Minister’s assurances in her remarks so far, but I am at a loss as to why the Bill refers specifically to residence in a care home as a condition for clause 83(1)(b). I am encouraged by what she has said, but I do not understand why that provision remains in the Bill.

[Maria Miller]

My hon. Friend will know that we are looking at this matter in some detail, and at the evidence on the ground. If we do not feel that an overlap is in play, we will take the appropriate action. He can rest assured that any further action that we take in that regard will be defined in regulations and subject to further debate.

Amendment 73, to which my hon. Friend the Member for Cardiff Central (Jenny Willott) spoke, would require the Secretary of State to produce a report on the impact of regulations made under clause 83 within a year of their being laid. In the light of the explanation that I have just given, considering whether to produce a report on the impact of regulations made under the clause could be premature. I therefore hope that she does not press the amendment to a Division.

Similarly, on amendment 74, on regulations, I repeat my assurances that we take extremely seriously the concerns expressed earlier about care homes, and we are committed to responding to them in the right way. The House would expect the Government to look at the facts of how a policy would be implemented before they move forward with it, which is exactly what we are doing. The amendment would make regulations applying to the payment of the mobility component of PIP subject to the affirmative resolution in the first instance. We spoke at length about that in Committee, and I do not want to debate again whether a resolution should be affirmative or negative. We are subject to the scrutiny of Parliament in this. I would like to return to the commitment that I gave the hon. Member for Glasgow East in Committee when I said that I would reflect on whether other regulations should be subject to the affirmative procedure. I am happy to reiterate that, but at the moment I do not think that we need to go further.

[Stephen Timms]

The hon. Member for Cardiff Central (Jenny Willott) argued that when the review has been carried out and the Government have a proposal, it should at least be consulted on before it is put into effect. Will the Minister at least accept that point?

[Maria Miller]

We are not producing a report to consult on. What we will do is make our position clear, and then there will be the opportunity for people to give us their views on that.

Finally, I would like to speak to amendment 60. I believe that the intention of the amendment is to ensure that the new assessment for PIP is working effectively before it is used to reassess the existing disability living allowance caseload. I can reassure the hon. Member for Glasgow East that it is our intention to do that. But I can go further than that—the Government are committed to ensuring that the new assessment is working effectively before it is used for any individuals, new claimants or not.

[Dame Anne Begg]

Related to that point, although it is slightly different, I wonder whether the Minister can allay the fears of people with Motability cars. Some of them could sign a new lease this month and be reassessed for PIP before the end of that lease, so they might lose the mobility element of DLA and therefore lose their car. What would happen in such cases?

[Maria Miller]

I had a meeting with Motability yesterday to talk about these issues, which was one of many meetings that I and officials have had with it. We will look at the issue in great detail. Motability provides a fabulous service to disabled people and we will ensure that the issues that the hon. Lady mentions are addressed.

[Cathy Jamieson]

Will the Minister give way?

[Maria Miller]

If the hon. Lady will forgive me, we are running very short of time.

Amendment 60 would have the unwelcome effect of allowing the automatic transfer of existing DLA claims on to PIP without any review of entitlement. PIP is a new benefit, with new entitlement criteria and a new assessment of individual need. To transfer people to PIP automatically without first determining whether they are eligible for the benefit would be inherently unfair and would perpetuate the failings of the current system. I cannot therefore accept that amendment.

I hope that I have started to give hon. Members a flavour of the scale of work that is being undertaken by the Department in putting forward a new benefit of this scale. I hear the loud reiteration of many of the arguments that I have had with disabled people and disabled people’s organisations over the previous months in hon. Members’ comments today. I am sure they will be reassured that disabled people and disabled people’s organisations are at the heart of the development of our assessment, which is now fully available for people to look at and comment on online. Some of the amendments proposed today are wholly inconsistent with the principles that I have set out for our reform of PIP, while others are unnecessary. I hope therefore that the hon. Member for Glasgow East will withdraw the amendment.

[Jeremy Corbyn]

I will be brief because many other hon. Members wish to speak, and under the timetabling motion we have to conclude by 6 pm, which is very inadequate given the seriousness of the issues. I shall speak specifically to amendments 43, 76 and 77. Amendment 43 was tabled by my Front Bench colleagues and I am happy to support it. I have added my name to it and I hope that they have noted that. Amendments 76 and 77 were tabled by my hon. Friend the Member for Aberdeen South (Dame Anne Begg).

This morning, I was at a commendable place known as Centre 404 in Islington, which provides support and activity for those with physical disabilities and learning difficulties, as well as support for their carers and families. It has been going for 60 years and is a very successful and effective organisation. The large numbers of people there this morning were discussing the introduction of PIPs and the issues surrounding carers week. Before we go into the details of the amendments, we should think for a moment about the enormous amount of work done by carers, who are inadequately recompensed and save the economy vast sums of money. If they were they not doing this work and giving up their careers and lives to care for those who desperately need their help and support, that care would simply not be provided and the costs to the state would be far greater, so we should recognise the economic contribution they make in a decent and humane way.

The Minister said that I conflated the question of jobseeker’s allowance interviews with PIPs. In a sense I did, because I was drawing attention to how people were dragged in for interview. For example, a lady told me—she is a much respected member of the community active on these issues—that her doubly incontinent adult daughter, who has learning difficulties, was told to go to a jobcentre for a jobseeker’s allowance work interview. It is expensive, unpleasant, wasteful, stressful for everyone concerned and an utter waste of time, and considerable damage and humiliation is caused to the individual and their family. That is why amendment 43, which would exempt those with prescribed medical conditions, would be a sensible, important and useful change to the Bill.

The Disability Alliance described to me how PIPs are likely to come in and how the assessments will take place, and the word that kept recurring was “continual”—continual prompting, continual help, continual assistance, continual support—which is interesting, because a person with a sporadic mental health difficulty does not need absolutely continual help and support, yet they do need help and support on a continuing basis. Do they then lose out on PIPs?

[Stephen Lloyd]

Does the hon. Gentleman agree that that definition also perfectly describes people with multiple sclerosis, which is a fluctuating condition? Someone with multiple sclerosis might need very little support one day, but literally within 24 hours might require substantial support.

[Jeremy Corbyn]

Absolutely. My hon. Friend the Member for Aberdeen South pointed out that there are some conditions that although not terminal or immediately life threatening are nevertheless very debilitating. MS fluctuates in its intensity and the intensity of care and support needed.

People with a long-term, continual and severe disability should be exempt, and should not be forced to go through this interview process. In an intervention on my hon. Friend the Member for Glasgow East (Margaret Curran), who sits on the Front Bench, I raised concerns about the costs of taking people in for interview, refusing them and then putting them through an appeals process, only for them to end up, months later, exactly where they started—with lots of costs, lots of time, lots of humiliation and lots of waste at the end of it. Amendment 43 would make a pretty appalling Bill very slightly better by recognising that those with permanent and long-term conditions should not have to go through this process. I therefore hope that the House will recognise the amendment’s importance and be prepared to pass it today.

17:15

[Sir Peter Bottomley]

Whether or not amendment 43 is needed, I am quite sure that the officials and others who do the assessments would not expect people with those conditions to be able to go to work. I do not think that this would be a great problem in practice; however, there is always a problem at the boundary.

When I was getting on the Jubilee line this lunchtime I met a young man in a wheelchair—in fact, he turned out not to be that young, because 20 years ago he was helping to build the Jubilee line. He said, “What do you do?” “I work at the House of Commons”, I replied. “Are there any jobs there?” he asked. “650”, I said. “They come up every five years.” He said, “I’m a cook.” “There’s no reason why a cook can’t be a Member of Parliament as well”, I said. I did not ask him whether he lived at home, in a hospital or in a residential care home, or whether his residence was in a home with others.

Earlier this afternoon, I spoke indirectly—I will now speak directly—about St Bridget’s in Rustington, the place mentioned in the first line of the second verse of “The Gnu Song” by Michael Flanders. For those with long memories, “The Gnu Song” comes when he is talking about someone parking a car across his dropped kurb with “GNU” on the registration plate. There are people in Rustington who live in their own homes, and others who also live in their own homes, but who share it with others. The definitional problem is just as great as it might be at the Princess Marina home—again in Rustington—which is a Royal Air Force benevolent fund home that is dual registered. Part of it counts as a hospital, part of it counts as a home and part of it counts as a residence. Incidentally, “residential homes” are not defined in the legislation; rather, it talks about “care homes”.

In Worthing, in the other part of my constituency, there is Gifford house—the Queen Alexandra hospital home—which is not just for former service personnel, but for many others. Although I have not had representations from them, I do not want to exclude them from consideration. I pay tribute to my hon. Friend the Minister for kindly coming to St Bridget’s—the Leonard Cheshire home—among her many visits. I pay tribute to the people who live there, their families and my hon. Friend the Minister, because it was one of the best meetings that I have seen for a long time.

I trust my right hon. Friend the Secretary of State, my hon. Friend the Minister and those working with them to come up with the right answer. My preference is for amendment 42 to be agreed to, and then for the Government to come forward with their solution to the problem after they have received the result of the review. They can then come back, either here or in another place, and make an adjustment if they choose to do so. At the moment, however, the way I read the Bill is that someone whose residence happens to be in, say, St Bridget’s—this is not exclusive to St Bridget’s or Leonard Cheshire homes generally—could easily be excluded.

I shall not make the sort of speech that I might make in opposition, about how the Henry VIII clause in clause 83(4)(e) allows

“such other services as may be prescribed”

to be covered, nor shall I go on about subsections (5) or (6), which would allow almost anybody to be divorced under their provisions. However, I believe that we can trust the Government and that they are setting about this in a way that is rational. However, unless the legislation is amended or we receive other assurances, this is not a Bill that this House ought to pass.

Dorothy Sayers, in her book “Unpopular Opinions”, distinguishes between the English—by which she meant the British—and, say, the French by saying that whereas they believe in equality, we believe in fairness. There are currently three issues where fairness concerns me, and this is one of them. Another is the question of those women born in the mid-1950s losing more than a year’s pension, and another is overseas pensioners in the old dominions or elsewhere who cannot get pension increases. We have to take those issues one by one. I believe that the Government will solve the problem of the extra unfairness for those women born in the 1950s. I want the Government to find the solution to the problem that we are discussing in this debate, and later we can come to the overseas pensioners.

On the subject of this debate, why should we necessarily risk solving the so-called overlap by taking away the higher-level mobility component, rather than taking away what the county council might otherwise provide, which is a far smaller amount? I met a woman in a wheelchair, like the man I met on the underground—he said that he was interested in politics, so I gave him yesterday’s Hansard to cheer him up—who wanted to go to her father’s birthday party and then attend a college course. Those two journeys by themselves, at the subsidised rate of the St Bridget’s minibus, would have exhausted her money if she had not had the mobility allowance.

Obviously people’s circumstances vary, but rather than make a long speech—we have heard rather too many of those this afternoon—let me end by saying that if amendment 42 comes to a vote, I shall vote for it. I trust that the Government will come back and make things plain in the Bill, rather than our having to rely on positive resolutions on statutory instruments or the results of the consultation or assessment that they are currently undertaking.

[Mr Tom Clarke]

I very much regret that the Minister did not give way to me on the one occasion that I asked her to do so, particularly because I had planned to ask her to make an apology. I also invite the Secretary of State—if he would just listen to the debate for a moment—to join in making that apology to the 80,000 people living in residential homes who have been threatened since the comprehensive spending review with the removal of the mobility element of their disability living allowance.

I first raised this matter in a debate in Westminster Hall on 30 November. The Minister responded to that debate, so she cannot claim that she did not know what the issues were. In a moment, I shall talk about the remarkable review that very few people know anything about. People living in residential homes, and their Members of Parliament, can tell her exactly what the situation is, even in the absence of a review. We do not like the idea that 80,000 people have been led up to the top of the hill and marched down again as a result of the various approaches of the coalition Government.

[Jim Shannon]

Does the right hon. Gentleman think that this review has a pre-determined conclusion? Is he as concerned as the majority of Members are that it is only paying lip service to the issues and that it will therefore not deliver what we want to see happening?

[Mr Clarke]

I hope to come to that point later. I welcome the fact that hon. Members from Northern Ireland have played such an excellent part in these debates, both on 30 November and since. The hon. Member for North Antrim (Ian Paisley) made an intervention on that occasion, and his arguments were as sound then as they are today. The Minister has virtually no support for her position. In a moment, I shall discuss the disability organisations.

[Naomi Long]

Does the right hon. Gentleman agree that one of the huge disappointments of the process is that, despite the fact that hon. Members as well as people outside the House and local charities initially supported the principle of welfare reform, they are still unable to support the Bill, even at this late stage, because of the lack of detail and assurance that it offers?

[Mr Clarke]

The hon. Lady makes a very good point.

The people who know the most about DLA know that it is very difficult to secure. Claims have been made, if not by Members on the Government Benches then certainly by newspapers that support the Government, that the system is being abused, but the people who know about abuse are those who experience DLA for themselves. It is not a question of not dealing with that. As a result of the Government’s proposals, people who live in residential homes have experienced uncertainty, inconsistency and pledges being reneged on. Today, when we are being asked to make a specific decision on a Bill that will impact on those people, we have yet again heard a series of vague statements from the Minister that mean absolutely nothing.

To be fair to the Minister, she is not alone. The Secretary of State is equally culpable, as is the Prime Minister.

[Charlie Elphicke (Dover) (Con)]

Will the right hon. Gentleman give way?

[Mr Clarke]

No, I will not. I should like to carry on.

The Prime Minister has given contradictory statements to the House on this issue. In January, he said that

“our intention is very clear: there should be a similar approach for people who are in hospital and for people who are in residential care homes. That is what we intend to do, and I will make sure that it happens.”—[Official Report, 12 January 2011; Vol. 521, c. 282.]

He has been questioned on the issue at Prime Minister’s Question Time on four or five times. On 23 March, when my right hon. Friend the Leader of the Opposition asked him whether there were plans to push through this proposal, he said:

“The short answer is that we are not.”—[Official Report, 23 March 2011; Vol. 525, c. 944.]

Despite that, and despite what we have heard again today—I repeat that I found it completely unconvincing—the intention remains in clause 83 of the Bill that we are being asked to support.

There is also the Red Book. Towards the end of the Budget debate—this has been going on for a long time, as I said earlier—I tried to intervene on the Chief Secretary to the Treasury. Why did he not give way? He did not, but there is at least consistency from Ministers in that respect when it comes to me. He did not give way.

[Charlie Elphicke]

Will the right hon. Gentleman give way?

[Mr Clarke]

I am talking about Ministers. The Chief Secretary did not give way, because I was going to ask him whether in the Budget vote we were being asked to support the page in the Red Book that took more than £470 million away from the people we are discussing today or a section that said we were going to have a review. Answer came there none. We have had statements; we have had a Budget; we have had the Prime Minister’s comments; and we have had the Bill that is being thrown at us today—yet 80,000 people still do not know what the future holds for them. That is wholly unacceptable.

As a result of the measures, 80,000 people will suffer. People on higher rate DLA mobility stand to lose out by £51.40 a week, which will impact on their ability to exercise independence and choice—things that we are told again and again by the Government they support when it comes to community care.

[Charlie Elphicke]

Will the right hon. Gentleman give way?

[Mr Clarke]

No, I am not giving way, so the hon. Gentleman might just as well relax. If he had spoken to as many people in residential care as I have, he might not be so willing to defend the indefensible.

The denial of independence in this proposal means that people will not be able to pay for buses; they will not be able to go to bingo or to football matches. In my constituency, a couple will not even be able to meet each other, yet the Minister had the effrontery to use the word “fairness” in presenting her reply.

Despite what the Minister had to say, we know that disability organisations continue to express grave concerns about the proposals. Indeed, 40 organisations collaborated to compile the “Don’t limit mobility” and the “DLA mobility: sorting the facts from the fiction” reports, which not only outlined the negative impact of the measures on disabled people, but explained why the Government’s rationale behind them is simply incorrect.

On Monday, we heard the Minister refer again to organisations dealing with disability. Let us go through them: Mencap, RADAR, Scope, the United Kingdom Disabled People’s Council and People First. Again and again, those organisations have sought to highlight the failings of DLA—yes, they have said that. However, if the Minister is going to quote them to justify the Government’s actions—she is entitled to use these organisations’ views—she must also be willing to accept their view that they are utterly opposed to the proposals.

I wonder what the Government think of the Social Security Advisory Committee, which is an equally important organisation. Its view was known to the Minister at an early stage. We should remember that this is a very important, heavyweight viewpoint:

“We consider the proposal to remove the mobility component from people in residential care should not go ahead. This measure will substantially reduce the independence of disabled people who are being cared for in residential accommodation, which goes against the stated aim of the reform of DLA to support disabled people to lead independent and active lives.”

Why are the Government rejecting that crucial view?

What do we know about the Government’s plans? We are entitled to ask that question when we are being asked to support this Bill at what is virtually the twelfth hour. We know that they claim that there are overlaps in funding for mobility support for people in residential care, but we do not have the evidence to back up that claim. By seeking to remove the payment of the DLA mobility component to such individuals in order to avoid any possible overlap, the Government are shifting the burden of funding those mobility needs on to local authorities. As we have heard—some of us from Scotland heard it yesterday from representatives of the Convention of Scottish Local Authorities—local government simply does not have the resources. It is quite absurd to say that the Government will cut away this funding and that local councils will make up the gap, when they are telling us again and again that they simply do not have the resources.

17:30

What is more, we do not know how these needs will be properly met if local authority resources are already too stretched to cope. Given that the cost of the Government’s proposal will shift to the social care budget, will the Minister tell us what discussions she has had with the Department of Health, for example? We have not even been told that in the context of this mysterious review. It is a dangerous precedent to replace benefits with social care provision, particularly when social care eligibility criteria have been tightened so that more and more people stand to slip through the net.

Let me turn now to the much-promised review. The Government announced that they would review the proposals and it was hoped that that would offer greater clarity. Such clarity did not emerge today. The review is internal, within a Department; it is not transparent; and it has no terms of reference. There will be no reports to this House of which I am aware about what it actually does. Regardless of the review, all that has happened is a six-month delay to the implementation of the proposal. No disabled people who stand to be affected have been consulted and the findings will not be made public. What sort of review is that? Is the House seriously expected to support that?

We are being asked to decide on an issue about which we do not have the full facts. Even when the Government come to a decision, there will be no scope for an informed discussion, because the details will not be in the public domain. Although the review of the reforms in the Health and Social Care Bill was far from perfect, at least it enabled scrutiny, public participation and transparency—something that is certainly not taking place in this review.

Given what we know, these proposals are in all candour absolutely cruel and stand to the disadvantage of tens of thousands of vulnerable people. No further clarity has emerged today to suggest otherwise and one reason I shall support amendments 41 and 42 is that the Government have been given so many opportunities—from the debate in November to the Budget debate and from questions in the House to this debate today—to make their position clear, but they have failed abysmally to do so. I am therefore obliged to reach the conclusion that these welfare reforms are not meant to take us forward, they are not part of a progressive society and they are not addressing the real problems of the millennium. They are taking us back to the ’20s and the ’30s. The expression “Out of sight, out of mind” came into my head again and again during today’s debate.

[Mark Durkan]

rose—

[Mr Clarke]

I shall give way to the hon. Gentleman, because he has shown an interest in these matters.

[Mark Durkan]

I thank my right hon. Friend for giving way and commend him for his contribution. Is not the situation he describes not even more grotesquely surreal when one considers that, whatever form the review takes, people in local government and those running care homes are being questioned by the Government not about the funding crisis undermining the financial certainty for those care homes, which has people suffocating with worry and dread about what will happen to them, to their relatives and to the staff, but in pursuit of a mythical notion that duplicate payments are being made in respect of the mobility component and contracts with care homes? Should not the Government be addressing the real crisis that is facing care homes and not the nonsense with which they have obsessed themselves?

[Mr Clarke]

As always, the hon. Gentleman has put his case beautifully.

As we head for the Division Lobby tonight, we are asked to choose between the interests of people with disabilities, many of whom have been in residential care for more than 20 years, the concerns of their families and the support of their communities, and the Government’s wish to rush through legislation that in all candour is completely indefensible. Tonight is a real test for the House, and by that I also mean Members of the Liberal Democrat party. I understand that they did not take part in the vote on this in Committee, but they are free to do so tonight. If the Government do what they seek to do and interfere with the lives of the most vulnerable of our fellow citizens in the way that the Bill intends, they do not deserve support and, frankly, people outwith the House, including disability organisations, will be asking about the standing of this Parliament if we allow such a monstrosity to be endorsed in the Lobby. It does not deserve support and I hope that the House will support my hon. Friends’ amendment. I hope also that the Government will think again. I hope that they will think of the shame with which they have burdened themselves and try to redeem themselves from the situation in which they alone have placed themselves.

[Peter Aldous (Waveney) (Con)]

I will be brief, Mr Deputy Speaker, as I know that others wish to catch your eye, and so I shall not take interventions. I am reassured by what the Minister said about the mobility component, but I should emphasise that its proposed withdrawal has caused a lot of worry and anxiety in my constituency. Residents of Shaftesbury Court residential home in Lowestoft are heavily reliant on the mobility component and if it had been simply withdrawn a number of disabled and vulnerable people would effectively have been confined to Shaftesbury Court. Visits to day centres and journeys to colleges would have been a thing of the past for them, and social outings to the cinema, bingo and local sports centres would no longer have been possible.

In addition, visits to the family home would have been increasingly difficult. Not all the residents of Shaftesbury Court come from the Lowestoft area. Some come from further afield, including Ipswich, which is 45 miles away, Canvey island, which is 103 miles away, and even Kent. Such home visits invariably take place only once or twice a year and are very important to the residents and their families, and the removal of the mobility component would have made it very difficult for them to continue. I have heard it said that the local authority or the care home operator would have stepped into the gap and taken on those responsibilities, but under the existing contract at Shaftesbury Court, there is no obligation on either party to do so. Suffolk county council does not have the funds to provide those services and Sanctuary Care, which runs the home, does not have the staff, resources or vehicles to take on the role.

A further issue that needs to be considered, which the Minister touched on, is how Motability would deal with any change for people who currently use their mobility component to purchase a vehicle. This is a complex area and I do not believe that the Government intend to penalise a particularly vulnerable group of people. I am reassured by what the Minister said and I look forward to learning the results of the review, but I urge her not to let down the residents, families and carers of those at Shaftesbury Court.

[Fiona O'Donnell]

I am delighted to contribute to the debate. I want to speak in particular about the review and possible removal of the mobility component of DLA, or PIP as it has become, and the extension of the qualifying period for PIP from three to six months.

I listened carefully to the Minister during the whole debate. I also attended a debate in Westminster Hall where many of the issues that came up today were raised, yet it appears that we are no further on in finding an answer to our questions. The Minister seemed to think that she weakened the Opposition’s case by saying that we agreed with the need for reform of DLA, but the point Opposition Members and our Front-Bench team have consistently made is that, yes, reform is needed but the Government have got it wrong in the Bill. I often understand the rationale and politics in some of the Government’s decisions and proposals, but I really feel that the proposals in the Bill that the amendments address are actually cruel. I thought long and hard about those words.

Constituents have contacted me from cancer, mental health and disability organisations, including the Disability Benefits Consortium, which represents 50 charities and thousands of people with disabilities and their families. Their mission is clear. The DBC document states that it is to use their combined knowledge, experience and direct contact with disabled individuals, people with long-term conditions and carers to ensure that Government policy reflects and meets the needs of all disabled people. But the Government simply are not listening. When so many people have come together, the Minister should take the time, as others in the Cabinet have done, to pause and reflect. We have seen in the movements to oppose some of the measures a unity and solidarity that has never been seen before. Is it not time to pause?

[Cathy Jamieson]

Does my hon. Friend agree that the organisations she has listed would have a great deal to contribute if there was a proper official review, instead of the behind-the-scenes unofficial review, or whatever it was that the Minister described?

[Fiona O'Donnell]

I agree and I thank my hon. Friend for her contribution. I listened with interest to the speech the hon. Member for Cardiff Central (Jenny Willott) made about her amendment. [Interruption.] She is thanking me now, but she may not thank me when I have made my comments, although I shall again try to be careful. It is extraordinary that a member of the Government should support legislation and an amendment, yet time and again blatantly admit that she did not know what the Government were proposing. The hon. Lady kept pointing us in the direction of the Minister, saying that she would answer our questions. She was not in the Chamber for the whole of the Minister’s speech, so I have to tell her that the Minister did not answer the questions.

[Jenny Willott]

I want to make it very clear that I was here for the whole of the Minister’s contribution. The questions I referred to the Minister were about what she was doing. Clearly, as a Back-Bench Government Member, I am not privy to that.

[Fiona O'Donnell]

In that case, I suggest that the hon. Lady holds back her support for the Government until she knows what they are going to do. She spoke to us about the review, but when she looks at the record she will see that she thought it entirely appropriate for disabled people not to play a part in it. The Government ask us to have confidence in this information-gathering review, but its findings will be secret, disabled people will not be part of it and there will be no consultation on it. The hon. Lady thinks those are reasons for us to have confidence. I see Members on the Government Back Benches putting their heads into their hands, and well they may. These are the facts. What is being presented to the House is clearly unacceptable.

[Charlie Elphicke]

I thank the hon. Lady for her great courtesy and generosity in taking interventions, and for her old-fashioned charm in giving way—[Interruption.] Her modern charm.

The issue is not about taking things from people; it is about double-counting, so that we ensure that our scarce state resources are as well directed as possible. Surely that must be the right approach.

17:45

[Fiona O'Donnell]

As someone who became a Member only recently, I would rather that I was not called old-fashioned just yet. The hon. Gentleman completely misses the point.

On how people will be affected by the change to the mobility component of DLA, there is a genuine and general lack of understanding of what residential care is about and the experiences of the people living in it. I was worried that the Minister used the word “overlap” again and again, because we do not know what that will be or how it will be defined. As my hon. Friend the Member for Edinburgh East (Sheila Gilmore) asked, will it be defined on a group basis or individually? We are asked to have confidence that people will have the same choice, flexibility, independence and dignity in their lives, but I do not think that I can do so on the basis of what I have heard from the Minister.

I worked for a number of years in a residential home in Perthshire called Upper Springland, which is owned and run by Capability Scotland. If hon. Members and the Minister in particular want information about what the reform will mean, I suggest they read a report that was commissioned by Capability Scotland and the Margaret Blackwood housing association called “How am I going to put flowers on my dad’s grave?”. I shall not apologise if I become a little sentimental in the next part of my speech because I want to talk about some of the people I met in that residential home.

I do not judge people for not really understanding what a residential home is about because when I arrived at Upper Springland, it was not what I expected. People had not only a front door through which staff could enter after knocking, but a back door. It was entirely appropriate that they came and went without us knowing their movements. Sometimes they did not come home at night, in the way that many of us might have done in our misspent youth, but accessing that kind of information was no business of ours. Many people—I was glad that the hon. Member for Waveney (Peter Aldous) raised this point—had come from as far away as Wales to live in Perth at Upper Springland because it was such a centre of excellence. This is the point at which I need to know what the Minister means by “overlap” because I remember how important it was to Fiona, that young woman from Wales, that she could attend her father’s funeral service.

Upper Springland had several adapted buses as well as individual cars that residents could use. There were regular trips to Perth so that people could access shops and occasional drivers were on duty at the weekend. However, it did not go as far as to provide a service to Fiona that would allow her to travel back to Wales to be at her father’s funeral. Would the Minister see the service at that residential home as duplication? Would she have removed Fiona’s mobility component, meaning that it would have been virtually impossible for her to attend her father’s funeral?

[Stephen Lloyd]

I hope the hon. Lady accepts that my determination and passion about, and commitment to, people with disabilities are perhaps equal even to hers. As I have listened to the debate, and especially to the previous few speakers, I have become frustrated by hon. Members’ assumptions that everything that the Government are doing is bad and for the worst reasons. She cites the example of a funeral as if to intimate that that would not be covered. I think that is scaremongering. I ask that she thinks carefully about the language she uses.

[Fiona O'Donnell]

I absolutely will not withdraw my comment. This is not scaremongering. I am setting out exactly the kind of concern that has been raised in a report commissioned by two of Scotland’s leading disability charities. If the hon. Gentleman thinks that those charities would be as irresponsible as to carry out scaremongering and to frighten the people who form part of their organisations—the people for whom they stand up—it is he who has something to answer for.

[Mark Durkan]

Does my hon. Friend agree that if people should be scared by anything, it should be not her question but the lack of the right answer from Ministers?

[Fiona O'Donnell]

I thank the hon. Gentleman for his support.

Let me talk about a few of the other people who lived at Upper Springland. David had no voluntary movement of his arms and legs, and a little movement of his head. He had no verbal communication. He was completely dependent but he had an incredibly active mind. He was able to communicate through an auxiliary voice and communication system. When he asked to have some swear words programmed into his computer, it caused some discomfort for the rather old-fashioned manager of the residential home as David wandered around the corridors telling everyone to “Eff off!”

David had come from Edinburgh to Upper Springland because of its excellent reputation. He would love to return home on visits to see his family. I personally accompanied David on his last visit to his father before his father died and also to the funeral. I have genuine concerns about that. The Secretary of State shakes his head, but unless we get a definition of what the overlap means, how can we have any confidence? The organisations out there representing people with disabilities do not have confidence in the proposal, so the Secretary of State has no reason to shake his head.

There was another young woman called Joyce who was not only active—she played a sport called boccia and travelled around the world—but had a job for a few hours a week so that she did not lose her benefits, and volunteered in various organisations. To support her to do that, she needed the flexibility to be able to book her own taxi to go to work and to participate in the other activities. There was Maggie, who refused to travel in the transport available at the centre because there was a great big sign up the side of the vehicle which said “Capability Scotland” and she did not see why she should be branded, but going to church every Sunday was very important to Maggie.

These are people I cared about and people I cared for. I fear greatly for what will happen to them and what their future lives will be like if the House does not support the amendments.

I have been critical of the Minister and other Members on the Government Benches, saying that they do not understand what disability and residential care mean. I heard the Prime Minister in one session of Prime Minister’s questions talk about people in residential homes. Then, it was an anomaly between them and people in hospital. Now the Prime Minister seems to acknowledge that residential care is a social model, not a medical model. He has said that the DLA mobility component is not being removed, but the evidence in the Red Book is that it will disappear, so I am not reassured even by a six-month stay of execution.

We must ensure that people continue to have the same choices as people living outside residential care homes. I do not like to talk about people living in the community, because people who live in residential care homes are also part of our community. What evidence is there of an overlap there? Charitable organisations provide access to vehicles, so is the Minister going to assess whether there is an overlap there as well?

People in residential care make the same choices as we do. How many of us do not need a car? We could use public transport, but for those people to buy an outdoor electric wheelchair, which they would not be entitled to under the NHS assessment, makes all the difference to their lives. Why should they not have that choice? It is not just about Motability cars. It is also about people who have entered into contracts and loans to pay for those electric wheelchairs. All these months on from the Westminster Hall debate, we still do not have an answer from the Minister about what will happen to those people.

A further topic that the Minister has not addressed—the hon. Member for Cardiff Central had great hopes that she would talk about it today—is the situation in respect of the devolved Governments of the United Kingdom. If the Minister has any expectation that there will be regulation of residential care homes or a duty placed on them to provide a service to people with disabilities, if she thinks she can compel the NHS to start providing more mobility adaptations to people with disabilities, and if she believes in the universality of the benefit, how can she ensure that people in Scotland will always retain the same benefits as people in the rest of the United Kingdom? She did not clarify that, so I would like to give her the opportunity now to intervene and answer that question. [Interruption.] No?

[Mr Reid]

Will the hon. Lady give way?

[Fiona O'Donnell]

All right; someone else will speak.

[Mr Alan Reid]

(Argyll and Bute) (LD): Surely the hon. Lady, as a Scottish Member, knows that it is up to the Scottish Parliament to decide on devolved matters. That is what devolution is all about. It is up to the Scottish Parliament to decide whether it provides that benefit or not.

[Fiona O'Donnell]

I know that. I am questioning whether the Minister understands that that is the situation we find ourselves in and the impact it will have. Will the review include Scotland and the other devolved areas of the United Kingdom?

[Maria Miller]

Yes, we do talk with the devolved Administrations, but I say to the hon. Lady that the point everyone is making is that many other hon. Members would like to speak.

[Fiona O'Donnell]

I absolutely take heed of that and apologise if I have taken too much of the House’s time, but I feel passionately about this issue. I will bring my remarks to a close by saying that I hope hon. Members will walk through the Lobby with us to vote in favour of the amendments that my colleagues and hon. Friends on the Front Bench have tabled.

[Mr Reid]

I had wanted to speak tonight on my concerns about the proposal not to make any personal independence payment for the first six months, but I will speak about that later. Further to what the hon. Member for East Lothian (Fiona O'Donnell) has just said, my understanding of the Government’s position is that there is an overlap, and it is perfectly correct that where an overlap has been identified we ought to have a review. It is also important to stress that we are not abolishing the mobility component for people in care homes by voting against the amendment tonight; we will be voting to give the Government the power to make regulations.

[Margaret Curran]

Will the hon. Gentleman give way?

[Mr Reid]

I am sorry, but there is no time.

What concerns me about the Bill as it stands is that those regulations will be made by the negative procedure, which does not give Parliament the absolute right to scrutinise and vote on them. I have put my name to amendment 74, tabled by my hon. Friend the Member for Cardiff Central (Jenny Willott), which proposes that the regulations should be made by the affirmative procedure.

[Maria Miller]

Given the strength of feeling on this matter, from my hon. Friend and others, I am happy to give a firm undertaking that the regulations will be made under the affirmative procedure to ensure that we get the debate that I know the House wants on the matter.

[Mr Reid]

I am extremely grateful to the Minister for that—I wish that every time I spoke for a minute I could bring about a change in Government policy.

In the few minutes remaining, I want to talk about the proposal not to pay any PIP for the first six months. What concerns me is that that will impact severely on people who have a sudden onset of a very disabling condition, such as a stroke, cancer or the loss of a limb. Thankfully, that happens only to a relatively small number of people of working age, which means that any savings the Government would make would be very small. However, for someone in that unfortunate position the first six months is often when the costs are greatest. They and their families have to adjust to the sudden reality of coping with a disability. During those months, people are often faced with extra costs such as special aids, adaptations to their homes or frequent trips to a specialist hospital that might be far from where they live. Adaptations to the home are up-front costs that need to be paid within the first six months. Depending on their condition, those people might face many other costs.

Another relevant issue is that until PIP is awarded, other benefits such as carer’s allowance are not available. Therefore, I urge the Government to look carefully at ways of taking those circumstances into account and see whether they can find a way to make financial help available for people in that position so that they can cope with the extra costs they face in the six months after the onset of the condition.

[Sheila Gilmore]

I want to speak briefly to the question of three and six months, because the Government have said that people will be able to find other forms of assistance. What they mean by that is means-tested assistance, but many people will not qualify for it, because their partner might earn as little as £7,500 a year or have—

18:00

Debate interrupted (Programme Order, 13 June).

The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the amendment be made.

Question negatived.

The Deputy Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

Clause 79

Required period condition: further provision

Amendment proposed: 44, page 56, line 45, leave out ‘6’ and insert ‘3’.—(Margaret Curran.)

Question put, That the amendment be made.

18:00

Division 295

Ayes: 239

---

Labour: 221
Democratic Unionist Party: 5
Scottish National Party: 5
Plaid Cymru: 2
Independent: 2
Social Democratic & Labour Party: 1
Alliance: 1
Green Party: 1
Liberal Democrat: 1

Noes: 294

---

Conservative: 253
Liberal Democrat: 39

Clause 83

Persons receiving certain services

Amendment proposed: 42, page 58, line 40, at beginning insert—

‘(3) The condition is that the person is an in-patient of a hospital.

(4) ’.—(Margaret Curran.)

Question put, That the amendment be made.

18:16

Division 296

Ayes: 239

---

Labour: 223
Democratic Unionist Party: 5
Scottish National Party: 5
Plaid Cymru: 2
Conservative: 1
Social Democratic & Labour Party: 1
Alliance: 1
Green Party: 1

Noes: 295

---

Conservative: 254
Liberal Democrat: 39

Schedule 14

Repeals

Amendments made: 20, page 165, leave out line 25 and insert—

‘In section 37(1)—(a) in paragraph (a)(i), “6, 7”; (b) paragraph (ab).’

Amendment 21, page 165, line 35, at end insert ‘and (1A)’.—(Chris Grayling.)

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

On a point of order, Mr Deputy Speaker. In the last hour, the BBC has announced that the Chancellor will tell the City of London at the Mansion House dinner tonight that he has decided to sell off Northern Rock, currently in state ownership, and has rejected the options of flotation or selling it as a mutual. Instead it will be sold in a private sale. Has there been any indication that the Chancellor will make a statement in this House before the speech in the City of London? Do you agree that Parliament and the public should hear about this first, before the City of London Mansion House dinner?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I have been given no indication by the Treasury Bench or any Department that there is to be a statement this evening. I am sure that the Treasury Bench will have heard the right hon. Gentleman’s concerns.

[John McDonnell]

On a point of order, Mr Deputy Speaker. We have just finished the Report stage of the Welfare Reform Bill, but we have failed yet again to reach major parts of the Bill, particularly amendments on the cap on benefits, which I totally oppose and think are a disturbing element of the Bill. As the Leader of the House is here, may I say to him through you, Mr Deputy Speaker, that we are exhibiting to the general public that the House is not working if we are not reaching major parts of such an important Bill. I would hope that the Government would consider pausing, as they did with the NHS Bill, and thinking again in the light of today’s debate.

[Mr Deputy Speaker]

The programme motion—

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

rose—

[Mr Deputy Speaker]

I call Mr Duncan Smith.

[Mr Duncan Smith]

Further to that point of order, Mr Deputy Speaker. It might be of assistance to the House to remind those who were not in the Committee that every single clause was debated there, and we have also had two days on Report, which is almost unprecedented.

[Mr Deputy Speaker]

This seems to be a continuation of the debate on the programme motion, which was decided on Monday. It was agreed by the House so this is not a matter for the Chair. Let us now move on, in the short time we have, to Third Reading.

Third Reading

18:30

[Mr Duncan Smith]

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

I am conscious that we have only half an hour, so I will try to make some progress. A great deal has been debated, but I am happy to take a couple of interventions. I recognise that some others on the Back Benches would like to say something because they did not get in earlier, and I think we ought to leave them some time.

The Bill allows us to start dealing once and for all with the welfare dependency we inherited. Just the other week we learned from the Office for National Statistics that there are now nearly twice as many households in the UK where no one has ever worked as there were in 1997, and today there are nearly 2 million children growing up in workless households—children with no positive role models who can teach them the benefits of work. This entrenched worklessness is the issue, and is the product of a broken welfare system that takes away up to 96p in every pound earned as people increase their hours in work. It is a system that shunts people from employment programme to employment programme, never looking at them as individuals but as collective groups. It is a system that provides disabled people with outdated and complex support that often fails them when they most need it. By the end of Labour’s term in office, that system left us with income inequality at its highest level since records began, despite the billions Labour spent. The backdrop to this social breakdown was the inheritance of an economy that was absolutely on its knees when we came into government.

[Sarah Newton (Truro and Falmouth) (Con)]

Given the shameless scaremongering in the Chamber today at Prime Minister’s Question Time and during this debate, can the Secretary of State assure us that people recovering from cancer will not have their benefits taken away from them?

[Mr Duncan Smith]

I was not going to pick up on that, but given that my hon. Friend has asked me, I will say that the reality, which is clear, is that the Government inherited the employment and support allowance reform from the previous Government. It was this Government who exempted cancer patients on chemotherapy in hospitals; they were not exempted by the previous Government. Our record on this is therefore quite good. As for the exchange at Prime Minister’s Question Time, it is also important to say that if somebody cannot take work, they will remain on the support group or be moved to the support group, where they will continue to receive full support indefinitely—and it will not be income-related.

[Stephen Timms]

rose—

[Mr Duncan Smith]

One moment, one moment. Let me finish, all right?

In reality, therefore, people on the work-related activity group will already have been seen to be able to do some work with some assistance—that is the key—and of course, as has long been the case, those benefits are income-related. It is also important to note that the figure that Macmillan produced today—of 7,000 people losing everything—is not altogether accurate, because—[Interruption.] No, no, because 60% of the people it was talking about will continue to receive some form of support; they will not be losing all their money. We will not be moving those on chemo. We are looking to review the situation under Professor Harrington to see how much further we can go, but the fact is that if someone is not capable of work and is too ill, they will be on the support group.

[Stephen Timms]

Can the Secretary of State confirm, however, that people receiving oral chemotherapy and oral radiotherapy are in the work-related activity group, and that if they are halfway through their treatment and it gets to a year, they will lose all their contributory benefit?

[Mr Duncan Smith]

Not if they are on income-related benefit. Of course they will absolutely continue to get the income-related support. The point is that this— [Interruption.] Wait a minute. The right hon. Gentleman knows very well—he should stop playing silly games—that we have asked—[Interruption.] No, no—[Interruption.] Grow up, for God’s sake! He has to recognise that we have asked Professor Harrington to review that, because that is a later form of chemotherapy, and he will report back. Whatever his recommendations are, we have said that we will accept that. The right hon. Gentleman knows that, and I suspect that he should have said it when he got up at the Dispatch Box. [Interruption.] I think I have done that; I just wish that the Opposition would not play politics with people’s fears and concerns. They made no arrangements at all for cancer patients on ESA, so we will take no lessons whatever from them.

We are now paying as a result of Labour’s mismanagement of the economy, which is causing all the problems and which is why, even in this Bill, we are having to find savings, with an eye-watering £120 million a day going to pay off the interest alone on the debt that the last Government left us. It is because of the deficit reduction plan that Britain has put in place that we have managed to keep our borrowing costs low and comparable to Germany’s rather than to those faced by Portugal, Ireland or Greece. These need to be seen in context, but I want to—

[Frank Dobson (Holborn and St Pancras) (Lab)]

On a point of order, Mr Speaker. To remain in order on Third Reading, is it not necessary to talk only about the content of the Bill, not things external to it?

[Mr Speaker]

That is correct. On Third Reading, all speakers must focus on what is in the Bill, not what is excluded from or outside it.

[Mr Duncan Smith]

I agree, Mr Speaker, which is why I have done nothing but refer to the reasons for the Bill, the rationale behind it and what is in it, hence the cancer point that we have talked about.

Let me proceed to the issue of the benefit cap, which I do not think the Opposition ever wanted to get to. Our reforms are fundamentally about fairness: fairness to recipients, but also—and too often forgotten—fairness to the hard-pressed taxpayers who have to pay for those on benefits. Across a range of areas, we have made changes designed to ensure that people on benefits cannot live a lifestyle that is unattainable to those who are in work. Let us take the benefit cap—an issue on which the Opposition have got themselves in a bit of a mess. Just two days ago, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who is now in his place, told the House:

“The cap on overall benefits…is an important part of the legislation”.—[Official Report, 13 June 2011; Vol. 529, c. 491.]

However, it is now clear that his own party is completely divided on the matter. Even late last night, the Opposition tabled an amendment that they knew they would not be allowed to vote on—a starred amendment—just so that they could posture and appease their Back Benchers, who are on the wrong side of the debate entirely. [Interruption.] No, no, the Opposition know very well that they had days to table that amendment, but they did not bother—I suppose that the right hon. Gentleman will say that he did know that there was a time limit on tabling amendments. The reality is that the Opposition are opposed to the cap. They should be honest and say that they do not want it. Indeed, even their amendment would have knocked out the entire effect of the cap.

Let me turn to conditionality, another issue in the Bill.

[Simon Hughes]

Before the Secretary of State leaves the benefit cap, let me say that I understand the reason for a national benefit cap. Does he accept, however, that colleagues across the House are concerned that in London, because of the cost of housing, there is a special issue that deserves further debate? I wonder whether he would be willing to meet colleagues from all parties, local government, the Mayor, housing providers and the Housing Minister so that we can get the problem sorted for all those with an interest in London.

[Mr Duncan Smith]

I have always said that the door is open to everybody to discuss the effects and how some of them can be ameliorated—or not, depending on what the issues are. The answer is therefore yes—as a London MP, I should join that delegation too—although I still believe that we have the right policy, because it is about balancing fairness for those hard-working people who pay their taxes who often feel that those beyond work are not working themselves.

[Sheila Gilmore]

Will the Secretary of State give way?

[Steve Baker (Wycombe) (Con)]

Will the Secretary of State give way?

[Mr Duncan Smith]

I will give way only once or twice more, and I give way now to my hon. Friend.

[Steve Baker]

I am most grateful to the Secretary of State. Will he join me in reminding the House that, by dint of great effort, in 2011-12—[Interruption]—I assure the hon. Member for Glasgow East (Margaret Curran) that this comes from the HMRC website, not the Whips—the pay-as-you-earn tax threshold will be just £7,475 a year? Will he also remind the House that the people paying tax—that is, paying tax to pay the benefits that others are in receipt of—are actually poorly paid and that a year’s pay on the national minimum wage is just £12,300? Will he join me in recognising that it is an issue of social justice that we should introduce the benefits cap?

[Mr Speaker]

Order. May I just remind Members that interventions should be brief? I know that the Secretary of State and others will be conscious that other people want to speak in the debate.

[Mr Duncan Smith]

I agree with my hon. Friend. That point is also powerfully made by the fact that nearly half of all those who are working and paying taxes fall below the level of the cap. It is important to achieve a balance of fairness. I recognise that there are issues, and we have looked at ways in which the process of change in housing benefit can be done more carefully, for example. This is not about punishing people; it is about establishing a principle that fairness runs through the whole of the benefit system.

[Sheila Gilmore]

The Secretary of State wishes to present the Bill as being about people who are workless or feckless, but hard-working taxpayers who suddenly fall ill and are unable to claim the personal independence payment for six months could well be excluded from benefits because they have been savers. Is that fair?

[Mr Duncan Smith]

If the hon. Lady had looked at what the cap covers, she would know that those on tax credit will be exempt, as will those on DLA, widows and others who are in difficulties. The cap is about those who we believe should be able to go to work but are not doing so. Of course, this would just be all stick if it were not for the fact that the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) had recently introduced the biggest back-to-work programme this country has ever seen, to support those in greatest difficulty. Universal credit is about helping to improve people’s incomes when we get them back into work with a bigger incentive. We are striking a fair balance by doing all that while also placing some expectations on those who are waiting to go to work.

That is also the point of the next bit, which is about conditionality and sanctions. The Bill places a level of responsibility back into the system by strengthening our conditionality and sanctions regime and requiring all claimants to accept a claimant commitment setting out their individual responsibilities—a sort of contract that will enable them to understand that they have certain obligations and that there are certain things that we are obligated to do for them. That is fair. Many claimants I have spoken to out there are completely confused about what they should or should not be doing.

When those responsibilities are not met, we will have the power to apply a robust set of sanctions, which will be made clear to the claimant at the beginning. Opposition Front Bench who were in the previous Government will know from going round jobcentres that claimants often still profess, even at the last moment, to having no knowledge of the fact that they will face sanctions if they do not comply. So we are going to let them know early exactly what the sanctions will be. As with universal credit, they will then have a clearer understanding of what they are meant to be doing.

The next area, which we have dealt with in some detail, involves the personal independence payment. We are bringing more responsibility to the system, but I believe that we are also improving support for those who are able to work and for those who are not. Disability support is an issue. The Bill makes critical changes to the system, and the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller) made a sterling effort to explain them in Committee and on Report.

The changes to the current system of disability support will ensure that disability living allowance is no longer awarded on the basis of subjective and inconsistent decisions. I hope that all hon. Members will recognise that this is a bold attempt to bring this area of benefit up to date and to ensure that those who are not getting what they should will do so, and that those, however many there are, who are getting too much or not the right amount will get that adjusted as well. The truth is that this will be based on their ability to live their lives. I agree with my hon. Friend the Minister about the checks involved. The DLA will be replaced in total by a personal independence payment, which will be based, for the first time, on regular and objective assessments of need.

This brings me to perhaps the biggest thing in the Bill: universal credit. This lies at the heart of all our reforms. It involves the principle that it should no longer be possible for people to be better off on benefits than in work, or for people to fear moving into work. I say “fear” because people are often concerned because they simply cannot tell whether they will be better off or worse off in work. No longer are we going to try to pick the number of hours that somebody should be working; rather, we will say to them, “You must make that choice, in line with work, relevant to your caring responsibilities and all the other issues that affect you.” This is a bold reform to help people to improve their chances and give them the assistance they need. That goes alongside the Work programme, as I said earlier, which will support all those people who are trying desperately to make the best of their difficult conditions and get back to work.

[Frank Dobson]

In view of the complexities encompassed in the universal credit, does the Secretary of State seriously believe that the Government are capable of producing a computer system that will work properly from the start?

[Mr Duncan Smith]

The right hon. Gentleman refers to complexities—he and I have discussed many issues before—and this present system is so complex that if he were in the situation of many of the people in his constituency, he would find it incredibly difficult to know whether or not they are better off. The principle behind the Bill is that we must try to achieve that. If he wants to know my honest opinion, I believe that we will be able to make it happen. We are working hard to make sure that this medium-level change to IT works out. I recognise it as such a change. I have had conversations about it with his Front-Bench colleague, the right hon. Member for East Ham (Stephen Timms). Our views may differ slightly, but the reality is that the process has to happen; IT development is part of the process. I give the right hon. Gentleman as much of a guarantee as I can that we will deliver it—right and on time.

Some 2.7 million households will be better off as a result of the universal credit and almost 85% of the gains—I hope that Opposition Members will support this aspect—will go ultimately to the bottom 40% of people in the income distribution. I would have thought that they wanted to support that. My concern throughout the debates—I now want to bring my comments rapidly to a conclusion—has been that it is not at all clear what exactly the Opposition support and what they do not support. By their actions and by what they say, there is no commonality.

The Opposition tabled more than 200 amendments in Committee, but voted on them only 16 times. They have complained that we did not allow enough time for consideration of issues on Report and then, on the day before yesterday, they proceeded to talk for more than an hour on amendments that they did not even push to a vote. If they had not done that, they would easily have had a chance to debate some of these other areas.

When it comes to spending commitments, the Opposition do not seem to know whether they are coming or going. They would have us believe that they would have taken responsible decisions on the economy, but if they had had their way in Committee, the amendments would have entailed extra spending commitments running into billions of pounds. Not once have they said that they approve of any of the changes or the savings within the scope of the Bill. It was all the more surprising when, the other day, the right hon. Member for Birmingham, Hodge Hill complained—irony of ironies—that the housing benefit bill is apparently set to increase in the course of this Parliament. Imagine that—the man who watched while housing benefit spending crashed through the roof, nearly doubling in 10 years, and was set under his Government to rise by a further £2.5 billion in this Parliament alone, has started to tell us that somehow we are not being harsh enough. What a contrast with his hon. Friend the Member for Westminster North (Ms Buck) in her place beside him, who claimed that our changes to housing benefit

“would lead to social cleansing on an unprecedented scale.”

Frankly, they need to get their act together, as they do not seem to know whether they are in favour or against cuts—or whether they simply do not agree with anything.

The right hon. Member for Birmingham, Hodge Hill wants to speak, so I shall finish. These measures have always been about welfare reform that forms a contract with the people of this country. It is a promise on our part to provide a simpler, fairer system that protects the most vulnerable and makes work pay; and a promise on the part of those who are claiming benefits to play their part, to look for work whenever they are able to do so, and to take some of the responsibility that the right hon. Member for Doncaster North (Edward Miliband)spoke of just two days ago—although half of his party does not agree with him. As I said before, this is about fairness to recipients and fairness to the hard-pressed taxpayer. On that basis, I ask all Members to get behind this Bill, and perhaps the Opposition will make up their minds about whether or not they are in favour of this reform.

18:49

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

I am grateful for the chance to speak on Third Reading this evening. I am glad that the Bill has finally come back to the House and I wish I could say that I thought the Bill’s passage through this place had improved it. I cannot with justice say that. We said from the outset that we wanted to approach this question in a spirit of national consensus.

The Opposition are proud of our record of delivering welfare reform in this country. I am glad that the Secretary of State referred to statistics from the Office for National Statistics that were published the other day because they were the same statistics that confirmed that by 2008 the claimant count was half the level we were left by the previous Government back in 1997. The number of people claiming unemployment benefit for more than 12 months in that year was down to a quarter of the level we inherited in 1997, so, no, it is not a surprise that his own welfare Minister, Lord Freud, said that our record of delivering welfare reform was remarkable.

On Monday night, I set out how I thought that further reforms should be made to toughen the responsibility to get back into work and to enshrine a culture of work in every community in this country. Throughout the passage of the Bill, we have sought to table amendments that would have improved it and allowed it to leave this place for the better. The Government have refused to listen and have refused to accept advice and amendments. The Bill presented to this House might have started with an instinct for compassionate Conservatism in action, but we have in front of us tonight a law that cuts benefits for people with cancer when the Minister says that they will not be ready to work by the time that cut hits them.

I said that we would not oppose the Bill on Second Reading to give the Government some space to improve it. We back welfare reform that gets people back to work and that simplifies the benefit system. We support the principle of universal credit and we support sanctions for those who are not trying hard enough to get a job. We support a cap on benefits if it saves public money, but this is where the agreement ends, not least because this Bill is so cold and so hard that it ends a tradition of compassion in the welfare state that we should conserve and not consign to history.

Once upon a time, this Secretary of State knew about compassion. In 2009, he said that the welfare state is a symbol of a compassionate and civilised society. I think that he has honourable intentions, but he has not presented us tonight with a Bill that is in an honourable state. It is, frankly, a disgrace that the Government have not found additional time to debate cuts to contributory ESA that would cut benefits to people with cancer before they are fully recovered. My right hon. Friend the Member for East Ham (Stephen Timms) asked for additional time from the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), on Monday, but he refused to give the House that time.

To single out for the proposed cuts benefits that would allow cancer patients to go on receiving the benefits they need is unacceptable. It is unacceptable because it is an attack on compassion. It is unacceptable because we cannot ask people who are still battling cancer to start filling out job applications. It is unacceptable because most of us in the Chamber tonight will either have personal experience or families with experience of the truth that it takes more than courage to beat cancer and finding a job is not part of any recovery programme I have heard doctors recommend. Worse, this is a benefit that people have actually paid in for. Now, when they need it most, it is being taken away.

Ciaran Devane, the chief executive of Macmillan Cancer Support, said:

“Many cancer patients will lose this crucial benefit simply because they have not recovered quickly enough…This proposal in the Welfare Reform Bill will have a devastating impact on many cancer patients. We are urging the government to change their plans to reform key disability benefits to ensure cancer patients and their families are not pushed into poverty.”

Even at this late stage, I ask the Secretary of State to speak to his friend the Prime Minister and to sit down with cancer charities, disability groups and other campaigners to try to get this sorted out. I ask him to take heed of what Owen Sharp, the chief executive of the Prostate Cancer Charity, has said this afternoon:

“The changes to disability benefits will mean that a significant number of people with cancer will be left without vital financial support at a time when they need it the most…The current proposals in the Welfare Reform Bill will discriminate against cancer patients and should be amended.”

Perhaps the Government would be on stronger ground if only a tiny minority of people were affected, so the House is right to ask how many people will be hurt. On 16 May, the Government told us: 77% of people in the work-related activity group will not have recovered from their condition after a year, yet that is when their benefit will be cut. How on earth can that be justified? The Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell gave us his answer in Committee when he said that

“this is a sensible measure”.––[Official Report, Welfare Reform Public Bill Committee, 3 May 2011; c. 655.]

It is a decision that is, in his words, “not about recovery times”.

Perhaps I could understand that argument if I felt that the Department had its spending priorities straight, but the truth is that its message is so harsh that it has had to hire media trainers to teach the Minister with responsibility for disability, the Under-Secretary of State for Work and Pensions, the hon. Member for Basingstoke (Maria Miller), how to spin her lines. The Department has passed to me documents that detail the media training bill for her, which equals three and a half months’ worth of somebody’s employment and support allowance, which would be cut. It is a shame that her expensive eloquence was not more convincing this afternoon. Cutting benefits for people with disabilities and hiring media trainers instead—that tells us all we need to know about this Secretary of State’s priorities.

[Mr Duncan Smith]

Will the right hon. Gentleman give way?

[Mr Byrne]

I am afraid that I will not—[Interruption.] No, because the Secretary of State talked for well over the time we agreed through the usual channels this afternoon and he is now wasting—[Interruption.]

[Mr Speaker]

Order. Mr Rob Wilson, you have just toddled into the Chamber, do not shout across the Chamber in that way. [Interruption.] No, no; do not argue the point. [Interruption.] Order. I am telling the hon. Gentleman—[Interruption.] I do not need any expression; I am telling him what the situation is.

[Mr Byrne]

Thank you, Mr Speaker. I say to Liberal Democrat Members tonight that today is the deadline for advice on motions to their conference and one has found its way to me this afternoon. They should listen to what their grass roots are saying—that they should support the amendments that we tabled on Report. The Liberal Democrats should not be fooled by the idea that to succeed in politics one has to rise above one’s principles, and they should not betray the principles of Lloyd George, Beveridge and Keynes for the political convenience of the hour. They should show us, show people and show their grass roots that like us they have heard the voices of the vulnerable, who are calling on them to act—and to act tonight.

As if the cuts for cancer patients in clause 51 were not bad enough, they are rendered worse by the determination of this Government to leave people on disability benefits as prisoners in their own homes. On Saturday morning, my constituent Stephen McClaren came to see me. He has cerebral palsy, attention deficit hyperactivity disorder, learning disabilities and he gets these mobility payments in order to help him to see his mum, go to the gym and live the quiet miracle of a normal life. These plans have filled him with fear. He and 80,000 disabled people are now worried sick about what the Government have in store for them.

The charities say that the changes are “fundamentally unfair”, so what is going on? The Prime Minister has said that the DLA mobility component will not be cut for those in residential care homes—that is what he told the House on 23 March—but the Budget book says that cuts to the DLA mobility component will total £475 million from people in residential care by 2015. Who is telling the truth? We now know that there is a review, but today is the Third Reading of the Bill. The Government want to change the law, but what is their policy? It is a secret. The Minister for spin, the hon. Member for Basingstoke has said, with her new expensive eloquence, that the Government

“have no plans to publish the findings of this work”.—[Official Report, 9 May 2011; Vol. 527, c. 1003W.]

Tonight, we are supposed to give the Government powers to abolish the benefit when their evidence for reform is to be kept secret. What a shambles.

The Bill violates every basic test of compassion and, just as bad, it also fails the test of fostering ambition to work. I know that the Secretary of State is trying as hard as possible to introduce reforms that will help to make sure that work pays, but he cannot honourably say that and give that guarantee for anyone with children because he cannot make up his mind how much parents are going to get for child care under universal credit. We are being told that that credit will be abolished tonight with no sense of what is going to come in its place.

In February, the Secretary of State was unable to say what the Government’s plans are. He told the House, not once but twice—most recently on 24 March, I think—that he would tell us, here in the House before the Bill got through the Committee stage, that he would publish his child care policy. Leaked documents from the DWP say that the cuts could disadvantage 250,000 people, cutting support almost by half, yet tonight we are at Third Reading and the Secretary of State still has not told us what his plans are for child care.

There are new penalties in the Bill for savers. There are new penalties for the self-employed. The Bill was supposed to be a milestone in the evolution of the Government and the compassionate Conservatism they espoused, but tonight they have been found out. We have a law to hurt cancer patients and a Bill to trap the disabled, confusion for parents and penalties for savers. Whether people are ill, disabled or working hard to do the right thing, the Government are determined to attack the benefits they paid to receive. We should stand up—

19:00

Debate interrupted (Programme Order, 13 June).

The Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the Bill be now read the Third time.

19:00

Division 297

Ayes: 288

---

Conservative: 249
Liberal Democrat: 37

Noes: 238

---

Labour: 224
Scottish National Party: 5
Democratic Unionist Party: 3
Plaid Cymru: 2
Social Democratic & Labour Party: 1
Liberal Democrat: 1
Alliance: 1
Green Party: 1

Bill read the Third time and passed.

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

Cultivation of Genetically Modified Crops

That this House takes note of European Union Document No. 12371/10, a Commission Communication on the freedom for Member States to decide on the cultivation of genetically modified crops; Document No. C(2010) 4822, a Commission Recommendation on guidelines for the development of national co-existence measures to avoid the unintended presence of Genetically Modified Organisms (GMOs) in conventional and organic crops; and Document No. COM(10) 375, a draft Regulation amending Directive 2001/18/EC in relation to the ability of Member States to restrict or prohibit the cultivation of GMOs in their territory; and supports the Government’s view that the Commission’s legislative proposal raises significant concerns and should not be supported by the UK.—(Angela Watkinson.)

Question agreed to.

Kidderminster Enterprise Zone

Wednesday 15th June 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Angela Watkinson.)

19:13

[Mark Garnier (Wyre Forest) (Con)]

I thank the Minister for his time this evening to hear the case for the Kidderminster enterprise zone bid. I am pleased to be able to hold this debate because I am passionate about the future of the local economy, not just in Kidderminster or even in Wyre Forest but in the whole of Worcestershire.

What we are debating this evening is more than just Kidderminster’s enterprise zone bid. It is about how the Worcestershire local enterprise partnership has come together with enthusiasm and considered the many submissions from across the county, and how the business community has worked through the options and come up with what it believes is the best possible enterprise zone bid for the whole county. I am delighted to see so many Members present, and members of the business community in Worcestershire have come down this evening to show their support for this incredibly important bid.

Before I speak more specifically about Kidderminster, I want to speak about Worcestershire as a whole. I do this because it is important to remember that it is the Worcestershire LEP that has looked carefully at the county and decided that the best option for the county—not just for Wyre Forest—is the Kidderminster business enterprise zone. It is important that it becomes an enterprise zone because it is a strong and early bidder for a county-wide enterprise partnership that will bring together business, civic and third sector leaders as an effective advocate for the whole county.

Worcestershire has around 560,000 residents, and across the county there are a number of strong but localised industrial specialisms. We have agriculture and food processing in Wychavon and the Malvern hills, research and development in Malvern and automotive-related industries in Bromsgrove and Redditch.

[Karen Lumley (Redditch) (Con)]

Does my hon. Friend agree that although the bid from Kidderminster is great, we must all work together with the Worcestershire LEP to ensure that in future years other areas have successful bids, including my constituency?

[Mark Garnier]

My hon. Friend makes a good point; this is about the whole of Worcestershire and it is incredibly important that we work together for this important opportunity.

[Harriett Baldwin (West Worcestershire) (Con)]

I thank my hon. Friend and neighbour for securing this extremely useful debate. Does he agree that developing the Kidderminster enterprise zone would be extremely beneficial, particularly for those in the north of my constituency, because it would be so easy for them to travel to Kidderminster for work?

[Mark Garnier]

My hon. Friend makes a very good point. The whole point about an enterprise zone is that it will not only help people in the immediate vicinity, but attract many people and a lot of economic activity from a fairly wide area—a point I will develop later in my speech. The economy of the south of the county looks to the rural and research-based drivers in her constituency, and the north of the county looks to the black country as its engine for growth. It is for this reason that strengthening the advanced manufacturing base in the north of the county will draw down the manufacturing prosperity of the black country into Worcestershire.

The issues Worcestershire faces are important and the LEP has already got to grips with the major economic priorities and challenges that the county will face in the coming years. Crucially, private sector employment shrunk over the past decade by 1%. This trend was more marked in the north of the county, with Kidderminster seeing an 8% reduction in private sector employment and Redditch seeing a 14% reduction. That said, Redditch has a greater proportion of manufacturing jobs in the region, which is encouraging.

Moreover, work by the West Midlands Regional Observatory shows that Kidderminster and, to a lesser extent, Redditch suffer from problems relating to longer-term restructuring and job losses from the contraction of their industrial base, lower employment rates and higher claimant levels, especially among young people, and a higher proportion of the working-age population having no qualifications at all. To deal with those issues, the LEP sees restructuring the local economy away from public sector jobs, supporting and growing the tourism industry, and building on the industrial assets in the north as the key priorities. It was with this in mind that the Worcestershire LEP identified Kidderminster as the unanimous option for the Worcestershire bid for an enterprise zone.

The town of Kidderminster was once the hub of the world’s carpet industry, with some 20,000 people employed in that key industry as recently as the ’70s and ’80s. Carpets declined as the preferred floor covering, although I am pleased to say that that trend is now in reverse.

[Karen Bradley (Staffordshire Moorlands) (Con)]

I am listening carefully to what my hon. Friend is saying. It is a great relief to me, as I represent a Staffordshire constituency, that we are no longer under a regional development agency, as what works in one place in the west midlands does not necessarily work in Staffordshire, so I am delighted that we now have the Staffordshire and Stoke-on-Trent LEP. However, I have to stand up for Minton floor tiles and say that, although carpets in Kidderminster are important, floor tiles are equally so.

[Mark Garnier]

They certainly are, but I must say that one cannot get a better carpet than those made in Kidderminster. My hon. Friend makes a good point about Advantage West Midlands, which is now disappearing. The LEPs are incredibly strong because they bring together enterprise and business to try to structure what they need economically, and the way in which some enterprise zones in the west midlands have come together to take advantage of that opportunity and build on it is very encouraging.

I am pleased to see my friend and co-chair of the all-party group on the economy of the west midlands, the hon. Member for Dudley North (Ian Austin), in the Chamber in support, because it is incredibly important that we work together across the whole of the west midlands to ensure that we have a strong local economy.

The carpet industry in Kidderminster, as I said, employed 20,000 people, but now we have fewer than 2,000 working locally in that once-great sector. Having said that, I must note that Kidderminster produces some of the finest carpets on the planet, and that is very encouraging. Kidderminster and the wider Wyre Forest now find themselves a post-industrial area, with a handful of significant employers but 5,000-plus small and micro-businesses. Local unemployment in Wyre Forest stands at 4.6% overall, but the figure I find most upsetting is that of the 18 to 24-year-olds not in education, employment or training, the so-called NEETs, who number 9.1% against an equally tragic but lower 7.2% for the wider county.

The Kidderminster and wider Wyre Forest area is made of stern stuff, and the local district council is keen to promote growth. In 2009, Wyre Forest district council created a private-led regeneration project known as the ReWyre initiative, which is helping to drive forward the economic growth of local businesses in Wyre Forest and, combined with the new LEP private enterprise, taking a firm lead in driving forward economic regeneration.

Owing to that already strong local drive and the early establishment of the Worcestershire LEP, the opportunity for a Kidderminster enterprise zone was seized unanimously. The proposal is to establish an enterprise zone, the South Kidderminster business park, in an area broadly defined by two main arterial roads through the district, the Stourport road and Worcester road business corridors. There is already significant economic activity in those areas, and, although some 3 hectares of previously speculatively developed site is available for immediate occupation, a further 44.5 hectares of brownfield site is available for redevelopment and the specific needs of new and relocating businesses to the enterprise zone.

It is anticipated that that redevelopment alone will bring some 4,000 new jobs to Kidderminster and Wyre Forest, and importantly not just the people of Kidderminster but the wider county of Worcestershire will benefit from those jobs. It is anticipated also that the enterprise zone’s local stimulus will benefit many existing businesses and create new jobs in the wider area, particularly in the towns of Stourport-on-Severn, Bewdley and Redditch.

[Ian Austin (Dudley North) (Lab)]

I congratulate the hon. Gentleman on securing this debate and commend him for his valuable work for and great contribution to the all-party group that we have established for the regional economy. Does he agree that it is not just the towns of Stourport, Bewdley and Kidderminster that will benefit from the establishment of the enterprise zone, but the black country towns of Dudley, Sandwell, Walsall and Wolverhampton? If greater enterprise, more jobs and prosperity can be brought to areas such as Kidderminster, that will only benefit the constituents I represent just a few miles away in the black country, and that is why I assure the hon. Gentleman that the bid will receive my support and, no doubt, that of other black country MPs.

[Mark Garnier]

I am incredibly grateful to the hon. Gentleman for that intervention. It shows the cross-party support for the local economy in the black country and the west midlands, and that we are all coming together to try to support the local economy, to move things forward and to deal with the issues that face us. They include slightly stagnant economic growth, but we will deal with that through local enterprise partnerships and business expansion zones.

The development’s knock-on effect will be incredibly important. The Stourport road corridor runs through one of the most deprived wards in England and Wales, Oldington and Foley Park, where almost 8% of residents are on jobseeker’s allowance and almost 30% of 18 to 24-year-olds are NEETs. There will be not only an immediate impact on local unemployment, but a long-term change of prospects for the large numbers of families who have been hit by the long-term decline of the carpet industry—families whose unemployment can be measured not in weeks, months or years but, in far too many cases, in generations.

Specifically, it is anticipated that growth in the Kidderminster business park will come from a mix of new businesses moving to the area, the expansion of existing businesses benefiting from the local economic stimulus and, importantly, the creation of new businesses, all of which will take advantage of the local mix of good and available skills, existing supply-chain businesses, the availability of land and existing property for immediate use and, of course, the incentives available through the enterprise zone.

The existing and well established ReWyre initiative and the Worcestershire LEP, working together in partnership, will manage and implement the enterprise zone. Not only will they draw up a flexible and sustainable investment plan for the zone, but crucially they will create a single, strong marketing identity, developing a vision for the zone and the district for the next one or two decades. South Kidderminster business park already benefits from an up-to-date local development framework, with the Wyre Forest core strategy having been adopted in December last year. The core strategy already identifies the fact that South Kidderminster business park will offer attractive, accessible and high-quality employment locations. The area also provides a strong and clear basis for the designation of local development orders, simplifying planning requirements and thus accelerating development opportunities.

What is important about the Kidderminster business zone bid is that there are qualified, work-ready people willing to take on work immediately. I recently spoke to a local employer who was advertising for new staff and who told me that he was inundated with good-quality candidates, all of whom he could have taken on. That is as good an indicator as any of a willing and ready work force available to meet the needs of new businesses in Kidderminster.

The Wyre Forest and Kidderminster area is an incredibly wonderful place to live. At that all-important final meeting when the managing director of a company seeking to relocate to a town such as Kidderminster has to discuss moving home with his or her family, I am sure that the family members will relish the opportunity of living in an area with outstanding natural beauty, fascinating towns, excellent nearby shopping, good schools, and a wide range of activities to keep any family healthy and happy. [Interruption.] And good carpets, yes.

I am here to urge the Minister to do everything he can to help Kidderminster’s bid to pass successfully through the selection process. The ingredients for success are already there. We have an available and willing work force ready for immediate employment. We have available space for new businesses to take up immediately. We have a local development plan already in place supporting South Kidderminster business park. We have a local business organisation—the ReWyre initiative—already in place to drive the Kidderminster enterprise zone forward. We have the unanimous support of the local enterprise partnership behind Kidderminster. We have the will to rebalance the local economy towards private sector employment.

Crucially, an enterprise zone in Kidderminster will help to enable our third sector partners who work in more challenging areas to prepare the long-term unemployed for long-term employment. It will raise aspirations, drive economic regeneration and give breadth to the wider Worcestershire economy. I invite the Minister to visit, because I am sure that he will agree that there is no better candidate for a business expansion zone than Kidderminster.

19:27

[The Minister of State, Department for Communities and Local Government (Greg Clark)]

How can I resist such an invitation when my hon. Friend the Member for Wyre Forest (Mark Garnier) has extolled the virtues of Kidderminster, and indeed Worcestershire, in such lyrical terms that I am surprised that every Member present is not changing their holiday plans to spend the summer there?

I sincerely congratulate my hon. Friend on securing this debate on enterprise zones in general, and Kidderminster in particular. I was enormously impressed by the chorus of approval that greeted him when he got to his feet, not only from Members from Worcestershire, welcome though their support is, but from all over the country—Staffordshire, Dudley, Brighton, Yorkshire and Oxfordshire. If he is so skilled in putting together such a supportive chorus for the Kidderminster bid, I think it will fare well.

I have to be careful in what I say; my hon. Friend places me in a difficult position. He will understand that the application process is still open—it closes later this month—and that it would be invidious of me to favour the claims of Kidderminster above those from other parts of the country. However, he has put the merits of Kidderminster forcefully on the record and into my mind.

[Ian Austin]

I am delighted to hear the Minister accept the invitation to visit Kidderminster. When he does that, would he prepared to make a short detour—just 12 miles or so up the road—to visit Dudley to examine the case for Government support for measures that will bring enterprise, new industries and new jobs to my constituency so that we can see growth right across not only Worcestershire but the black country?

[Greg Clark]

I would be very happy to extend my trip to include the black country as well as Worcestershire.

Let me take the opportunity to set out some of the background to the process that has resulted in such an enthusiastic bid from Kidderminster. Like my hon. Friend, I pay tribute to and recognise the breadth of support that he has been given. The fact that Mr Woodman and his colleagues from Worcestershire have come to the House today shows the depth of support for the case that my hon. Friend mentions.

The coalition agreement, which was published a year ago, sets out two overriding aims for the Government’s term of office. The first was to get the economy back on track. The second was to achieve an historic shift in power and influence from central Government to local communities. What we are discussing encapsulates both aims. It is about living up to economic potential and realising that by giving communities their head and the ability to drive growth themselves.

This policy addresses the situation that we had before the election. My hon. Friend referred to the artificial constraints that divided some areas of the country and forced others into an uncomfortable relationship. The previous approach of regional development agencies being imposed from the top down clearly went against the grain of our historical geography and of how people live their lives locally. To that extent, it suppressed rather than enhanced the ability of different parts of the country to establish their economic identity in the same way that they have always had different characters. Part of the purpose of this degree of decentralisation is to empower different parts of the country to prosper economically.

[Andrew Bridgen (North West Leicestershire) (Con)]

Has the Minister given any consideration to allowing a local enterprise partnership to have more than one enterprise zone at the same time if they are of a small size? Such an approach would suit an enterprise zone in the town of Coalville in Leicestershire in my constituency.

[Greg Clark]

My hon. Friend makes a powerful point. I did not include Leicestershire in my list of places that are represented. One characteristic of local enterprise partnerships is that they are of different sizes. We have made it clear in the guidance that we expect an LEP to make one nomination, but I hear what he says and other parts of the country, especially areas that have larger LEPs, have made a similar point. I will certainly reflect on that.

The purpose of LEPs is not just to reflect, though they do, the economic geography of the areas that they cover. In contrast to the previous approach, whereby areas had to conform to regions that were administratively determined in Whitehall rather than locally, when my colleagues and I considered how we could establish LEPs nine months ago, we gave careful thought to what areas they should cover and came to the decision that we should give people the chance to nominate the most appropriate areas and to specify the natural connections. I feel justified in giving people that possibility, because LEPs have been formed that frankly would not have been invented in the Government. They represent a reality on the ground that does not conform to the uniformity that tends to come from the central Government approach.

My hon. Friend the Member for Wyre Forest is vigorous in his promotion of the Worcestershire local enterprise partnership. I think also of north-east England, where the Tees valley—my home town of Middlesbrough and the surrounding towns—has asserted its unique characteristics. It wants to have a strong voice and to take advantage of the opportunities that have been presented, which in many cases were submerged in the old region of the north-east, important though the connections are across that wider area. Other LEPs recognise the natural economic connections between parts of the country, even though they may be in different counties. For example, the Coast to Capital LEP covers the area from Croydon down to Brighton. The area has a lot in common and businesses see it as important.

Recognising the appropriate areas was the first step, but the second was to ensure that local enterprise partnerships were genuine partnerships—combinations of business, local communities, the voluntary sector and social enterprises. All the bids that we approved represented strong partnerships, with a degree of enthusiasm that has been striking. There is greater enthusiasm than can be obtained from a body that is a creature of government. The fact that the bid my hon. Friend described enjoys such strong business support is testament to how energy can be tapped if business and communities get the chance to work together.

The approach that we are taking in encouraging local enterprise partnerships to make decisions locally in the best interests of their population is reflected in other parts of our policy. In planning, we are introducing reforms inspired by the work that my hon. Friend the Member for Henley (John Howell) performed for the party in opposition, which will give local communities the opportunity to influence and shape their area. That is not just about housing, important though that is. Communities everywhere in the country want to have regard to their future economic prosperity, and it is important to give them the chance to promote a local plan and neighbourhood plan that reflect their best traditions and their potential, rather than make them conform to a high-level regional strategy that does not represent and reflect the different localities within it. My hon. Friend the Member for Wyre Forest said that his local council has its core strategy in place, which puts it in a strong position to take advantage of the new planning powers, including neighbourhood plans. In some areas, business will want to take a leading role in those plans along with residents, and I dare say that may be the case in Kidderminster.

Through the new homes bonus and reforms to the community infrastructure levy, we want to ensure that some of the benefits of growth stay within the community, so that they can be used to reinforce that growth and ensure that it is genuinely sustainable. People who live in an area must have a genuine reason to say yes to growth.

Up and down the country, the local enterprise partnerships that we have established are already setting a vision for the future. They are driving growth, planning for new infrastructure and seeking to attract jobs and investment. I know that the Worcestershire LEP, in particular, is in the vanguard of the movement nationally.

Let me say a word about enterprise zones themselves. As my hon. Friend knows, they were announced in this year’s Budget, and we want to see 21 of them across England. We want them to be hothouses for growth and places in which we create the conditions for the public and private sectors to work closely together to create new jobs, set up new firms and attract new investment. They are there to help places with strong potential to grow to do so quickly, and he has made a strong case for Kidderminster having that potential. There is to be no hanging about, and we will make the decisions during the summer. It is important that the enterprise zones are up and running with good speed, so that the opportunities for the areas in question and for the country are maximised. I know that if it is successful, the enterprise zone bid that his LEP has made will bring with it an enthusiasm to get on with it.

On what an enterprise zone comprises, first, as my hon. Friend knows, it will involve a 100% relief from business rates, worth up to £275,000 over a five-year period. All the business rate growth generated by the zone for a period of at least 25 years will be kept by the LEP for reinvestment in the wider area. Greatly simplified planning zones will be in place through local development orders, making applications quicker and more certain for developers, and the Government will ensure that superfast broadband is rolled out across the zones.

That is the set menu, the standard elements that will be common to all local enterprise zones. However, the fact that they will be driven and promoted by the LEPs means that those elements can be adapted and supplemented to reflect the particular needs and priorities of the area. There will be an opportunity to consider the use of tax increment financing to support the long-term viability of a zone. Some aspects of local government funding are being reviewed in the local government resource review that is taking place.

We are determined that the local enterprise partnership should nominate an enterprise zone for consideration. That is the right approach, rather than Ministers centrally deciding where a zone will be. That should be a local decision.

Some enterprise zones were nominated in the first wave, but my hon. Friend makes a case for the second wave. Let me say something on the timetable for that. He will know that formal bids are due by 30 June. We hope to announce the successful LEPs during the summer. He will know that it would be inappropriate for me to go any further and to anticipate the outcome of that process, but it is obvious, from what he said and from the support that he has had from colleagues on both sides of the House, just how much support his proposal attracts. That is encouraging.

My officials are already working closely with the Worcestershire LEP and Kidderminster representatives on plans for the area. One thing that we have been particularly impressed by is the strong sense of local partnership between elected members, including councillors, businesses and the voluntary sector. The bid is therefore a strong one, but we are expecting other strong bids from other areas of the country—this is a competitive process. Whatever happens, the enthusiasm and volition to encourage growth by doing things differently locally does not rest entirely on the bid. The LEP has many powers available to it—for example, to create a simplified planning zone, or to promote discounts in business rates for certain types of businesses in particular areas. It can go ahead with such initiatives even in anticipation of an enterprise zone, and take other opportunities whether or not its bid is successful.

My hon. Friend has put a very strong case firmly on the record, and he does not have too much longer to wait before he hears the result of his passionate advocacy in the House today.

Question put and agreed to.

19:42

House adjourned.

Westminster Hall

Wednesday 15th June 2011 Westminster Hall

Wednesday 15 June 2011

[Mr Gary Streeter in the Chair]

SMEs (South of England)

Wednesday 15th June 2011 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Prisk.)

09:30

[Caroline Dinenage (Gosport) (Con)]

Thank you, Mr Streeter, for allowing me to raise this important topic. As a director of a small business based in the south of England, I fall squarely into a category that necessitates me to declare an interest in the subject matter. However, holding such a position also allows me to share some first-hand experience with hon. Members.

Small and medium-sized enterprises hold the key to a successful private sector-led economic recovery in the UK. At a recent UK Trade & Investment maritime sector meeting, I learned that the proportion of UK exports accounted for by SMEs was 5% below the European average. If the UK were simply to raise that level to the average, it would generate a staggering £43.6 billion of additional GDP. That is enough to wipe out the UK’s current account deficit two times over. It is important to keep that in mind when discussing SMEs. These businesses may be small, but they have truly enormous power to drive our economy.

In previous debates in this Chamber, I have highlighted factors that afflict small businesses and limit their growth. In particular, I raised my concerns about the creeping trend of larger businesses putting unfair influence on supply chain companies, such as by extending their payment terms, and the continuing difficulties small businesses face in trying to secure funding from banks. That context is important as we should not view the Government’s role in isolation from all the other factors affecting small businesses.

I strongly believe that the Government “get it” when it comes to SMEs, and they have made it clear that they support their growth and longevity. They continue to put pressure on the big banks to increase their lending to small businesses. They have reinvigorated the enterprise finance guarantee scheme and established a number of new, highly targeted grants. It is clear that the Minister and his Department are working extremely hard to put UK companies on a firm footing.

When the Minister visited my constituency, he will have seen a site called Daedalus, a former naval airbase that now serves as home to a number of small aviation and marine-based businesses. This vast site is being promoted as a potential enterprise zone by the Solent local economic partnership, which will also submit a regional growth fund grant application to support its redevelopment as a hub for business innovation for the entire region. I hope the Minister appreciates the importance of the redevelopment of that site for the future prosperity of the constituency.

It is clear that the Minister also understands the need for the job market to end its over-reliance on the public sector. The need to encourage growth, commerce and manufacturing as part of a private sector-led recovery is at the centre of the Government’s plans, and I commend that approach. After all, it is far more sustainable to grow our way out of a recession than to spend our way out of it. However, the need to rebalance the economy in favour of the private sector applies beyond the boundaries of the north and the midlands. It is a concern to my constituents and many of my colleagues here today that only one project in south-east England succeeded in the first round of regional growth fund applications, as opposed to 14 in the north-east. The Government’s analysis of the first round RGF grants makes for interesting reading. The maps provided on the Department for Business, Innovation and Skills website show a stark contrast between the money diverted north and support for projects in the south.

I represent one of a cluster of constituencies in the Solent area that, together, share all the characteristics of towns and cities in the north of England: public sector dependency, low average wages, low levels of educational attainment and areas of multiple deprivation. On most measurable scales, including unemployment and business growth, Gosport is well behind some of the areas further north that continue to enjoy strong economic support from the Government.

If we were to plonk Gosport in the middle of the north, it would be the second worst performing local authority area in the entire north-east in terms of public sector job dependency. It would also have the third worst ratio of jobs to people in that region, with less than half a job per working adult, whereas the English national average is 0.8% of a job. With its number of active businesses per 10,000 residents being just 25.5, Gosport is the 13th worst performing area in that regard in the entire UK. Almost 35% of working adults in the constituency are employed by the public sector, which is one of the highest such dependency rates in the entire country, and that is before counting the thousands of people who work in the armed forces, especially the Royal Navy, and who call Gosport their home.

Gosport is at least as reliant on public sector jobs as cities further north, yet it appears to have been excluded from wider Government support. Certain Government measures to promote the growth of the private sector have also been denied to the south-east as a whole. I am, of course, speaking of the national insurance contribution exemption for start-up businesses. I cannot help but find that decision a little unfair as research by the Forum of Private Business shows that 51% of businesses in the south-east considered taxation to be the greatest barrier to growth, which is the highest proportion in the UK.

[Penny Mordaunt (Portsmouth North) (Con)]

I congratulate my hon. Friend on securing the debate. Although Portsmouth fares slightly better than Gosport, we are still described as a northern town on the south coast. Does my hon. Friend know that we fall far short of the Treasury’s projections and ambitions for the national insurance contribution holiday? Although that might have been the right policy to start with, it is not having the desired effect. Now would be a good time to expand the criteria for qualification to include not just different geographic locations and start-ups, but small businesses that hope to expand substantially over the next few years.

[Caroline Dinenage]

My hon. Friend makes an excellent point. It is worth noting that between 2007 and 2010 the south-east experienced the highest increase in deprivation in the UK. Will the Minister tell us what criteria the Government used in making the decision to exclude the south-east from NI relief? Government responses to that question usually state that the focus is to support areas that have traditionally relied more heavily on public sector employment, and they are usually thought to be the north and the midlands. That same description, however, could also be applied to a number of constituencies in the south, including mine. Furthermore, the exclusion of the south-east has a doubly negative effect on Gosport, as it creates a disincentive to business to choose to locate in the area—which should be a prime area for regeneration according to the Government’s own objectives—over more affluent areas of the north that are indiscriminately provided with Government support that they might neither need nor warrant.

[David Simpson (Upper Bann) (DUP)]

May I declare that I have an interest in the business sector in Northern Ireland? I congratulate the hon. Lady on securing this debate. Earlier in her speech, she mentioned banks and credit to small businesses, and I am sure she will share my concern about some of the findings of recent research papers on banks and the money being loaned to small businesses. The bankers have stated that they never promised to meet the Government targets; they say that they only promised to make the money available. Leading economists say nothing has changed in the manufacturing sector. In fact, over the past 12 months under this new Government, we have not seen any change from the banks, and small businesses, which are the backbone of the UK economy, are suffering greatly.

[Caroline Dinenage]

The hon. Gentleman makes a strong point. Yesterday, I met a small business owner in my constituency who is on the brink of losing his business and his house. Against a property that is worth £500,000, the bank will only lend him £50,000, which goes nowhere near far enough towards supporting him in trying to keep his business and his family together.

Although the Government clearly recognise that there are pockets of need in the south-east, it is thought to be extremely difficult to target national insurance investment at a sub-regional level. That may be the case, but such difficulties are not insurmountable. My constituents should not have to accept not receiving help they badly need purely because it is felt that giving them that help would be too difficult.

[Penny Mordaunt]

On that point, we know from questions tabled to the Treasury that the costs of providing that help, either at unitary authority level or district level, would not be so prohibitively high as to stop such a scheme going ahead.

[Caroline Dinenage]

That is excellent news, and I know my hon. Friend has done a lot of work on this issue, for which I am very grateful.

I now want to highlight the significant benefits the regional growth fund has brought to certain regions. In the north of England, the RGF has so far created 10,750 jobs directly and 10,916 jobs indirectly, and in the midlands it has so far created 7,923 jobs directly and 37,809 jobs indirectly. By comparison, in the south-east and east of England combined, the RGF has created just 427 jobs directly and 361 jobs indirectly. It is therefore clear that the south gets next to no support from the RGF or enterprise zone designations. Moreover, firms in the south have to pay higher national insurance contributions than firms in other parts of the country. For me and the majority of my constituents—who work in a peninsula where there is, on average, less than half a job per working adult—that is a bitter pill to swallow.

Statistics can also misinform. If anyone looked at the data for private sector jobs created in Gosport, they would be led to believe that we are supporting a growing economy. Unfortunately, that “growth” comes as a direct result of public sector elements of the Ministry of Defence being privatised. For example, Fleetlands, which is the biggest employer in my constituency, has been privatised, becoming Vector Aerospace. That company is now in the private sector, but there are no new jobs. In reality, every year in Gosport more businesses go bust than are created. Officials must look beyond simple numbers and qualifying criteria when making decisions about which areas are in the greatest need of help. The south as a whole has benefited from the creation of large numbers of private sector jobs in the past. It should not be punished for being successful in that regard, and nor should those areas in the south that need help be excluded from Government support solely on the basis of geography.

I understand that the apportioning of Government funding to support business cannot be seen as a local issue. Of course Government funding must focus on achieving wider goals, and must be allowed to maximise the benefit of the schemes it supports for the greatest number of people. I also understand that the RGF and enterprise zone applications are subject to independent scrutiny, which is as it should be. However, I believe that many people have a misconception that the south of England is a universally prosperous region. I hope that I have made it clear that Gosport is certainly not universally prosperous, and I am sure that my colleagues would all be able to provide evidence of areas within their own constituencies that are desperately in need of regeneration.

Despite the difficulties private partnerships in my area face, I have been very impressed by some of their achievements. One such partnership received support from NatWest and Lombard to fund the purchase of a large milling machine worth nearly £500,000 by two Gosport businesses, Marine Concepts Ltd and the Curvature Group. This new joint venture has allowed UK companies to produce components for a wide variety of sectors, including marine, renewable energy, aviation and motor sport. Those sectors had previously required the services of businesses as far afield as Australia in order to meet their requirements. Such investment is creating real jobs as well as preserving the UK’s reputation as a centre for innovative manufacturing. That has been achieved by advanced manufacturing businesses successfully repositioning themselves from serving the Royal Navy to serving private clients across the world.

However, for every such partnership, there is another business struggling with the structural deficit left behind by a radically changed market, which in the case of Gosport has been caused by the contraction of the Royal Navy. Such businesses are willing to adapt, but they are unable to do so without help. For the past 700 years, Gosport—and, in fact, the whole Portsmouth area—has relied on the military to support its entire economy and employment. Much like a mining town or manufacturing centre, the contraction of our armed forces has been intrinsically linked with the falling fortunes of the local economy. However, when the size of the military declines, areas that are dependent on the military are not provided with the same level of Government protection as mining or industrial towns in decline.

Gosport needs to be seen not only as an area with economic problems, but as an area with the potential to reinvigorate itself, given the right encouragement. All the businesses situated on the Daedalus site understand the potential for growth. They are not looking for Government handouts. What they need are a few key measures that can help them create a viable business and the employment that comes with that.

First, they need certainty over the Daedalus site’s future. Historically, the site has been owned by many different Government agencies. There is a runway, yet small aviation businesses have sometimes not been allowed access to the site. Those businesses have not had the incentives to invest, nor the certainty that if they were to invest, they would be allowed to grow and flourish. They also need targeted tax and planning concessions, improved infrastructure and a level playing field; in other words, everything that an enterprise zone would provide.

All the businesses based in or around the Daedalus site are looking to expand, and they are prepared to spend money to do so. I spoke to the owner of one of them yesterday, who said that he was prepared to invest many thousands of pounds to take over a decrepit old building and turn it into a modern, state-of-the-art business premises, yet he had only been able to secure a 10-year lease from the regional development agency. Offering such a short lease is just not good business.

Many of the businesses on the site want to source local people to undertake apprenticeships or engage skilled engineers who are leaving the armed forces. The social benefits to my constituency—where 20% of 16 to 23-year-olds are not in education, employment or training—are clear, and this would help many young people realise their potential.

The lesson is obvious. If businesses feel secure enough to invest and have potential orders waiting in the wings, they will expand. Enterprise zones can create that security, while entrepreneurial business people have never had problems in generating business.

The Daedalus site also lends itself perfectly to the wider qualifying criteria for an enterprise zone. Its green credentials are fulfilled by providing opportunities for local employment, rather than necessitating long commutes by car. That would also have the benefit of relieving the pressure on the infamous A32, the only major road from Gosport that leads into the heart of the peninsula. The pressure placed on a beleaguered transport system burdens my constituents with hours of congestion, particularly during peak periods, as traffic struggles through bottlenecks, and 20,000 people have to out-commute to get to work every day. Gosport is the largest town in the UK without a railway station. Therefore, Gosport not only needs inward investment; it deserves it. That would finally allow the area to realise its full potential, and I am confident that it would also act as a beacon for investment from the private sector.

If I may stray briefly beyond discussion of the south to make a broader national point, I would also welcome clarification from the Minister about how applications for regional growth funding and enterprise zone status are co-ordinated. As he will be aware, the RGF is administered by an independent board under BIS, but the enterprise zone project is administered by the Department for Communities and Local Government. Some people involved in putting forward bids have said they are confused about how applications for both schemes by a single local enterprise partnership will be viewed. I would welcome a reassurance from the Minister that both Departments involved have a clear understanding of how each scheme complements the other, and I ask him to consider providing guidance on how dual applications can be dealt with, and to say whether such an approach would prejudice the likelihood of success. I might add that the application deadlines for both schemes are, after all, on the same day.

[Penny Mordaunt]

Does my hon. Friend agree that it would also be helpful if the Treasury were to allow a relaxation of competitive tendering rules? She identified the regeneration of Portsmouth harbour, which would benefit not only Gosport and Portsmouth, but Fareham and other nearby towns. However, that regeneration can only happen if the Treasury enables those rules to be relaxed. Clarification on that issue would also be helpful.

[Caroline Dinenage]

My hon. Friend makes an excellent point. As she says, many parts of the Portsmouth harbour area would benefit from that type of help.

I believe the case for business improvement measures in my constituency is compelling—indeed, overwhelming —as does the Solent LEP. I am certain that there are colleagues in Westminster Hall today from constituencies across the south of England who feel the same about projects in their own areas. Therefore, I would welcome a reassurance from the Minister that, first, he is aware of our concerns, and, secondly, he will do all he can to support and encourage the growth of small and medium-sized businesses in the south.

09:49

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate the hon. Member for Gosport (Caroline Dinenage) on securing this debate, which raises important issues. As she said, they are important because small businesses are vital for jobs, sustainable growth and prosperity, and because it is crucial that our region does not become stereotyped by the Government or others to our disadvantage.

As the hon. Lady demonstrated by citing the statistics about her own constituency, the truth is that there are wide variations in employment, wage rates, small business formation and success within regions as well as between them. The particular needs of our region are not the same everywhere in the region. As well as being supportive of small businesses in general, policy needs to be sensitive to the particular circumstances of each local economy and its small businesses.

Judging by the experience of my constituency and local economy, we could be forgiven for thinking that the Government do not want economic growth in our region at all. Oxford is an incredibly vibrant economy, with lots of small businesses that have spun off from or are servicing our successful universities and hospitals, the Mini plant, and publishing and other high-tech enterprises, but some decisions that the Government have taken are limiting rather than encouraging growth, small business success and job generation.

One of the biggest constraints that we face in Oxford is housing and developable land. I have no doubt that our local economy could achieve much more economic growth if there were more houses for people to live in and more premises for small businesses, but one of the first things that this Government did was to scrap the south-east plan and set their face against any change to the Oxford green belt, thereby blocking both much-needed housing that was already being planned and the Magdalen college science park extension. The tight local authority boundaries that we have in Oxford give the neighbouring local authorities an absolute veto over our expansion, a veto that they do not hesitate to exercise, even on land of very limited ecological or amenity value.

The second hammer blow that I have to refer to is the incredibly ill-judged and damaging measures aimed at cutting the number of people coming from overseas to learn English here. That is a problem not only in Oxford, but in Bournemouth, Brighton and other southern coastal towns, and it will, I fear, inflict incalculable damage on English language courses and schools that have been generating about £1.5 billion for the UK economy, much of it in southern England. That all adds to the bureaucratic minefield for these kinds of educational businesses and colleges, and the Government’s much-vaunted moratorium on red tape clearly does not apply here. Much of the complexity, as English UK has said,

“results from the UK Border Agency trying to legislate in educational matters which are not its proper remit and where it neither has expertise nor has shown any great inclination to listen to those who do.”

As well as the economic and reputational damage that the changes will inflict on the wider international education sector in which the UK has an important strategic competitive advantage, they will hit the micro-businesses of many host families who supplement their income by accommodating overseas language students.

I come to the third hammer blow. The hon. Lady referred to the regionally discriminatory holiday on national insurance contributions for new businesses, and asked about the rationale for that. I have had a look at the Her Majesty’s Revenue and Customs website where there is a question and answer section. It asks:

“Why does the Holiday not apply in London, the South East and the East?”

and the answer given is:

“The scheme is intended to promote the formation of new businesses employing staff in those countries and regions most reliant on public sector employment. The proportion of jobs in the public sector is higher in other countries and regions than it is in the Greater South East (London, the South East and the East).”

Even if we accept the logic of that approach, it is obvious that the regional criterion is unfairly broad-brush because it must mean that new businesses in local economies in other parts of the UK that have low public sector employment will get the help, whereas areas in the south that are very reliant on public sector jobs, such as my own constituency and that of the hon. Lady, will not.

One of the biggest problems facing small businesses is access to credit, and the failure to hit the targets for bank lending to small and medium-sized enterprises under Project Merlin will hold back small business growth at the very time and in the very places where we need it most.

Business rates are another huge problem for small businesses. I acknowledge that the Government have tried to provide some help, but because of the high rental values in many parts of the south, business rates, which are based on them, tend to be higher, and therefore the costs of setting up and operating a small business have a double whammy effect on the cost of premises.

I could say a lot more, but I know that a number of other speakers are keen to get in. I have not yet mentioned the knock-on effect of cutting the teaching grant to universities by 80% and the trebling of fees, the alienation of other small business organisations by the preference given to the British Chambers of Commerce as co-ordinator of the local economic partnerships, the damage of cuts to investment in the transport infrastructure of the south—to which the hon. Lady also referred—and the interesting recent Institute of Directors report, which showed small businesses benefiting less from Government changes to business taxation than larger ones.

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

Was the right hon. Gentleman hoping to get on to the £500 million investment by BMW in his constituency, and the important help that the company has cited as coming from the Government to enable the investment?

[Mr Smith]

If we are being absolutely honest here there is an important continuity in automotive policy concerning the building blocks of that investment. The hon. Gentleman may seek to make a party political point but I will not. We all have to pull together for the success of the automotive industry, and I am enormously proud of what BMW has achieved with the Mini, and of the strength of the partnership with the work force and the local community, which is making such a success of the initiative. I have already referred to the Mini plant as an important source of business for small enterprises in our area. Those enterprises benefit from the business that BMW generates in the supply chain, and from the spending power of the work force.

I conclude by underlining that it is wrong to see small business support as a zero-sum game between the south and other parts of the UK. The south is an engine of the UK economy, and the wealth that we generate benefits directly and indirectly other parts of the country, just as we will benefit from successful regeneration and from tackling deprivation elsewhere. We need a proper sustainable growth strategy for small businesses in the south, as in other regions, which focuses on improving skills and infrastructure, cutting unnecessary red tape, nurturing enterprise, keeping down taxes and overhead costs, and ensuring that the planning system facilitates rather than strangles sustainable growth and small business formation. By initiating this debate, the hon. Lady has done us a particular service by calling to wider attention the danger that complacent generalisations about the state of the small business economy in the south risk killing the geese that are laying the golden eggs.

[Several hon. Members]

rose—

[Mr Gary Streeter (in the Chair)]

Wind-ups will begin at 20 minutes to 11. Seven colleagues are seeking to catch my eye, so by my rough calculation that is about six minutes each if we are to get everyone in. I am leaving it to you to regulate yourselves.

08:50

[Anne Marie Morris (Newton Abbot) (Con)]

Thank you, Mr Streeter. I shall endeavour to be brief. I am here, in large part, to give voice to the south-west, where we have a particular problem with support for small and, I would argue, micro-businesses, which are the lifeblood of our economy.

I should first pay tribute to what the Government have already done to help us. They have reduced corporation tax; we have the national insurance holiday for new businesses, and the extension of the small business rate relief is very much to be welcomed. Given that my cause is very much that of micro-businesses, which make up two thirds of my local economy by number of businesses and 15% financially, I am really pleased about the micro-business exemption from domestic regulation. That is exactly the sort of measure that we should be seeing more of.

Perhaps it is helpful to clarify what I mean by a micro-business. We talk about small and medium enterprises; one passing reference was made to a micro-business. The Minister might be keen to consider defining micro-businesses in legislation so that we can support them. Micro-businesses have been defined in various different countries precisely so that they can be given particular help and support, including tax carve-outs and exemption from regulation. That happens in Australia and in some states in the US. At the moment, we in the UK largely use the EU definition of a micro-business, which is a business with up to 10 employees and a turnover of €2 million. For this country, that is huge. I do not believe that it is an appropriate definition for this economy.

I submit, on the basis of analysis that I have undertaken of Office for National Statistics figures and am happy to share, that a more helpful definition would be an organisation with fewer than five employees and a turnover of less than £250,000. That way, the Government could specifically target help at such businesses, and it would not be quite as expensive as targeting a larger group. That group would include plumbers, electricians and other businesses that are crucial to any rural or deprived urban economy. It would also, inevitably, cover start-ups, which are essential whether they grow to be successful or remain in a steady state. I argue that micro-businesses will create the most jobs, which we badly need. In America, it is claimed that 90% of new jobs after the downturn were created in that sector.

I suggest that we need to reduce the cost and complexity that apply to micro-businesses. Tax is an obvious issue, and the Office of Tax Simplification has done good work, but we should consider more carefully the concept of a flat tax. It would be simple to apply. The suggestion that national insurance and income tax be integrated, even if that is simply a matter of administration, is welcome, but I urge that consideration also be given to VAT. Thresholds are not consistent across Europe, and many small businesses get to a cliff. There is a disincentive to do more than a certain amount of business, because businesses that get to the threshold must spend an awful lot of time earning an awful lot more money before they break even. There must be a way to solve that problem.

I welcome the Treasury’s reduction in the small profit rate. The Institute of Directors tax burden report for 2011 identified it as particularly helpful to micro-businesses, which it defines as businesses having fewer than five employees. However, the Institute of Directors says that it is a one-off win and that micro-businesses will not derive the same benefit as small and medium-sized businesses. It would be good to review what we do with the small profit rate of corporation tax.

The enterprise allowance for jobseekers is an excellent idea—clearly, some new micro-businesses will be started by the unemployed—but limiting it to those receiving jobseeker’s allowance, although a good start, might restrict the benefit brought by the scheme. To illustrate, I bring to the Minister’s attention an initiative at Portsmouth university, which works with graduates to support them, helping them bid to start new businesses and using local business people to mentor them. The university then works with the angel group to see how it can support graduates, but there is no tax incentive. Perhaps one way forward is to look at the enterprise investment scheme and consider whether we can create some form of EIS-lite.

Employment is the biggest barrier for most micro-businesses. I am pleased by the proposal to allow tribunals for unfair dismissal to kick in only after two years. That is welcome. I am also pleased by the suggestion of an employers’ charter. I point out to the Minister that way back in the 1970s, small businesses were given certain carve-outs from employment legislation. There may be lessons to be learned, and the matter might be worth reviewing.

Health and safety is the other big bogey in the room. Lord Young has done a first-class job. The exemptions from risk assessment that he suggests for low-risk businesses are to be welcomed. I strongly urge the Minister to consider negotiating with the Health and Safety Commission. At the moment, businesses with fewer than five employees are exempt from some requirements, but there is a risk that the commission will change its mind. It is important.

Perhaps I have given the Minister food for thought. Many of the initiatives that I have discussed would be welcomed across the whole south, not just the south-west, and micro-businesses would be delighted.

10:05

[Simon Kirby (Brighton, Kemptown) (Con)]

I congratulate my hon. Friend the Member for Gosport (Caroline Dinenage) on securing this debate on an issue that is important to the long-term economy of not only the south and south-east but the UK more widely. As a former small business man, I am acutely aware of the stresses and strains involved in running and building companies as an economy emerges from recession. I will not say much, as I do not wish to detain hon. Members for too long, but I would like to make three or four points.

First, at a macro level, we must ensure that business support for new and developing businesses is clear. I am told that there is little support at present and that the private sector has yet to take up the slack. I am interested to know what the Minister has to say about that. Secondly, the interest rates that banks charge businesses, when they do provide working capital, are still an issue. I understand that interest rates of 20% can be charged, although the Bank of England rate is only 0.5%. How are businesses supposed to cope with such rates and still make a profit?

More locally, I am pleased to report that high-speed internet implementation is making its way across my constituency, which will enable a major change in how goods and services are transmitted and provide the infrastructure for new services. Enhancements in speed bring new opportunities for business. I am delighted that BT announced yesterday that its exchange in Brighton, Kemptown will be upgraded to give 34,000 premises access to superfast broadband.

However, one local concern is the tourist tax recently proposed by the new Green administration of Brighton and Hove. Initially, the tax would be charged at £1 per tourist per visit. As hon. Members might imagine, local hoteliers have come out against the idea, as it would essentially be a tax on hotels. I do not want anything to damage Brighton’s competitiveness as a tourist destination. Once taxes are introduced, they inevitably rise and are rarely repealed. The way to attract tourism to Brighton and other destinations is to maintain a framework that enables visitors while allowing tourism services and businesses to survive.

I believe that the Government’s economic strategy will set this country on a sustainable way forward in which debt, growth and employment will come into balance over time. However, what is done at the micro level is just as vital. State direction, bureaucracy and red tape must all be limited to allow the private sector to grow and fill the vacuum when the state is pared back. Government cannot pick winners, but it can create the framework to allow winners to win. That is just as important in the south-east as it is anywhere else.

10:08

[Caroline Nokes (Romsey and Southampton North) (Con)]

I, too, congratulate my hon. Friend the Member for Gosport (Caroline Dinenage) on securing this important debate. As we have heard ably from her, and from the right hon. Member for Oxford East (Mr Smith) and my hon. Friend the Member for Brighton, Kemptown (Simon Kirby), prosperity is not uniform in many parts of the south-east, which has its share of deprivation, poor educational attainment, low aspiration and poverty. However, what is striking about my constituency is that it has extremes: areas of wealth and enterprise adjacent to areas of worklessness.

I do not want to paint too gloomy a picture. Romsey and Southampton North remains one of the most wonderful places in the country to live. The local authorities, both individually and collectively through bodies such as PUSH, the Partnership for Urban South Hampshire, and the local enterprise partnership, are working hard to promote regeneration and stimulate enterprise and growth.

Southampton city council in particular has pushed ahead with plans to regenerate the city. It has made some striking differences to the cityscape and to employment opportunities, and has promoted the city relentlessly as a place to do business and to establish companies, ideally located as it is, with a major international port, an airport on the edge of the city and opportunities for excellent university education, not to mention easy access to beautiful countryside, the coastline and superb recreational opportunities. The city has 7,600 companies, with 120,000 people employed, but it does not have the support of enterprise zones, and has no national insurance exemption for start-ups and no structural funding from Europe.

How much more could have been achieved for this regional hub with the same level of support that cities in the north received? Would 32% of the work force still be reliant on the public sector?

[Stephen Lloyd (Eastbourne) (LD)]

I congratulate my hon. Friend the Member for Gosport (Caroline Dinenage) on securing this debate on this important issue. Is my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) aware that a recent Federation of Small Businesses survey indicated that, if more than 30% of small and medium-sized enterprises in the south-east had access to the national insurance contribution holiday, they would take on new people? That would be good for the country and for our region.

[Caroline Nokes]

My hon. Friend makes an excellent point and is absolutely right—those companies would be willing to take on more people and create more employment in the private sector. As I was about to say before he intervened, in these straitened economic times, there will inevitably be a correction in the number of people employed by the public sector, and we need that slack to be taken up by members of the FSB and other small business organisations.

Landmark sites on the edge of Southampton that are earmarked for major corporate headquarters remain only partly used. One must therefore ask whether those sorts of sites would have been snapped up by now if there had been more support and more enterprise zones in the south-east.

If Southampton was lifted up—this is true of other cites in the south; my hon. Friend the Member for Portsmouth North (Penny Mordaunt) has left the Chamber, but there are close and obvious parallels and comparisons between Portsmouth and Southampton—and placed anywhere in the north, one would notice striking similarities between it and cities in that region.

On the 2010 recognised indices of multiple deprivation, Southampton is ranked as the 81st most deprived local authority area in the country, which is 10 places worse than in 2007. Therefore, in spite of being perceived as an economic powerhouse, there are places in the south-east where deprivation is getting worse, unemployment is going up, and we could benefit greatly from some support to the SMEs that will play a critical role in economic recovery. As we know, 60% of all new jobs are created by entrepreneurs and high-growth small businesses, and in a part of the country where, as we have heard, it is very expensive to do business and there are high rents and high rates, those small businesses need every bit of support. We neglect the south-east at our peril. The country needs this region to be accelerating growth, and if it is to do that, the full range of funding options must be available to entrepreneurs.

I hope that colleagues will forgive me if I comment briefly on some of the good things that are happening in Southampton. At Solent university, a culture of entrepreneurship is being fostered amongst the students—we have heard that something similar is happening in Portsmouth—and it applies to not just the alumni, but undergraduates and those who are about to graduate. They are all being encouraged to consider their own start-ups and given tools and practical support to do that.

The city council has worked hard to stimulate investment, much of which has come from the retail sector and hospitality, with hundreds of new jobs created with Costco, Sainsbury’s and Morrisons. There have also been manufacturing successes, with up to 700 new jobs in marine manufacturing in Woolston. The city is managing to buck the trend for job creation, but we should remember that that must still be held against the 32% dependency on the public sector.

Another thing that we have seen in the private sector—I am prepared to concede that this is not an SME—is the dramatic expansion of Southampton as a cruise terminal. Much credit must go to Associated British Ports, which has invested private money in the port to a massive extent and boosted the city’s economy, without subsidy from Government or Europe, unlike some of its competitor cities. What ABP wants from the Government is a level playing field, so that businesses are not disadvantaged in an unfair way and confidence is not undermined in a way that chokes off essential private sector investment. It is successful, but it has achieved that on its own and feels aggrieved to see other ports being given a leg up.

There is much to be proud of in the city, but there is still too much deprivation. There could be more stimulus if companies benefited from the same tax breaks available further north. How many more new graduates would find the impetus to start up their own business if they, too, could have that national insurance exemption?

This is an important debate on an important issue, and I urge the Minister to consider carefully what Members are saying about the south-east. The region is desperately needed to drive the economic engine of the country, to accelerate growth and to provide private sector jobs.

10:15

[Mr Dominic Raab (Esher and Walton) (Con)]

Thank you, Mr Streeter, for the opportunity to speak in this debate. I join others in welcoming the ability of my hon. Friend the Member for Gosport (Caroline Dinenage) to secure it, and congratulate her on her excellent speech.

I welcome the various different fronts on which the Government have tried to lever up some economic recovery, through securing and retaining market confidence, which has brought us back from the cusp of default, and through some of the fiscal measures on corporation tax and the regulatory measures to which other Members have referred. None the less, it is worth pointing out some of the findings in the Institute of Directors policy paper that came out this week. It pointed out that the overall tax burden on small and medium-sized enterprises

“is a lot higher than the corporation tax rates of 20 and 26 per cent”—

it is closer to 32% and 43%—and that a business

“can expect to have to pay four or five months’ worth of profits to the state each year.”

That is worrying and, like the IOD, I would love to see the public finances permit a move towards the consolidation of national insurance, a reduction of the overall level of national insurance for employers and businesses, and further cuts in corporation tax.

That analytical view is bolstered by the feedback that I get regularly from local businesses in Elmbridge. They raise three major things with me. The first is credit—there is still not enough credit going to viable SMEs. The second is red tape. Like others, I would welcome it and congratulate the Government if they tackled some of the health and safety and employment law regulations. Thirdly, it is still too difficult to hire and fire in this country, and that is a major obstacle to growth. I would be grateful if the Minister could give an assessment of the one-in, one-out rule for the financial year 2010-11. How many regulations have come in and how many have been scaled back? It would be useful to know what practical progress has been made.

Like others, I welcome the cuts to both the main rate and the small business rate of corporation tax, but national insurance, as others have said, remains onerous. One aspect that is raised constantly with me as an MP for a constituency in the south-east is business rates and a feeling that our businesses are taxed more and more but get back less and less. Can the Minister give an indication of what progress has been made towards ensuring that local communities see a greater share of the revenue of the tax raised from businesses locally so that we can take some positive steps towards incentivising local business growth?

Much has been said already about the one-year national insurance holiday for start-up companies, but I understand that it is still not applicable in the south-east. Many Members present will recognise that we need to do far more to promote investment and infrastructure in other parts of the country that are not as well developed. Other measures of a more socio-economic nature, such as the pupil premium, encourage greater social mobility and economic development.

[David Simpson]

I have listened to every contribution. Does the hon. Gentleman agree that what we need to do in the whole of the United Kingdom is create the confidence that the business sector once had? Small businesses are fighting a rearguard action against the banks, the markets are not what they were, and small hauliers face opposition from and have to compete against hauliers coming in from Europe filled with cheaper fuel. We need to create the confidence whereby businesses of all sizes are prepared to take a risk again.

[Mr Raab]

I thank the hon. Gentleman for that contribution and I agree entirely with its sentiment and spirit. One of the concerns is that we will not get that business confidence back unless we do a bit more to bring down the regulatory and tax burden. On the national insurance holiday, I am concerned about the precedent of moving towards increasing regional tax subsidisation, which is, effectively, what we are talking about. Over the years, a wealth of research has shown that cutting business taxes may well increase revenue as a result of business growth. Is the Minister aware of whether any assessment was done of the fiscal impact of extending the national insurance holiday to all parts of the country, specifically in terms of what revenue would be gained back? Is that measure revenue neutral or even revenue positive? Such an approach would certainly be welcomed by businesses across my constituency.

In Elmbridge, I see a huge niche comparative advantage in high-tech start-ups—for example: Chelsea Technology, which pioneered the sensors that were used to clean up the oil slick in the gulf of Mexico; T R Control Solutions, which is a relatively small business that has pioneered the software being used in Whitehall to cut CO₂ emissions; Air Products, and Saville Consulting. There are many others. We are not going to rebuild the old manufacturing industries of the past, and there is no point harking back to the industrial revolution with doe-eyed nostalgia. What we can do, and what I hope we will do, is build and innovate in the areas of comparative advantage. The high-tech manufacturing industry is of particular comparative advantage in my constituency, in the south and for the country as a whole.

I am conscious of the time, so I will conclude my remarks. Again, I thank you, Mr Streeter, for giving me the opportunity to speak and I congratulate my hon. Friend the Member for Gosport on securing the debate. I hope that the Minister will address some of the specific points made when he replies.

10:21

[Mark Lancaster (Milton Keynes North) (Con)]

It is a pleasure to contribute to this timely and important debate, which I congratulate my hon. Friend the Member for Gosport (Caroline Dinenage) on securing. It is also a pleasure to serve under your chairmanship, Mr Streeter.

Like other hon. Members, I confess that I have a business background. It is perhaps slightly ironic that in 2005, the year of the 400th anniversary of Guy Fawkes, I was the first firework manufacturer to be elected to this place. Even now, when I wander into Parliament on 5 November, the temptation to blow the place up is still there! So far, I have managed to resist it.

We have had a tour of the south of England this morning—from southerly constituencies, to Milton Keynes North, which is the most northerly seat in the south-east region. Small business is big business in my constituency. On average, five businesses move into or expand in Milton Keynes each month. Some 72% of our companies began in the city. Milton Keynes is the city of start-ups and, in 2010, the Centre for Cities outlook report said that it had the third highest number of business births in the country. We may also be considered the headquarters of headquarters. We are home to the national bases of Volkswagen, Argos, Marshall Amplification, Mercedes-Benz and, imminently, Network Rail.

However, many of the 10,000 businesses in the new city are small and medium-sized enterprises. Many of the business men and women I have met welcomed the excellent measures introduced over the past year by the coalition Government—for example, small business rate relief, which other hon. Members have mentioned. Although I certainly support the national insurance holiday, it seems slightly arbitrary that, as we have heard this morning, it is too often decided on a regional basis. There are centres of deprivation across the south, and Milton Keynes is no different. Some of my wards are the most deprived areas in south-east England.

My hon. Friend the Member for Esher and Walton (Mr Raab) made a point about being able to secure credit as a small business. That remains a major problem. Although I know that the Government are keen to act in that area, we simply must do more because, unless small businesses can secure credit, I fear that their future is bleak.

Business owners are particularly keen on the introduction of local enterprise partnerships. Milton Keynes is part of the South East Midlands LEP. Geographically, that stretches from Luton to Corby, with Milton Keynes being the centre of gravity. It has been very much welcomed that the wealth creators and the innovators will determine the direction of our regions rather than having publicly funded, faceless bureaucrats driving regional funding.

However, some people have found it strange that the funds for starting up the LEPs have been solely allocated to the chambers of commerce. Concerns were raised in a letter to The Daily Telegraph about the decision of the Secretary of State for Communities and Local Government to allocate the £300,000 grant to that national network alone. Although the chambers of commerce are excellent—in my constituency, the chamber of commerce is a lynchpin of business activity—they are not the only bodies representing business. There is also the Institute of Directors, the Federation of Small Businesses and the Forum of Private Businesses, national wings of which wrote the letter to The Daily Telegraph back in April. In particular, our local Federation of Small Businesses is a strong voice. I pay tribute to my predecessor, Brian White, who leads that federation in Milton Keynes.

Collectively, small businesses in my constituency are big business, and they deserve a big voice in these matters. I would hate to think that, in coming up with such an excellent initiative, we are alienating anyone. Will the Minister look again at how we fund LEPs? It is important that we ensure that voices from the whole business community are heard and that we do not solely rely on a single channel when it comes to starting these very important partnerships.

10:25

[Mr Andrew Turner (Isle of Wight) (Con)]

I congratulate my hon. Friend the Member for Gosport (Caroline Dinenage) on securing the debate. We all know that small and medium-sized businesses are absolutely vital to the recovery of the British economy. They create wealth in a community and provide local jobs. Micro-businesses are incredibly important to our local economy on the Isle of Wight. The majority of businesses on the island have only one or two employees, and many have none. There are 6,000 businesses in total on the island, 87% of which have fewer than 10 employees. That is a figure of 5,220. I will come back to those points in a moment.

Potential investors and business owners need to understand that living and working on the island is fundamentally different from the mainland. There are a few drawbacks, but there are many more positive aspects. We have a more relaxed pace of life and a better quality of life. We can use that to attract business people who want a good work-life balance. We also have a rather captive audience because the cost of leaving the island can be extraordinarily high. People tend to buy their food and many of their other goods and services on the island, and they bank on the island. Islanders are more community focused than people in many other parts of the country. That is probably because so many people are born on the island, educated on the island, work on the island, have families on the island, and grow old on the island, so even more than in some other areas, it is in the interests of islanders and their families to build a strong local economy.

I am also interested in the move towards more economic development through the focus of local enterprise partnerships on stimulating regional growth. Unfortunately, I understand that the Solent area LEP, which covers the Isle of Wight, has excluded representation on its board from small businesses, including the Federation of Small Businesses. That seems rather short-sighted. I am worried that the voices of small and micro-businesses will not be heard. I hope that the Solent area LEP will find a remedy for that omission soon.

More can be done to support micro-businesses. Many local businesses have disappeared into franchises controlled and dictated to by large brewers. Small butchers and greengrocers have to compete with supermarkets that have free parking and mass buying power. Even though many small food shops on the island are better value for money than the larger supermarkets and offer a better quality of food and produce, they suffer losing shoppers to loss-leading offers and discounted petrol schemes. Perhaps the Government’s commitment to support local communities means that something more can be done to encourage shoppers to use local shops that sell local products.

As I said earlier, most businesses on the island have one or two employees and many have none. Only 13% of businesses on the island have more than 10 employees. Small and micro-businesses are vital to the island’s economy and they have enough on their plate trying to run a successful business, without having to devote hours and hours to trying to ensure that they comply with unnecessary red tape. The Government’s decision to exempt new start-ups from all new domestic legislation for three years is welcome; it is a good start. That, coupled with a review of the 22,000 regulations currently on the statute book, will reduce the bureaucratic burden that so often puts off good small business owners. However, I regret that the island was not included in the decision to give a national insurance holiday to small, start-up businesses. Just because the previous Government put the island in the south-east region does not mean that it shares the affluence of some of our mainland neighbours. I hope that the Chancellor will look closely at differences within regions—I recognise that that point has been made—when announcing such policies in the future.

I recently met with Neil Whitmarsh, the senior business manager of Lloyds bank on the island. He told me that business lending on the island is well ahead of target, and I welcome that news. Island businesses will also benefit from the improved access to finance promised by the Government. I welcome the announcement from the major banks that they will make £76 billion available in new lending for small businesses across the country in 2011. All in all, I think that the Government understand and appreciate the massive contribution that small businesses and micro-businesses make to our national and local economies. The work that has been done is an excellent start, but we need to keep micro-businesses afloat, otherwise our economy will once more suffer.

10:31

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

I add my congratulations to my hon. Friend the Member for Gosport (Caroline Dinenage). The debate gives me an opportunity to explain something of what we are doing in my constituency. We have set up the Sittingbourne and Sheppey Link 2 Business, which has its own website that offers local businesses direct access to my office and a range of other services. We set that up because, during my term as MP, one of my top priorities is to help local companies get through the tough economic challenge that our country faces.

As and when the economy improves, I want those businesses to be better placed to expand and provide the extra jobs that my constituents need. At 8.7%, my constituency has one of the highest unemployment rates in Kent. I am determined to do everything I can to help bring that figure down. I am lucky that Swale borough council and Kent county council are two local authorities that recognise the importance of private enterprise to wealth creation. They are both doing all they can to attract more investment into our area. Of course, much of the future prosperity in my constituency is dependent on those companies that already do business in the area, which is why helping them is so high on my priority list.

One way in which I can achieve my goal is to ensure that local business men and women have easy access to advice and are able to get quick answers to any questions they might have about Government policy. The Sittingbourne and Sheppey Link 2 Business provides that service. We hold monthly business breakfasts at which local business people can share with me their concerns and problems. I have been running those breakfasts for a year and the three gripes that are continually raised are the burden of red tape, the lack of a skilled work force locally and the difficulty of accessing Government grants because we happen to be in the south-east of England. As a number of hon. Members have pointed out, we actually have areas of deep deprivation in the south-east. In my constituency, two of my council wards are in the top 10 most deprived nationally.

It is for the people living in those areas that I would like to issue my plea to the Government for help. Swale borough council, Kent county council and I are working together to do all we can to encourage investment into our area. As the Minister will know, Kent took a hard hit recently when Pfizer decided to pull out of Sandwich, with the loss of 2,500 jobs. On the plus side, Vestas is seriously considering setting up a wind turbine factory in Sheerness to create another 2,000 jobs. I am sure that we could seal that deal if there was some access to Government aid. Bringing in such investment would give a huge boost to small and medium-sized businesses in my constituency. Losing that investment would be a tragedy.

I know that the Government’s aid policy is pitched towards regions where there is a need to rebalance economies that have become over-reliant on the public sector. As a business man, however, I know that when times are tough the way to create growth is to invest in those areas of the business that have a proven record of success, rather than those that have been a drain on company profits. The same should apply to Government investment, and I urge Ministers to rethink regional aid policy. The country needs more private sector jobs. In Kent, we are doing all we can to help our local businesses create those jobs, and I am sure the same goes for other southern counties. We need Government help, however. We need financial help. Give us that help and we, in the south and south-east, will help kick-start Britain’s economic recovery.

[Mr Gary Streeter (in the Chair)]

I thank all colleagues for co-operating on timing. The winding-up speeches now begin. I call Chi Onwurah.

10:35

[Mr Chuka Umunna (Streatham) (Lab)]

Thank you, Mr Streeter. It is actually Chuka Umunna. My hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) is another member of the shadow business team, and she is a she as well.

Let me start by congratulating the hon. Member for Gosport (Caroline Dinenage) on bringing this important issue to the Chamber. I say that not only out of custom, but because we are looking to small and medium-sized businesses to create the jobs and growth that will enable us to reduce the deficit and return the country to prosperity after the global financial crisis and the recession. In the south, SMEs make up 99.4% of enterprises. They deliver 52.6% of the jobs in the private sector and 40.9% of private sector turnover. In the three regions that I commonly think of when I think of the south—the south-west, the south-east and the eastern regions outside London—there are 420,000 SMEs employing 3.26 million people, from sole trader outfits to those employing 100 or more. It is an absolute prerequisite for the full recovery that we all want to see that they grow and flourish.

To see SMEs bloom, we need to foster and promote an enterprise culture in which people can make an informed choice about setting up their own enterprise and business, as opposed to going to down the employment route with another outfit. We need to create a dynamic start-up market by strengthening the support that we provide to people in terms of giving them the networks and access to information that would encourage them to start up a new business. We need to build the capacity of our existing SMEs to grow by promoting the adoption of shared learning, good practice and maximising the skills of business. We need to encourage SME activity in disadvantaged and deprived communities, many of which have already been mentioned.

I know that many MPs in the House, including those who have contributed to the debate, have direct experience of business. The hon. Member for Gosport runs a small manufacturing outfit and has a lot of knowledge in this area. The hon. Member for Brighton, Kemptown (Simon Kirby) mentioned that he is a former business man, and of course the hon. Member for Milton Keynes North (Mark Lancaster) is the first fireworks manufacturer to sit in this House—something that I did not know. I practised as a solicitor for the best part of a decade before entering the House. Throughout my time as a solicitor, I advised SMEs. I think that the Minister worked in business for a good decade before he came into the House, too. Everybody who has contributed does so from practical experience, which is a good thing for us here in Parliament.

As a result, we are familiar with the obstacles that SMEs face. Chief among them is access to finance. The Government’s regional growth fund has been mentioned. The previous Government had a regional growth budget of £1.4 billion, which was delivered through the regional development agencies. This Government are investing the same sum, but over three years—a two-thirds cut in investment. The first round of bids has caused some angst and was very over-subscribed. The applications were restricted to those with bid values of more than £1 million, which denied many SMEs access to the funding. The hon. Member for Isle of Wight (Mr Turner) said, for example, that 87% of the businesses in his area are micro-businesses, and such businesses are probably not in a position to make bids of that size. Will the Government consider revising the criteria to permit bids of a smaller value so that more SMEs can benefit? The Opposition have also suggested reimposing the bank bonus tax and adding £200 million from that to the £450 million already announced for the regional growth fund.

New local enterprise zones were mentioned—the hon. Member for Gosport highlighted that none is scheduled to appear in the south. Notwithstanding whether we proceed with the zones or where they are located, why does the Minister feel that they would work and be successful? When I sat on the Treasury Committee, the chief economist of the Cabinet Office, Jonathan Portes, who left his position in February, said that his understanding was that, instead of creating new economic activity, enterprise zones simply shifted it around the country.

Above all, SMEs look to the banks for access to capital and finance, which they cannot access on the capital markets, unlike larger companies. The hon. Member for Isle of Wight, as well as the hon. Member for Upper Bann (David Simpson) who is no longer in his place, referred to the Project Merlin agreement, which was announced in February. Under it, the Chancellor told us that the banks had agreed £76 billion of gross new lending to SMEs, giving a quarterly target of £19 billion, which we learnt recently that the banks had missed by £2.2 billion. I have some questions for the Minister, given information that has come to light over the past few days since we had Business, Innovation and Skills questions on the Floor of the House last week. In particular, the Minister said in a written answer to my hon. Friend the Member for Barnsley Central (Dan Jarvis), on 8 June:

“The Merlin Agreement was about setting stretching lending targets to the banks to make sure that they make available the credit that businesses need to grow...Lending to SMEs in the first quarter was £16.8 billion against a quarterly ‘stretch’ target of £17.2 billion (the ‘capacity’ target would imply a figure of £19 billion).”—[Official Report, 8 June 2011; Vol. 529, c. 391W.]

That was the first mention of a stretch target, which appears to let the banks off the hook on SME lending, because the stretch target is 10% lower than the original target announced by the Chancellor in February.

Why did the Chancellor not cite the stretch target referred to by the Minister in the written answer last week? Surely Parliament should have been told about such targets at the outset. Secondly, why are those stretch targets and the details about them not published quarterly on the Bank of England website with the capacity targets we were originally told about? On the Project Merlin provisions to do with chief executive officer remuneration, will the pay link reflect whether the banks have also met stretch targets, or will the link be with capacity targets? Lastly, Treasury officials were quoted in the media yesterday as saying that the Minister’s stretch targets do not officially exist, yet clearly they do, because we cannot get more official than a ministerial written answer informing us of the existence of such a target. Why is the Minister saying one thing, when the Treasury appears to be saying another? Perhaps the Minister can provide clarification. We need the banks to lend to SMEs in the south and beyond if we are to see growth return.

Other issues raised in the debate include the national insurance holiday, which the hon. Member for Gosport thought was unfair in not applying in the south-east, while my right hon. Friend the Member for Oxford East (Mr Smith) thought that the application of the criteria determining where the holiday would apply was rather broad brush. The hon. Member for Portsmouth North (Penny Mordaunt), who is no longer in her place, mentioned the low take-up of the benefit: we were told that 400,000 businesses would benefit but it appears to be far fewer. Can the Minister tell us where we are with that?

The cost and complexity of regulation were mentioned by the hon. Member for Newton Abbot (Anne Marie Morris). She would probably agree if I took it from her comments that the issue is one not only of cutting the red tape but of ensuring that the regulation we have is applied in a smarter fashion, and easier for businesses to understand. I think she also mentioned the employment tribunal regulations, as did the hon. Member for Esher and Walton (Mr Raab). The previous Government did away with the statutory dispute resolution procedures—in practice, they were difficult for employers to grapple with—and that was a good thing, but I add a note of caution, because watering down employee rights is not necessarily a substitute for a proper and comprehensive growth strategy to help the businesses we are discussing.

The hon. Member for Romsey and Southampton North (Caroline Nokes) talked about the high rents and rates from which businesses in her area are suffering. I am receiving exactly the same comments from my constituents in Streatham. What does the Minister think we can do centrally about the problem? The lower tax burden and the Institute of Directors report were mentioned by the hon. Member for Esher and Walton. In reality, the tax burden for SMEs is, typically, between 32% and 43%. We need to look at that. The hon. Member for Isle of Wight mentioned the big issue, which the Government need to look at, of SME representation on the LEP boards. The preponderance of SMEs feel excluded from the boards of the LEPs, and that claim is popping up all over the country. Would it be a good idea to give the LEPs responsibility for the billions of pounds of regional development agency assets, so that they can have real local influence in their operating areas? The hon. Member for Sittingbourne and Sheppey (Gordon Henderson), who has been involved in business as well, talked about the challenge of local skill shortages which I, too, recognise.

The hon. Member for Gosport started by mentioning the notion that the south is being pigeonholed as an affluent area without the same challenges as the north and, perhaps, is not being afforded the benefits received in the north. I am not suggesting that that is what she said, but SMEs are the lifeblood of our economy and we need them to thrive everywhere, in deprived communities all over the country, be they north or south. The Government strategy for growth is predicated on a boom in exports and in business investment. We need to see that happen all over if growth is to return.

10:48

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

I congratulate my hon. Friend the Member for Gosport (Caroline Dinenage) not only on securing the debate but on her excellent contribution. How refreshing, in this Parliament, in a debate on small businesses, to see a significant number of hon. Members such as myself with a business background. I know it is meant to be a dangerous thing for a Minister to have some knowledge of his subject, but it is actually immensely helpful. Many of the representations, on whether we can do a little more of this or extend a particular scheme, are in many senses a process of singing to the choir. I am sympathetic, but we have inherited a tight financial situation and, without wanting to get partisan, we have therefore been restricted in some areas in which we would like to do more. Hon. Members of all parties appreciate that.

As was pointed out by all hon. and indeed right hon. Members, small businesses are vital. We heard from the Opposition spokesman, the hon. Member for Streatham (Mr Umunna), and I welcome him to his position; this is the first opportunity we have had to debate in Westminster Hall. He is right to talk about how small businesses represent a significant proportion both of businesses as a whole—99% in the south-east—and of the jobs created, accounting for just over half of private sector jobs. In my book, small businesses are the drivers of growth and the leaders of innovation, and as we try to move away from the recession, we want to improve on that.

Let me say at the start that this Government are absolutely committed to enabling more people to start businesses, and then to grow them. Many of the initiatives that make a real difference to people’s bottom line in running a business, whether micro, small or medium, are policies that affect every business throughout the country—national policies. I shall come to some of the specific aspects, and the spatial and regional dimension. The Government have started by trying to ensure that people who want to begin the journey of starting a business can do so.

The new national enterprise allowance, which is available throughout the south-east and the country as a whole, will be rolled out over the next year, and will help thousands of unemployed people, whether in Gosport or elsewhere, to take that first step on the crucial journey from being unemployed to being self-employed. That is why we are overhauling the whole bureaucratic process of, for example, registering a company. It has been ridiculously complex in the past, and when I started my business at the bottom of the last recession, it was immensely slow and expensive. We are putting the process online, and making it quick and cheap so that people can get going and get under way.

That is why the Government, during our first 12 months, sought to stop the planned increase in national insurance, which would affect every small business and could have cost, according to the Federation of Small Businesses, some 47,000 jobs. We stopped that, and that helped businesses up and down the land. It is why we are reforming the tax system, to which several hon. Members referred, and cutting the rate back to 20p instead of increasing it, as had been planned. It is also why we are ensuring that the system is simpler. In the past, too much time has been lost in trying to comply with bureaucracy, reliefs, allowances and the ever-changing two-Budgets-a-year process. Simplification and greater predictability are crucial when trying to run an SME.

On regulation, I totally understand that there will be natural caution about how this Government, more than any other, are making progress. My hon. Friend the Member for Esher and Walton (Mr Raab) referred to one in, one out. During the first six months, when we invited representations on various regulations, we received 157 on different regulations. We have cut those by 70% down to 46 and only 11 will cost businesses anything. That is a start, as hon. Members have said, and they are right. This is the beginning of a process, and there is a lot more to do. I am working with my colleagues throughout the Government to consider the next half-year—July to December—so that that 70% reduction in the number of regulations can be matched and improved on. However, we can do more, which is why have introduced the new moratorium for new regulations on SMEs to ensure that micro, small and medium businesses can get on with their business without worrying too much about complying with Government bureaucracy.

That is also why we have taken the bold step of ending gold-plating of EU regulations in this country. We have had a habit of being the first to implement them, and in a way that is far more complicated for our businesses than for our European competitors. We are changing that, which is why we will not implement EU regulations a day earlier than we legally must, and why we will ensure that we do not add to directives and make life more complicated when our businesses are competing with their European partners. Those are crucial steps that will make a difference to the bottom line.

I turn to the specific issues raised by various hon. Members. My hon. Friend the Member for Gosport rightly pointed out the crucial role of exports in our growth overall, and in helping SMEs improve their productivity and innovation. The evidence is there. That is why UK Trade and Investment is changing its strategy to make it far more entrepreneurial. It also has a new “passport to export” service deliberately aimed at SMEs. We have worked with the Export Credits Guarantee Department to loosen up some of the regulatory processes, and to introduce a series of new schemes to help businesses in the credit area with a simpler credit insurance product, a new bond scheme to make things easier, and a new foreign exchange credit scheme. If my hon. Friend would like further details, I am sure that my officials will be happy to supply them.

I shall deal with an issue that is specific to Gosport, and then speak about generic matters. As my hon. Friend knows, I visited her constituency yesterday, and met other people in Portsmouth and elsewhere in the area. One initiative that we are driving forward is recognition of the tremendous value of the marine engineering industry. It is crucial for many hon. Members who have spoken today, but has been neglected. We have all recognised the importance of automotive engineering, and we have all pushed the case for aerospace, but the country has tremendous expertise in marine engineering. I am co-chairing the Marine Industry Leadership Council, and leading the strategy with the industry. It sets out the key issues involving technological change and the ability to take on new opportunities so that that industry is prosperous. That is crucial for areas such as Gosport. National political leadership can make a real difference to a local area.

My hon. Friend mentioned the national insurance holiday. A little perspective is important, but I understand people’s concern. The change will help new businesses. No existing business in any constituency will be treated differently, whether they are in the north or the south. That is important. Although the Chancellor is clearly under financial pressure, he wanted to make a difference, and to help business formation in areas where it is at a lower level, so we chose to help businesses outside the wider south-east. I note the representations, and I totally understand the point. I will come to the broader point about specific pockets of deprivation in apparently more affluent areas, but the policy has tremendous merit. These are early days but, like all tax policies, the Chancellor will keep a close eye on it. He has noted, as have I, hon. Members’ representations.

On finance, the Opposition spokesman, the hon. Member for Streatham, mentioned a couple of issues, as did another hon. Member who is no longer in his place, about access to finance. This is crucial in terms of ensuring that we hold the banks to their targets—I will come to that—and how we deal with equity finance and risk capital. That is why we ensured the continuance of Capital for Enterprise with a £200 million fund. It is also why we have pushed the banks to provide us with a business growth fund, aimed at the mid-caps, which will help unlock around £2.5 billion. The hon. Gentleman also referred to targets. It is the capacity targets to which we will hold the banks. Clearly, in any negotiations there will be other ways in which we wish to stretch the banks and challenge them, but we are monitoring the capacity targets.

On regional growth funds, I am well aware that if people have not won funding they will want to know why, and I understand that. The first round was very popular, and heavily over-subscribed. The second round is now in hand, and its capacity has doubled. It is worth pointing out that it is focused on areas with heavy reliance on the public sector, but the scheme is based on merit, and there is no attempt to place a limit on businesses applying in different parts of the country. That is important, and leads on to the wider issue.

As I discussed yesterday when I visited Gosport, such places have pockets of deprivation, as does my constituency in Hertfordshire, and in a strange way they are more isolated than if they were in an area that is generally recognised in the statistics as bring deprived. That is why the old regional debate about north-south is too crude. It is why I talked to the Solent LEP, as I have to others, about looking at the nomenclature of units for territorial statistics—the NUT statistics, which relate to the size rather than the sanity of the preparation—to ensure that we drill down and better understand the real problems. It is one reason why we are replacing regional development agencies with local enterprise partnerships. That will allow us and, more importantly, local business and civic communities, directly to address some of the problems and local issues that might be masked by more general affluence, which tends to colour the way in which Government policies work. That is why enterprise zones will be open for all enterprise partnerships to apply for.

I had the opportunity of seeing the former HMS Daedalus, which is a fascinating sight. We are in the bidding period, so I must be careful, but I am sure that my hon. Friend the Member for Gosport and her supporters and constituents will make a powerful representation.

Finally, issues were raised about the new generation of entrepreneurs, whom I totally support. Several hon. Members mentioned that, including my hon. Friends the Members for Romsey and Southampton North (Caroline Nokes) and for Newton Abbot (Anne Marie Morris). Yesterday, I was at my alma mater, Reading university, to open its new enterprise centre. We must do what is done in silicon valley, and bring investors—

[Mr Gary Streeter (in the Chair)]

Order.

Unauthorised Encampments (Brighton)

Wednesday 15th June 2011 Westminster Hall

11:00

[Simon Kirby (Brighton, Kemptown) (Con)]

I am grateful to have secured this Adjournment debate. In recent weeks, my constituents have become increasingly concerned about the influx of Travellers into Brighton, the creation of unauthorised encampments, and the attitude taken by the city council’s new Green administration to that important issue. Furthermore, a “tent city” protest against Spanish-style austerity has recently been organised by the so-called Real Democracy Now campaign on the historic Old Steine in Brighton. That protest was not moved on by the police, and it was welcomed by the Green party as the kind of peaceful protest it wants to see.

A number of houses in the Ovingdean and Roedean areas of my constituency have been used as so-called “party houses”, and former homes in residential streets have been turned into the equivalent of nightclubs for 24-hour partying over the weekends. As you will imagine, Mr Streeter, none of that sits well with the majority of law-abiding citizens and constituents, who pay their taxes and obey the rules.

Brighton has been a magnet for Travellers for many years. Previous councils created a site for Travellers at Horsdean in Brighton, which was refurbished by the recently departed Conservative administration. That site is located in the constituency of the hon. Member for Brighton, Pavilion (Caroline Lucas).

[Caroline Lucas (Brighton, Pavilion) (Green)]

The hon. Gentleman mentions the fact that the previous administration set up a transit camp. Does he also acknowledge that it did not succeed in finding any kind of permanent site? The lack of such permanent sites is one of the main causes of the problems he describes.

[Simon Kirby]

I am afraid that I do not agree with the hon. Lady. The problems we see today—which will get worse if something is not done—are caused by the Green administration and the lack of desire to move people on. We have a perfectly adequate transit camp that is largely unoccupied. Yet over the past few weeks in Brighton and Hove we have seen Travellers at the Victoria recreation ground, at Benfield Valley park, at Withdean park, on farmland adjacent to 39 Acres off Ditchling road, on the Ladies Mile open space, at Happy valley, at Wild park and in east Brighton. The camp at Horsdean remains, at a cost to the taxpayer, and it has empty pitches.

As I have said, Brighton has been a magnet for Travellers for many years, and the good intentions of previous administrations do not seem to have stemmed the flow of Travellers to the area. When Travellers arrive, groups set up unauthorised encampments wherever the mood takes them. That could be on publicly owned land, which is often owned by the city council, or on privately owned land such as the Portslade cricket club in the constituency of my hon. Friend the Member for Hove (Mike Weatherley). Understandably, residents get annoyed and phone the police or the council. The council and the police are supposed to work together, but there is often a delay while legally mandated welfare checks are carried out, and consideration is given to seeking an order that would instruct the Travellers to move under section 61 of the Criminal Justice and Public Order Act 1994.

[Bob Stewart (Beckenham) (Con)]

This problem is not uncommon. Yesterday I visited a newly-established illegal Travellers site in Layhams lane, Coney Hall, in my constituency. I told the Travellers to move on and they told me that they would not unless compelled to do so by the police. In the meantime—as they have done before—they make a hugely expensive mess for the local council. In this specific case, some people have uncontrolled dogs that bit one of the teachers in the local school. Anything we can do to increase the speed with which police and enforcers can act would be a great help for decent people who have to put up with the mess.

[Simon Kirby]

My hon. Friend makes a valid point and I agree with him. Only recently we saw similar antisocial activity in the Happy Valley area of Woodingdean in my constituency. Allegations of damage, fouling and abusive behaviour were made to the police and council.

[Sajid Javid (Bromsgrove) (Con)]

I congratulate my hon. Friend on securing this important debate. As he may remember, a few months ago I raised this issue during Prime Minister’s questions and asked what could be done. I asked whether intentional trespass could be made a criminal offence, so that if people move on to other people’s land without permission they can be removed without the need for a court order. The Prime Minister said that he was encouraged by the proposal and that he will look at the issue. Does my hon. Friend agree with such a measure, and will the Minister tell us what point the Government have reached in looking at that proposal?

[Simon Kirby]

I agree with my hon. Friend. Many people in my constituency find it difficult to understand why people can take the law into their own hands and do what they like, disregarding the feelings and needs of others.

[Nicholas Soames (Mid Sussex) (Con)]

Does my hon. Friend agree that the foolish decision by the council makes it harder for the travelling community to live in harmony and be accepted in the way we would wish it to be? Settling in orderly sites is the right way to proceed. In my constituency, we have discovered that the only way to deal with the problem is to be absolutely consistent. If we are consistent and the law is properly enforced, Travellers and the local community find that they can live in greater harmony.

[Simon Kirby]

As usual, my hon. Friend makes a valid point. We need clarity and consistency, and for everybody to know where they stand.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

We are talking about the legality of moving Travellers on. In the Severn Beach and Pilning areas of my constituency there is a new school, and we have had a spate of problems with unauthorised Traveller sites. I asked the Under-Secretary of State for Justice, my hon. Friend the Member for Reigate (Mr Blunt), about making exclusion and eviction orders site-specific rather than individually based. At the moment, if a group of Travellers is asked to move on, other people can quickly reoccupy the site. If the eviction or exclusion order is made specific to a particular site, the problem will be solved once and for all.

[Simon Kirby]

My hon. Friend makes a valid point to which I am sure the Minister has listened carefully.

[Heather Wheeler (South Derbyshire) (Con)]

We have danced around this issue for so long. Many hon. Members present are from the new intake, but some are not. The question about intentional trespass is interesting, and I am delighted that we are pushing the Minister to provide an up-to-date statement on that. In South Derbyshire, I have found that when Travellers trespass intentionally on private land we can get them shifted within 24 hours by using bailiffs. I want to encourage all hon. Friends to let local residents and councils—and perhaps the local police force—know about the possibility of using bailiffs to move Travellers on within 24 hours. We still have an issue with council protocols, and perhaps the Minister will clarify our position on releasing councils from the draconian issue of 28 days’ notice. I hope that hon. Members will accept my apologies; I will not be present at the end of the debate because I need to go to prayers.

[Simon Kirby]

I thank my hon. Friend for making a valid point, to which I am sure the Minister has listened. She is absolutely right. It is not only the two communities—the settled community and the travelling community—that need clarity. Local government itself needs a clear steer on this matter and the tools to carry out the task.

[Caroline Lucas]

Will the hon. Gentleman give way?

[Mr Gary Streeter (in the Chair)]

Order. I encourage the hon. Gentleman who has the floor to ensure that he leaves enough time for the Minister to respond to the debate and enough time to make his own points. Of course, I cannot stop him allowing others to intervene, but he may want to implement a rule of one intervention only.

[Simon Kirby]

Thank you for your wise advice, Mr Streeter. If I can make some progress, perhaps I can give way shortly. Figures from Brighton and Hove city council show that in the past three years, costs of about £233,000 have been incurred simply in clearing up unauthorised encampments.

[Caroline Nokes (Romsey and Southampton North) (Con)]

I apologise for intervening so soon, but my hon. Friend has made a specific point. In my constituency of Romsey and Southampton North, there has recently been an illegal Traveller encampment at Monks Brook. That is one incident among recurrent incidents at that site. A significant amount of mess, of varying types—some of it very unsanitary—has been left behind for the councils to clear up, and of course the ultimate cost of that will fall on the hard-pressed council tax payer. I very much hope that my hon. Friend the Minister will tell us about any support that might be available for councils, even if it is just in the form of strengthened powers to ensure that encampments can be moved on more quickly.

[Simon Kirby]

I thank my hon. Friend for making a valid point. Clearly, the money that is spent in tidying up and clearing up the mess in these instances comes from taxpayers. I for one would like to see that money spent on parks, libraries, grass cutting or any number of other, more constructive things—[Interruption.] Perhaps it could even be spent on weekly bin collections, as a colleague of mine suggests.

In addition, as I mentioned, the previous, Conservative-led council spent some £160,000—again, no mean sum in local government terms—on refurbishing the Traveller site built 10 years or so previously. I understand that the annual budget of the council’s Traveller team is £310,000. Often, the criticism is classed as nimbyism or, worse, racism, yet nothing could be further from the truth. My hon. Friend the Member for Mid Sussex (Nicholas Soames) mentioned communities living in harmony. That is exactly what we all seek to achieve. What people in my constituency and, I suspect, in other constituencies say is that people should be able to lead their lives in their own way, but not if their doing so creates an inconvenience and a cost for others.

[Mike Weatherley (Hove) (Con)]

I thank my hon. Friend for securing this vital debate. Does he agree that it is vital that the support of the new Green administration in Brighton and Hove for Travellers, which appears to be linked to some unlawful instances of destruction of public green spaces such as in Victoria park in my constituency, is reversed as a matter of urgency?

[Simon Kirby]

I thank my hon. Friend for his question. I agree with him. The Green council seems to have given the green light to Travellers to create unauthorised encampments in the city.

[Caroline Lucas]

Will the hon. Gentleman give way?

[Simon Kirby]

I must make some progress.

[Caroline Lucas]

On a point of order, Mr Streeter. What has been said is simply not true. The hon. Gentleman talked about—

[Mr Gary Streeter (in the Chair)]

Order. That is not a point of order. The hon. Lady should take her seat. It is a point of debate.

[Simon Kirby]

Thank you, Mr Streeter. The comments of the lead councillor of the city council, who said that the group of Travellers had “reluctantly” been moved on by the council, do not imply a willingness to see fewer encampments rather than more.

To be fair, I understand, following discussions with senior officers in the council, that the policy has not changed in terms of moving Travellers off unauthorised encampments as soon as possible, yet the tone of public statements by the Green council sends a very different message. We shall see who is right when a large group of Travellers leaves Essex in the near future. Where will they go—to a council that is not sympathetic or to one that because of the statements of its senior figures appears to be so? The Greens have set a dangerous precedent by their public attitude and comments, and residents are genuinely worried about what may be about to be visited upon them in terms of nuisance and cost.

I mentioned that a further type of unauthorised encampment has been created in the historic Old Steine area of Brighton. That is a large, open, grassy area close to the seafront with a café and fountain. It is possible to see the pier from the Steine and it is a favourite attraction for residents and visitors alike. Several weeks ago, several people, protesting on the eve of the Spanish general election regarding the austerity measures having to be taken in that country, decided to create a tent city on the Old Steine. They had a very happy time, banging drums, writing protest placards and creating a focus for world revolution, yet the reality is that their camp was unauthorised. They are now moving on, but some still believe that it is their right to reoccupy the area whenever they choose.

We know, Mr Streeter, how permanent so-called temporary tent cities can become. We have only to look feet behind the chair in which you sit to see one across the road from the Palace. Many constituents rightly argue to me that if a group of protesters is allowed to set up camp like this and, crucially, are not moved on by the police, why cannot they, with a group of friends, take their caravans and tents to the Old Steine and make a holiday camp for themselves? The only difference seems to be that one group has placards decrying the democratic processes that actually allow dissent and protest and the other does not. There is no excuse for long-term tent cities such as this. We have a vigorous Parliament, where issues are debated and decisions on the management of national debt and other important issues are made on a daily basis.

[Caroline Lucas]

I strongly regret and deplore the way in which the hon. Gentleman is using a very sensitive issue as a political football. That does no credit to him or his constituents. What we should be doing across the south-east is working together to find more permanent sites. That is the crux of the problem that we are discussing. He will know, because council officers have said so, that the number of Travellers and Gypsies coming into Brighton is no greater this summer than it has been for any other summer recently. He will also know that the very first act of the new Green cabinet—the very first thing that it did within minutes of being sworn in—was to evict people, very sensibly and responsibly, from the Woollards Field site in Brighton. I therefore urge him to treat this issue with the sensitivity that it deserves, not to conflate the issue of the Old Steine with what is happening with Travellers and Gypsies. Those are two separate things. The actions on the Old Steine were such that they minimised—

[Mr Gary Streeter (in the Chair)]

Order. Interventions should be short.

[Simon Kirby]

I thank the hon. Lady for her intervention. I would like to move on and briefly mention party houses. Those are homes, generally in quiet, residential areas, that are often used to sleep about 20 people. That can lead to days of non-stop partying until the early hours. That disturbs residents, who are entitled to the quiet enjoyment of their homes. It destroys the amenity of an area and creates a further sense of a flouting of the rules by which most sensible communities live. If people choose to live in the centre of Brighton, they can expect noise and disturbance. If they choose to live in an area that is mainly residential, they should be able to expect to go to sleep at night. The previous leader of the council held round-table discussions with council officers, the police and fire authority representatives to see what could be done. What she heard was that, essentially, the hands of public authorities seem tied. That cannot be right.

I urge the Minister to consider the following. We need to strengthen the powers of the police to move Travellers on much more quickly than is the case now. There should be clear guidelines about when the police must act, and those guidelines must err on the side of protecting the property and amenity rights of the settled population. The issue of mandatory welfare checks needs to be urgently reviewed, as well as the level of resources that local authorities need in order to undertake the work required when Traveller incursions take place. On protest camps, the law of trespass needs to be firmly enforced. Again, the police must be given clear instructions on how to handle such situations. On party houses, I believe that we need an amendment to the Localism Bill, which is now in the other place, to give local authorities more powers in that regard.

People in Brighton tell me that they have had enough of their lives being disrupted by outside groups that use the city for their own ends. The settled majority have rights, too, and they are looking to Parliament to uphold them.

11:19

[The Parliamentary Under-Secretary of State for Communities and Local Government (Robert Neill)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I apologise to you and to my hon. Friend the Member for Brighton, Kemptown (Simon Kirby) for arriving a little late and missing the very beginning of his speech, but I quickly caught up with the gist of it. We will get the clocks department at the Department for Communities and Local Government checked.

I am grateful to my hon. Friend for raising this issue and to those Members who have participated. From my postbag as a Minister and from the postbags of my colleagues, I recognise the strength of feeling among Members of the House and constituents on this issue. I am also aware of it from my experience as a constituency Member of Parliament; indeed, my next-door neighbour, my hon. Friend the Member for Beckenham (Bob Stewart), inherited the site he talked about from me in the boundary revision. The issue therefore needs to be approached proportionately.

Without being invidious to others, perhaps I can single out one of the Members who intervened. My right hon. Friend the Member for Mid Sussex (Nicholas Soames)—I hope that I may call him that already, and I am delighted to be able to use that term, which is thoroughly well-deserved—got it absolutely right: the key test is fairness, a sense of balance and consistency, and that is where the difficulty arises.

The Government recognise that Gypsies and Travellers have a right to exercise their traditional lifestyle. It is equally true, however, that anyone exercising their lifestyle must have regard to the concerns of their neighbours and the communities in which they live. The Government are seeking to achieve balance and consistency on that. When there is a perception that one group can, for whatever reason, achieve objectives that other members of the community cannot, perceptions of unfairness arise. As my right hon. Friend rightly said, that presents a risk to community cohesion. The Government want to address the issue in a way that recognises that the majority of Travellers behave lawfully and properly. However, the minority who do not do so make life much harder for the law-abiding majority, as well as for their neighbours. We therefore seek to strike a balance.

We have sought to adopt a proportionate twin-tracked approach. We have abolished the regional strategies, because arbitrarily imposed, top-down targets on Traveller site provision did not work, alienated communities and did not always accurately reflect the need on the ground. On the other hand, we have sought to encourage the appropriate provision of more authorised sites in the right places. To that end, future authorised sites will attract the new homes bonus. We are also making available £60 million to support local authorities and other authorised providers in delivering further authorised sites.

We have set up a cross-departmental working group to look at some of the welfare issues that hon. Members mentioned. We have recognised that those who live on authorised sites are entitled to a measure of legal protection. Since 30 April, we have strengthened their position by applying the Mobile Homes Act 1983 to local authority authorised sites, giving people living on such sites greater security of tenure. All those are incentives to encourage Traveller families to seek authorised sites. That, therefore, is the positive side—the assistance to Travellers, which is an important part of the mix.

On the other hand, we recognise that it is necessary to strengthen enforcement provisions in relation to unauthorised sites, because those are where the damage to community relations and the environment is done. As well as abolishing the regional strategies, which were unfair and ineffective and which caused resentment, we have published proposals for a new planning policy for Traveller sites. They were published for consultation on 13 April, and the consultation will close on 6 July. We have already had a lot of responses.

The proposals seek to remove the two existing circulars—one on Gypsy Travellers and the other on travelling show people—that were introduced under the previous Administration. They have not worked effectively and have caused inconsistency and resentment. We intend to replace them with the light-touch guidance we have set out in the consultation document, which will provide a fairer balance. We have not yet removed the circulars, because there must, as you will know, Mr Streeter, be proper consultation on all such matters. However, it is worth bearing it in mind—local authorities should bear this in mind—that the Government’s intention to revoke the circulars is itself a material consideration, which local planning authorities can take into account when deciding to act on planning or enforcement matters, as is normally the case in planning law.

[Nigel Adams (Selby and Ainsty) (Con)]

When the Government consultation ends in July, will information be made available on the allocation of sites? Will local authorities be given advice about numbers and the methodology for calculating the allocation of pitches?

[Robert Neill]

I suspect that my hon. Friend has already done so, but if he has not, I urge him and any of his constituents with an interest in this issue to look at the consultation document, which is on the Department’s website. We are not in the business of centrally allocating sites—that was the vice of old regional strategies. In the consultation, we give authorities guidance on the appropriate steps they can take to assess need in their areas realistically and sensibly. That is the more proportionate approach. We are therefore dealing with the issue.

In the Localism Bill, which is in the other place, we are strengthening the law on enforcement, and there are several relevant measures. I accept that cynical breaches of planning controls are a particular vice. For example, a site can be occupied specifically on a bank holiday, when the council offices are often closed, which makes it difficult to serve the appropriate notices. Hardcore is then laid, for example, so that an element of development has taken place. To deal with such issues, my right hon. Friend the Secretary of State has alerted local authorities of the need to be vigilant over bank holidays, as my hon. Friend the Member for South Derbyshire (Heather Wheeler) said.

In the Bill, we are also strengthening the penalties for non-compliance with a breach of condition notice. We are including proposals to limit opportunities for retrospective planning applications, which is a particular area of abuse. That relates not only to applications involving Gypsy Traveller sites. In my constituency, some cynical developers have built out a dwelling development in a way that is not in accordance with the plan and then gone back for retrospective permission to get a second bite of the cherry. All such practices bring the system into disrepute, and we intend to restrict the opportunities to undertake them. As my right hon. Friend the Secretary of State said, retrospective permissions should be there to protect those who make an innocent mistake, not those who cynically seek to manipulate the system.

[Caroline Lucas]

I welcome the fact that the Minister recognises that the lack of authorised sites is driving many Travellers and Gypsies to use unauthorised sites, and I hope that even more resources will be made available to provide more sites. However, does he agree that compact agreements between councils and Travellers can be a useful tool in building good relationships? Will he therefore support Brighton council’s plans to go in that direction?

[Robert Neill]

It is entirely for councils to adopt the approach they think is relevant. The Local Government Association has a useful working group on this issue, which is chaired by Councillor Richard Bennett, who is a Conservative councillor—no one party has a monopoly of interest on this. The group has done some pioneering work on encouraging good local practice, but the Government do not seek to impose a one-size-fits-all approach.

A proper supply of authorised sites is certainly necessary, and it is regrettable that the previous Government’s approach did not deliver them. We think our approach will be better. Strengthening enforcement in the way I described, restricting the ability to go back for retrospective permissions and strengthening the powers on temporary stop notices—another issue on which concern has been expressed to us—will achieve more of a balance, so that we can assist proper, appropriate, authorised development, while clamping down on inappropriate and unauthorised development in the way that has been suggested.

My hon. Friend the Member for Bromsgrove (Sajid Javid) mentioned extending the criminal law, and the Government would want to consider that with care, as the Prime Minister said. At the moment, we have a package that will deliver a better balance, and I would like the opportunity to take it forward before we move on to considerations that go beyond that. I hope that that indicates the Government’s stance.

11:30

Sitting suspended.

Caring Responsibilities

Wednesday 15th June 2011 Westminster Hall

14:30

[Sheila Gilmore (Edinburgh East) (Lab)]

I am pleased to have the opportunity to debate this subject under your chairmanship, Mr Streeter.

This is carers week. It is a time for us to praise carers, to have our photographs taken and to issue press releases to our local newspapers to show how much we care for the carers. In fact, however, it is a worrying time for carers, and the first aspect of that is the budget cuts.

The Government have made a great deal of their injection of £2 billion a year of extra money by 2014-15 to support social care. The Minister of State, Department of Health, the hon. Member for Sutton and Cheam (Paul Burstow), said that this

“means councils can meet cost pressures and maintain services”

However, an Association of Directors of Adult Social Services survey found that 98% of English councils showed overall budget reductions, even when taking account of the additional £1 billion for 2011-12.

Age UK says that spending cuts are projected to reduce spending on older people’s care by £300 million over four years, and that real spending on their care will be £250 million less in 2014 than it was in 2004. That is despite the fact that, during that time, we will have seen a rise of two thirds in the number of people over 85, one of the biggest groups that need care.

In 2005, half of our councils provided support to people who were assessed as having moderate needs. In 2011, however, that figure had fallen to 18%. To qualify for adaptations that could help them to manage better without care, people are assessed largely on the same basis. One example is showers that enable people to bathe without assistance. In the overwhelming majority of council areas, people now have to demonstrate critical or substantial need. Many constituents have asked for help with such things as shower adaptations but have been refused because they do not meet that need. One constituent has told me that, as a result, she can take a bath only if her daughter is there to help, yet she lives some miles away. If she had a shower, she feels that she could use it on her own, without having to call on her daughter for assistance. Not only would that improve her well-being and self-esteem, but it would clearly reduce the need for care. Use of these levels of eligibility for the person who needs the care places a greater burden on friend and family carers, who have to fill the gaps.

I argue that the cuts are short-sighted and could end up being more expensive. For example, if the carers’ help is compromised by having to take on an extra burden of care, or if the ill or disabled suffer accidents—perhaps because they do not have adequate adaptations—it will cost us a great deal more. We know that an older person having a fall is more likely to require expensive hospital care, or that a fall can act as a trigger for needing long-term residential care. Such accidents can often precipitate events that might not have happened for a long time, if at all. It is in that context that I argue that the cuts could be short-sighted.

In April, my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) carried out a survey of 61 councils; 27 were Conservative, 29 were Labour, four were Lib Dem. It showed that 88% of councils were increasing charges for social care services; that 16% were raising eligibility criteria, which as I said had already been increased; that 54% were making cuts in the voluntary service; and that almost two thirds were closing care homes or day centres. The Government’s response is often to say that it is primarily for local authorities, under the localism agenda, to decide how to spend the money. I bring to this debate a cautionary tale from north of the border.

Four years ago, the Scottish Government discovered localism, although they did not call it that. In 2007, they entered into a concordat with local government that included the removal of most ring-fenced funds and what I would describe as the velvet embrace of a four-year council tax freeze. Adult social care is not statutory. As a result, it often suffers in budgetary crises. Supporting People funding, which is primarily low level and preventive in scope, has been used since its introduction in 2003 for such things as supporting people in sheltered housing, and helping to meet part of the cost of care packages for people with learning and physical disabilities who have been moved out of institutional care—something that we all agree with—into their own homes.

The end of ring-fencing has led to a reduction in low-level support, the money being used to meet more immediately urgent needs. However, it has proved extremely difficult to track exactly where the funding is being used. The removal of the ring fence has made it hard to be absolutely certain that the money is not being used as it once was, other than through some of the outcomes.

Home care hours have been cut substantially in my city over the last four years. Many people now receive short visits—perhaps 15 minutes at the beginning and end of the day. However, the beginning and end of that day will be whenever the care services deem them to be, and people may be put to bed at 8 pm because it suits the care service. As a result, many families are having to plug the gap. That takes no account of considering such things as paying for care services. Visits can be very brief indeed.

A further difficulty in tracking what is happening is the increasing individualisation of decisions on care. A professional decision that someone needs fewer care hours can be hard to monitor, as individuals do not know what is happening to others and do not necessarily know that there is anything to challenge.

A family who I visited at the weekend have had their care hours cut from 50 to 42 a week. The husband, who is 74, has suffered severe strokes and needs constant care. His family have seen no change in circumstances other than their observation that they are worse, not better. His main carer is his 71-year-old wife; but having been fit and healthy and having worked to age 65, she is now beginning to suffer health problems, and recently suffered a slight stroke from which she has now recovered. No overnight care is provided outwith the family, and the wife often gets little sleep, with other family members regularly having to stay the night to give her an overnight break. The payments that the family receive to pay for care have reduced from £560 per week to £475 per week, based on the argument that their need was less. The family suspect that it is do with funding cuts. It would be more straightforward if local authorities were to say so, rather than suggesting that a professional decision had been made.

Others might touch on this later, but concern has been expressed about what has happened to the money for respite care that was made available by the previous Government. Many of the organisations involved have complained that it was not clear where the money had gone or whether it had been used for the purposes for which it had been granted. Further money has been given. The Prime Minister spoke about it again today. However, the main question is whether the money is being used for the purposes for which it was given. Although a hands-off localist policy makes it possible for Governments, devolved or not, to disclaim responsibility for what is happening, they remain, none the less, the largest funder of local services. A policy of successive council tax freezes tips the financial balance further towards central Government.

[Jack Dromey (Birmingham, Erdington) (Lab)]

Cutting support for the elderly and disabled is described as the cruellest cut of all. Is my hon. Friend concerned that the Prime Minister described Birmingham city council as “excellent” when it had been branded in the High Court as acting unlawfully in taking away care from 4,100 people in substantial need? Does she not agree that the council should continue to support organisations such as Elders with Attitude because they bring people out of their homes and stimulate them mentally and physically so that they lead a good life and do not become dependent on the national health service or have to go into a care home?

[Sheila Gilmore]

That is clear example of what is happening up and down the country not only for older people who need care but for older carers themselves, who have very specific needs. Half of the 6 million people who are providing unpaid care in the UK are aged over 50. In England in 2010, nearly 1 million people aged 65 and over were providing unpaid care to a partner, a family member, who might be younger than them, or some other person. The largest number were aged between 65 and 74, but there were nearly 50,000 people over the age of 85 who were giving substantial amounts of care. A quarter of all carers aged 75 and over provided 50 or more hours of unpaid care per week. Carers over retirement age are a particularly vulnerable group because they tend to have health issues themselves. Such people say that they really have no retirement or that they have not been able to enjoy the retirement that they had expected.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate the hon. Lady on securing this debate. She refers to the age of carers. The survey to which she alluded earlier indicated that about half of all carers are in poor health. We often use the expression “a time bomb”, and it can be a cliché, but here we have a living example of a literal time bomb. If 50% of carers are in poor health themselves, we will, within a few short years, have a double whammy of a problem to deal with—the people who are being cared for and the carers themselves.

[Sheila Gilmore]

I thank the hon. Gentleman for that contribution. That is exactly the point that I was trying to make. The carers face not only health problems, but financial difficulties. Carers over retirement age do not receive a carer’s allowance even though they incur additional costs. They could use additional funds to buy some respite time that they might not otherwise get. They often become cut-off and isolated because they are not able to get out of the house to enjoy the sorts of social activities that enable people to live healthier and more fruitful lives.

Furthermore, there is an anomaly that needs to be resolved. Those on a low income who are over retirement age claim carer’s allowance, but they do not get paid it. Instead, they get access to a carer’s premium in pension credit. We have about 250,000 carers in that category. It is very confusing because they are claiming a benefit that they do not receive in order to get access to a completely different benefit. Hopefully, that is something that the current Government, with their zeal for simplifying the benefit system, will move very quickly to address.

As we debate this subject in Westminster Hall, the main Chamber is considering the Welfare Reform Bill on Report. Many colleagues who would have liked to be here are taking part in that debate. They know how important the Bill is to carers as well as to other people. The proposed changes to benefits are a big worry for carers. At present, carer’s allowance can be claimed if the person being cared for qualifies for either the middle or higher rate component of the disability living allowance. The successor benefit, the personal independence payment, will only have two bands of the daily living component, which is the equivalent of the care component. What is still not clear is how eligibility will work under the new benefit. Will it apply only if the cared-for person receives the new higher rate? How many people will lose eligibility for carer’s allowance as a result of these changes? In the Bill Committee, the Minister was unable to give us an answer to that question. However, Disability Alliance has calculated that to achieve even £1 billion of cuts to DLA—the Government’s forward projections expect there to be a £2 billion saving overall—there could be a risk to 643,000 people who currently receive the lowest rate and to a further 100,000 people on the middle or higher rate.

We are told by the Government that we cannot assume that everyone who currently gets the lower rate of DLA will lose out in the benefit changes because the new test will be very different to the old one, which leaves a question mark over an undetermined number of people. We cannot assume that all the losers in the new personal independence payment regime will be people who do not have a corresponding link to the carer’s allowance.

[Anas Sarwar (Glasgow Central) (Lab)]

I congratulate my hon. Friend on securing this timely and important debate. There is no doubt that the proposed cuts to the employment and support allowance and the DLA will have a devastating impact on thousands of families right across the country. One such couple, Mr and Mrs McCann, wrote to me expressing their own concerns. They both had to take part-time jobs because of caring responsibilities for their daughter, resulting in a 50% reduction in their combined salaries. They do not qualify for carer’s allowance because they have an income of more than £100 a week. They rely on their top-up element for their child tax credit and the DLA that their daughter receives. Does my hon. Friend think that it is fair that this family should have to face the brunt of the cuts and even further hardship?

[Sheila Gilmore]

I certainly do not think that that is fair. I also fear that for some families, not necessarily for my hon. Friend’s constituents, it can be the crisis point that makes it impossible for them to continue with their caring responsibilities. If the family cannot continue to care, the cost to society of institutional care will be very much higher than that of properly supported family care.

There is also a small group of carers who currently receive income support. They are not necessarily in the same household as the person for whom they care, but their caring responsibilities mean that they are unable to be in work—or at least to be in very much work. Around 250,000 people are in that category. They will transfer from income support to universal credit, and, as currently drafted, there is no earnings disregard on that for carers. At the moment, a carer in receipt of income support has a £20 a week earnings disregard, which enables them to do some part-time work as well as their caring responsibilities and still have some financial benefit. An amendment to the Bill on Report was not accepted by the Government, but I hope that they will think again on that point.

There could also be people with caring responsibilities who would fall foul of the proposed benefits cap. A single parent with three or more children living in a relatively high-rent area who also cares for a parent living somewhere else could be affected. The Government have made much of the fact that people receiving DLA will not be affected by a benefits cap, which is good. However, there are people who are carrying out an important caring function who might, in certain circumstances, be covered by the cap. I ask the Government to consider exempting them.

Important changes are also proposed in relation to the money that is given to families with disabled children. Disability additions under universal credit will continue to be given in similar ways to the additions and premiums that are given within the current benefit system. However, the current lower rate of benefit is being halved. We are told that the higher rate is being increased—by £1 a week—but many families who have children receiving the lower rate of payment will have their payment halved. The reason being given for that is that it brings the disability additions for children into line with the disability additions for adults. However, I have a question, one that I have asked previously in relation to these reforms. Why do such alignments always have to be downward? Why is it only deemed to be fair if we equalise downwards—not even meeting in the middle, but equalising downwards—in this way? Given the considerable additional costs that we know families with disabled children have, this change seems to be another particularly harsh one and it will worsen the position of many families.

There is a cumulative effect to all of these changes. There are benefit changes of several kinds that might kick in for the same household, together with changes in the support provided by local authorities for services such as home care. The cumulative effect of all these changes will be very harmful indeed to families who have someone who needs a certain level of care. There will also be a particular effect on the carers themselves, those people who we are only too pleased to praise in this one week of the year. We have to put our money where our mouth is on this subject.

To conclude, I have a number of specific questions for the Minister. What assessment have the Government made of the impact on carers of the estimated £1 billion of cuts to social care services in the current financial year? What arrangements do the Government have in place to monitor what is happening at local level, so that they can fulfil their pledges to improve support for carers? The changes in benefits, such as the change from DLA to PIP and the move to universal credit, could lead to thousands of carers losing carer’s allowance, so is the Department of Health assessing the impact of those changes to families and indeed to services if families can no longer afford to provide care? Will the Minister seek to ensure that carers do not lose out in the welfare law reform proposals? At the moment, we are being told that some of these things will be ironed out, potentially in detailed regulations. So, whatever happens with the Welfare Reform Bill today, detailed regulations could still be needed and I want to know what the Minister will do to raise this issue with her colleagues in the Department for Work and Pensions. Also, do the Government intend to accept the Law Commission’s recommendations set out in its recent report on carers? Finally, how should the forthcoming reform of the funding of social care take account of carers’ contributions?

I thank everyone for their attention to this subject today and I look forward to hearing the Minister’s response in due course.

14:49

[Tony Baldry (Banbury) (Con)]

The whole House owes the hon. Member for Edinburgh East (Sheila Gilmore) a great “thank you” for having secured this debate in carers week. As co-chair with Baroness Pitkeathley, who is in the other place, of the all-party group on carers, I am particularly glad to have the opportunity to take part in this debate.

In the US Congress, there is a wonderful device that allows people to read a chunk of their speech into the record. I am beginning to feel that for Westminster Hall debates I should have a standard set of three paragraphs about the budget deficit, which I will put on my website, and that those paragraphs should be read into the record. I say that because I think that it will be very tedious during the course of this Parliament if Labour colleagues simply come to Westminster Hall and say, “Woe is us, the Government are having to make budget reductions”, and I then have to explain, “Well, actually…”

I calculated all the money that the Government give to my district council, county council, the Thames Valley police authority and the health authority in my area. We are spending more in 11 days simply on funding the budget deficit than we are on funding all those services in Oxfordshire. That is just not sustainable. So we all have a collective responsibility to be grown-up about the challenges that the Government have to face on the national finances.

[Grahame M. Morris (Easington) (Lab)]

We have had this type of discussion before about productivity, deficit reduction and so on. However, is it not the case that the Government have made a firm commitment to protect the most vulnerable people in society and is it not right that Labour Members, who have turned out in numbers for this debate today, should hold the Government to account on that commitment? This issue is about choices and the Government are making a choice here that will affect some of the most vulnerable people in society.

[Tony Baldry]

Of course all of politics is about choices. However, the hon. Gentleman might want to reflect on the fact that the international credit-scoring agencies are now rating Greece as one of the countries that is at greatest risk of having its finances collapse; only Ecuador and Jamaica are at greater risk in that respect. If one does not take responsible actions to maintain the nation’s finances in good order, one runs that type of risk. The Government have made sensible choices about increasing spending on the NHS in real terms, but that means that there are consequences elsewhere and other choices have to be made. I think that we have to be grown-up about that.

[Jack Dromey]

The hon. Gentleman is of course right that those in government, whether that is central or local government, should be wise custodians of the public purse. Can he explain, therefore, why Birmingham city council defied advice that it was acting in breach of the Disability Discrimination Act 2005 and spent £750,000 on pursuing a case that ultimately failed? Would it not have been wiser for the council to have spent that money on care for the elderly and disabled in Birmingham?

[Tony Baldry]

With respect to the hon. Gentleman, it is often difficult for statutory bodies to know where their responsibilities lie and that is particularly so in the world that we all have to live in—a world of emerging human rights legislation. I must declare an interest as a practising barrister. I have to say that the main growth area for the Bar at the moment is judicial review, including judicial review in the Supreme Court, to test the statutory responsibilities of local authorities, and I am sure that we will see more of that. Having said that, I do not think that that gets away from the Government’s responsibility to try to bring the nation’s finances back into some balance.

[Anas Sarwar]

Will the hon. Gentleman give way?

[Tony Baldry]

I am sorry, but I will not give way any more because these exchanges demonstrate why I need to read into the record for future debates the three paragraphs that I mentioned earlier. We would all love to have lots more money that we could spend, but alas that is not the case.

With regard to this particular debate, it seems to me that there is a lot more that can be done to help and support carers without necessarily spending a huge amount of extra money. The first thing that we ought to do, or at least we ought to make a much greater effort to do, is to identify which people are carers and to encourage carers to see themselves as carers. Local authorities provide considerable services for carers, but of course they can only provide those services if people identify themselves as carers.

[Barbara Keeley (Worsley and Eccles South) (Lab)]

Will the hon. Gentleman give way?

[Tony Baldry]

I will not give way, as I just want to make a little more progress.

I was quite interested in a note from Sainsbury’s. Sainsbury’s has been pursuing an initiative in Torbay to help to identify “hidden” carers. It was working with the Torbay Care Trust and it sought to identify customers in its supermarkets who might have caring responsibilities. Staff talked to customers and if it seemed that a customer might be a carer, they were asked if they were in fact a carer. If the customer said, “Yes”, they were then directed to a trained member of the Torbay Care Trust. In a very short period, that initiative led—in just one supermarket—to 140 new people signing up with the Torbay carers’ register.

Sainsbury’s is going to expand that initiative to other stores across the country. I suspect that huge numbers of people who act as carers do not know that that is what they are, for example, husbands and wives who look after loved ones, and young people who look after parents. We should be working as hard as possible to help people to recognise that they are carers. Considerable help and support are available for people who know they are carers. In carers week, one can see that a range of organisations have come together—

[Barbara Keeley]

Will the hon. Gentleman give way?

[Tony Baldry]

I will give way to the hon. Lady in a moment.

A range of organisations that provide advice and support have come together, including Age UK, Carers UK, Counsel and Care, Crossroads Care, Dementia UK, Macmillan Cancer Support, the Multiple Sclerosis Society, Parkinson’s UK and the Princess Royal Trust for Carers, but they obviously cannot give advice unless people actually recognise that they are carers.

[Barbara Keeley]

I agree that identifying and supporting carers is important. Will the hon. Gentleman therefore communicate to the Minister with responsibility for care services that he should support my Carers (Identification and Support) Bill, which the Government have indicated they would not support? The Bill would provide a basis for the proper identification of carers by NHS bodies, local authority bodies and schools. It is more appropriate that public bodies help to identify carers, rather than the task being left entirely to supermarkets such as Sainsbury’s.

[Tony Baldry]

I do not dissent from that, and in a second I will come on to the Law Commission’s report. It is important that we recognise carers, and if statutory bodies can help to identify them, that too is important.

We are fortunate this afternoon to have the Under-Secretary of State for Health present, and I wish to make a couple of points about carers and health. Often nowadays, when a person being cared for goes to see their GP or a specialist, the carer is treated as if they were invisible. The concept of patient confidentiality is being used as a mechanism for denying the person who is being cared for the support of their carer, whether it is children taking their aged parents to see the doctor, or a husband taking his wife or vice versa. Often, the carer is able to provide counsel and care for the person they are caring for, and they should not be seen by the GP or the health service as invisible. The NHS, GPs and the Royal College of General Practitioners need to work out a protocol for how the NHS deals with carers. There obviously have to be some balances concerning patient confidentiality, but it must be possible to work out how the NHS should deal with and respond to carers.

Carers are most concerned about the people they are caring for needing access to the NHS in the evenings and at weekends, when there are out-of-hours systems in place. The out-of-hours GP system was, as it happens, brought in by the previous Government, and it is of variable quality across the country. I think that the Minister will find that one of the growing pressures on the NHS is the number of people who self-refer to accident and emergency departments in the evenings and at weekends, because they can at least be confident of being seen, even if they do not need A and E treatment. They cannot be turned away at the door because the NHS has a duty of care when they turn up. It might be sensible to have primary care triage in A and E departments. We have a Darzi centre in Banbury, but I see no reason why one should not have primary care triage at the door of A and E so that people who do not require A and E services can be confident of accessing primary care without having to hang on on various helplines, or talk to distant voices in which they have no confidence. That would give much greater confidence to carers and to those for whom they were caring, and would significantly reduce the cost to the NHS of the significant number of inappropriate treatments and admission at weekends and in the evenings.

Another responsibility of the Department of Health are carers’ breaks, about which many carers are very concerned. One of the longest running campaigns of the all-party group on carers over the years has been on carers’ breaks. There are supposedly significant amounts of money in the system—some £400 million—for carers’ breaks but, as is the case with so much money, it is not ring-fenced. Some PCTs have been extremely good about that, but we will need to watch where the money goes, particularly as we transfer to GP commissioning. Can we develop systems of best practice? It is not just a question of talking about carers’ breaks; we also need to ensure that systems are in place.

15:06

Sitting suspended for a Division in the House.

15:10

On resuming—

[Tony Baldry]

Let me conclude this part of my speech by asking whether the Minister will give an undertaking that her Department will closely monitor what happens to the money that is allocated for breaks for carers as we move from primary care trust funding to GP commissioning.

Finally, I want to make two brief points. First, the hon. Member for Edinburgh East spoke about the Law Commission’s proposals for reforming social care law. That sounds a rather dry topic, but an enormous amount of Back-Bench time has been invested in it. Most carers’ rights have come about in law because various private Members’ Bills have been brought before the House over the years by the right hon. Members for Coatbridge, Chryston and Bellshill (Mr Clarke) and for Croydon North (Malcolm Wicks), Lord Pendry and the hon. Member for Aberavon (Dr Francis). They have had carers’ rights at their heart, but the need for a carer’s assessment is the gateway.

Often, carers do not know that they are entitled to a carer’s assessment, and many local authorities, perhaps for understandable reasons, do not prompt people to think about asking for one. If such major social care rights for carers were incorporated in primary legislation, it would be the first time that a Government had taken such a step. It would therefore be helpful to know whether the Government intend to accept the Law Commission’s recommendations on carers. The only difficulty with the Law Commission’s proposals is that they deal only with adult carers. Any legislation needs to address the rights of parents of disabled children as well as the rights of the growing number of young carers.

Secondly—I will not repeat the points made by the hon. Member for Edinburgh East—will the Minister help the House in relation to carer’s allowance? To get it, people need to get a certain level of disability living allowance or, in future, personal independence payment. There is some concern and, indeed, confusion about who will be entitled to carer’s allowance in future. It is a significant allowance for many carers, because it is a non-means-tested benefit that signals and validates the fact that someone is a carer. It is therefore a valuable allowance in terms of not only the monetary value, but the recognition that someone is a carer. It would be helpful to have some clarification on that point.

15:10

[Barbara Keeley (Worsley and Eccles South) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Streeter—let us hope that we do not have too many more interruptions.

There cannot have been a more worrying time to have caring responsibilities, given the abuses at Winterbourne View; there must be a real worry that such things are happening in other care homes or hospitals. There are real worries about the future of Southern Cross, which is still very uncertain. There are also the issues that we are discussing, including the cuts to council budgets, which are resulting in the downgrading or loss of packages of care services. Carers have a range of worries and fears, some of which I want to cover, because these are serious problems for many families and it is right that we are debating them today. I congratulate my hon. Friend the Member for Edinburgh East (Sheila Gilmore) on securing the debate and on the excellent way in which she opened it.

It is 10 years since I started to meet carers in the course of research that I undertook for the Princess Royal Trust for Carers. In that work, I met many hundreds of carers, who opened my eyes to the issues with which they live day in, day out. Some time after I entered Parliament in 2005, I introduced the Carers (Identification and Support) Bill—not all Members were here when I said that I will send a copy to the Under-Secretary of State for Health, the hon. Member for Guildford (Anne Milton), and to the hon. Member for Banbury (Tony Baldry) because he seems to support the ideas behind it very much.

This year, the theme for carers week is, “The true face of carers”, and its aim is to highlight what life is like for carers and the challenges they face. New research for carers week shows that 80% of carers are now worried about the consequences of cuts to services. As has been mentioned, the survey of social service directors showed that adult social care services face cuts of £1 billion. The Minister has been asked this question, but I would like to emphasise the point: what assessment have the Government made of the impact on carers of the estimated £1 billion in cuts to social care services? I have some detail on impacts being felt in Greater Manchester.

Whatever we think about it, many councils are having to struggle with the Government’s swingeing front-loaded cuts, amounting to 27% over four years—that is the figure in the Budget. Many have found themselves having to cut grants to voluntary organisations, which is having an impact, and many are increasing or removing caps on care charges. As we have heard, the survey undertaken by my hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) showed that 88% of the councils that responded were increasing charges for social care and 54% were cutting support to the voluntary sector. It is a double whammy—cuts in support and increases in charges.

Like everyone else, carers are hit by increases in the cost of living, which we must also take into account. Fuel costs and VAT affect them in the same way as they affect other people. Most carers are financially worse off than other people, because many have had to cut down on or give up work so that they can care.

For this debate, I asked local organisations in Greater Manchester to tell me exactly how cuts or fears about cuts are affecting carers. A staff member at the Bury, Salford and east Lancashire branch of Parkinson’s UK told me of her experience. She said that there had been a big increase

“in calls from people who are living on very tight budgets with no chance of increasing the family income due to disability and caring responsibilities, distressed because they can’t afford day to day living costs.”

The calls that she receives are about the knock-on effects of lack of money—stress, not eating well, relationship difficulties or breakdown, anxiety and depression. They can lead to illness worsening, and if a carer becomes ill and cannot cope, it can lead to hospital admission. She also said something that ties in with points made earlier in the debate:

“More people with Parkinson’s disease are being turned down for”—

allowances such as—

“disability living allowance and attendance allowance. There is no sense to who gets the benefit and who gets turned down…The distress this causes families is huge because they feel that they are begging. I can only imagine that families who don’t have support miss out completely. The benefit is meant to pay towards the extra costs of having a disability, the fact that genuine people are being turned down means that carers”—

would end up—

“having to do even more.”

My hon. Friend the Member for Edinburgh East raised carers’ eligibility for benefit, which I think is and will become the key issue due to the Government’s programme of cuts and the uncertainty. The Minister has already been asked the question, but will she tell us in this debate what the impact will be if those carers who lose their carer’s allowance decide that they can no longer afford to care? The responsibility for caring will then fall to the local council and the state.

[Jim Shannon (Strangford) (DUP)]

I do not think of my constituency as different from anyone else’s, so I am sure that the hon. Lady will agree that young carers clearly play an important role. Those who are 16 years old and under do not qualify for any financial assistance, but their role is critical for the family, parents and those they look after. Does she feel that the coalition Government should address the importance of young carers?

[Barbara Keeley]

I very much agree. I have a point to make later about that topic, because the staff who work on the young carers project in my constituency have said that they are very concerned about carers losing their education maintenance allowance. That is the one support that the state gave young carers and it is going, which is a worry.

To return to the testimony from Parkinson’s UK, the final points were about more carers contacting the staff member to ask for help finding respite because they are struggling to cope; financially, they cannot now afford a break, a treat or a holiday. I am glad that the hon. Member for Banbury raised that point. The staff member said:

“I know of one carer who has had to take on a part time cleaning job in the early evening because money is so tight. She puts her husband to bed before she leaves”—

for work—

“at 4pm so that he is safer and so she won’t worry that he will fall while she is out.”

I think that we would agree that we would rail at care agencies that put a person to bed at 6 or 8 o’clock, yet this carer has to put her husband to bed at 4 o’clock because that is the only way that she can do the cleaning job that she has to do.

I also had some input from a branch of Age Concern in Greater Manchester about how cuts to grants are affecting its dementia support service, which is important because it is another line of support. Cuts to grants of 40% over the next three years are affecting its capacity to deliver individual and group support. That goes against objectives 5 and 7 of the national dementia strategy. The staff member told me:

“Carer support groups have had to close. These are groups where carers can get a break, have a chat to other carers and get advice and information from staff. These groups help to maintain morale and prevent carers from becoming socially isolated.”

Even though there are personal budgets, which will come in in Greater Manchester, carers of people with dementia often find it hard to mix in other social groups because of the “different” behaviour of the person with dementia. Carers have described the groups as a “lifeline” and something “to look forward to”. The fact that they are being cut back is important.

The proactive support to carers of phoning them every few weeks is another aspect of Age Concern’s work that is being cut. The staff member said:

“We now have to wait for them to contact us for time-limited intervention. We know that many older people are proud and longsuffering and will often suffer in silence rather than ask for help.”

Before the cuts, branches of Age Concern in Greater Manchester ran special events for carers such as a carers day each year, parties and trips. The reduction in funding means that it can no longer offer the extras that it knows give people a better quality of life. I am very concerned to hear that carers in my area in Greater Manchester are starting to suffer.

I want to return to the two sides to the debate—values and choices. We are fortunate in Salford because, due to the way in which the cuts and the organisational turmoil in the NHS are being managed, we are not suffering as much as other areas. There are choices. Labour-run Salford city council is now one of only 15% of local councils still providing support to people with moderate care needs, as well as to those with substantial or critical needs. We are fortunate to have an excellent carers’ centre run by the Princess Royal Trust for Carers. Salford has tried to ensure that carers continue to be supported through these difficult times. As I mentioned earlier, however much the council and our local NHS bodies support carers and try to maintain what they are providing, the national changes and cuts affect our carers.

The young carers project will be affected when the young carers lose their education maintenance allowance. The centre manager told me of two other concerns: the changes to benefits and disabled people being called in to take work capability assessments. The extra worry of having to take them and of having benefits curtailed are starting to affect carers.

The centre manager also said that a major concern for her organisation was that although the carers’ centre was very well established, the service has to go out to tender through the joint commissioning process next year. She said:

“We are aware of a number of carers’ services which have gone out to tender in other areas, and bids have come in from organizations and agencies which have no experience, knowledge or expertise in carers and carer issues, including organizations from abroad.”

What reassurance can the Minister give to staff of the carers’ centre that an established, trusted and effective organisation such as theirs will not be undercut in the tendering process by organisations with no local knowledge and no experience or expertise with carers or in carers’ issues? Our carers in Salford would lose out if they lost the valuable support that they get from their carers’ centre.

The Government’s economic policies are damaging support to carers. Government cuts to local council budgets have gone too far, too fast. Councils pleaded not to have their budget cuts front-loaded. We have lost £1 billion from adult care services at a time of rising need, and we have lost billions in grants to the voluntary sector, but the worst thing is that we are only a few months into the first year of cuts, and we can already see the impact on carers. Carers are fearful about the cuts and distressed that they cannot manage financially. People with serious conditions such as Parkinson’s are being turned down for attendance allowance and made to feel like beggars if they appeal. Young carers are losing their education maintenance allowance. Carers are now unable to afford a break or holiday. It is shameful that a carer should have to take a part-time cleaning job and put her husband to bed at 4 pm.

That is not a record of which the coalition Government can be proud, and it is so early in this Parliament. I hope that carers week gives Ministers time to rethink the impact of the cuts that they are making.

[Mr Gary Streeter (in the Chair)]

Colleagues, three Members have sought to catch my eye, and we have 19 minutes before winding-up speeches begin, so can we regulate ourselves to about six or seven minutes each?

15:31

[Mr Mark Williams (Ceredigion) (LD)]

Thank you, Mr Streeter. It is a pleasure to serve under your chairmanship this afternoon. First and most importantly, I congratulate the hon. Member for Edinburgh East (Sheila Gilmore) on securing this debate. It is the most timely debate that we could imagine, given that this is carers week. The hon. Members for Stretford and Urmston (Kate Green) and for South Thanet (Laura Sandys) and I were asked by Carers UK to act this week as carers’ ambassadors in our constituencies and elsewhere to promote some of Carers UK’s key messages.

On the true face of carers, the reality is that there are so many different faces, stories and anecdotes. As we have heard, there are 175,000 young carers. There are carers in work or grappling with the prospect of staying in work while managing their caring responsibilities—I will say a little about that in a moment—as well as elderly carers. We receive many different stories in our e-mails and postbags every week.

Let us celebrate carers week. It is about celebrating the invaluable work that carers do and showing our appreciation of those who give up their time, sometimes at a cost to their own health and financial well-being. That message has come loud and clear from many Members in this debate, and I echo it. I will focus my remarks on some of the personal experiences that constituents relay to us.

We as a society unquestionably rely on carers to provide a service, and there are clear benefits to people caring for their loved ones: not only do they make them more comfortable, but they reduce pressures on health and social services. I was privileged this week to launch a carers week event in my constituency. It involved the book “Dywedwch ‘’Dwi’n iawn’…a’i Olygu”—the hon. Member for Newport East (Jessica Morden) might be able to understand that—or “Say ‘I’m Fine’…and Mean It”. It is a good book that promotes some of the services available in my constituency and more widely. It was produced by Ceredigion council and a local project called Mind Your Heart to give carers advice on maintaining their physical and mental health. It is an excellent project. I agree with the hon. Member for Banbury (Tony Baldry) that the voluntary sector has done and is doing much, although that is being impinged on by the scale of the decisions made here and, in the context of my constituency, in the Welsh Assembly.

The outcome of a Wales-wide survey of carers—we heard the UK figures from the hon. Member for Worsley and Eccles South (Barbara Keeley)—revealed the extent of their concern and worry. As many as 71% of carers have suffered health problems as a result of caring, 64% have had to give up their career ambitions and aspirations since taking on their caring roles and 63% of carers were surprised at how hard it is to be a carer. Sometimes, at comparatively short notice—even very short notice, such as after a car accident—carers suddenly discover that they must undertake a life-changing role. Some 43% of carers have a disability, condition or illness themselves. I met an 88-year-old constituent on Sunday evening who had cared for his wife, also in her 80s, for many years. Carers week is an opportunity to highlight such issues and concerns, given the inevitable decisions on the deficit that the Government must take.

The title of this debate, commendably, refers to the effect of spending reductions on families. I will address that, but it is important to recognise that some decisions and prospective decisions made by Government could be good news for carers. However, there is a great deal of work to be done. The Government are embarked on a consultation on proposals to extend the right to request flexible working. I introduced a ten-minute rule Bill earlier this year to extend the definition of carers within current flexible working regulations and provide for so-called day one rights, allowing carers to request flexible working from when they start a job, rather than after waiting six months. I launched a lottery-funded project in my constituency with Crossroads Care and various local chambers to assist carers and boost their confidence in returning to the labour market where their circumstances permit it. The challenge of finding the confidence to return to the labour market after caring should not be understated.

We have had good news that the Government plan to introduce a right for all workers to request flexible working, which is to be welcomed as a big step forward. The Government have recognised that many successful modem businesses acknowledge the importance of respecting that their staff will have other responsibilities and that the best way to ensure that they remain motivated and reach their potential is to give them the flexibility that they need. It is a big issue. More than 150,000 people in Wales who are in paid employment have unpaid caring responsibilities. However, the Government have been less forthcoming on day one rights. There is a perception that it is somehow unfair for people who have just been appointed to a job to request flexible working. I contend that people should have the right to request flexible working at the outset. Many of us share the view that if carers wish to work, they should be given as much support as possible, but there is a barrier.

I have one minute, so I will rattle through my next points. I agree with colleagues about the concerns expressed by the hon. Member for Banbury, and consistently by Labour Members, on the arrangements for carer’s allowance, changes to disability living allowance and the uncertainty involved. As the hon. Member for Edinburgh East said, clarity is lacking on those matters. I also agree with the principle that if we embark on major changes, there must be a process for monitoring, evaluating and reporting back on them. Work on the awareness of benefits is fundamental as well.

To return to my original point, a quote from a carer in my constituency illustrates why carers week is so important in highlighting cases. A lady in my constituency who will remain anonymous cares for her disabled son. She says:

“I note the activities locally for carers week in Ceredigion, in which you are involved. I cannot attend such activities, as I am trapped at home looking after my son. When I do have time without him (when he is at school) I am at work trying to retrieve our family’s financial affairs from the effects of my son’s disability and trying to keep some semblance of a life for myself apart from my son. Disabled people and their carers are very often voiceless for these reasons. This sounds dramatic, but it is a very small divide between coping and not coping. And the implications of not coping are horrific.”

That is why this debate is important, why carers week is important and why it is crucial for all of us to continue to press the case for carers’ rights.

15:39

[Grahame M. Morris (Easington) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Streeter, for the first time in a Westminster Hall debate. I echo the tributes to my hon. Friend the Member for Edinburgh East (Sheila Gilmore), whom I congratulate on securing this important debate on the effects of spending reductions on families with caring responsibilities, not least because of the important changes being made in the House of Commons in the Welfare Reform Bill.

I want to confine my remarks to a couple of issues, because of the shortage of time. A survey of more than 2,000 carers was recently carried out for carers week. It shows that 80% of unpaid carers are worried about cuts to services and that about 50% are unsure how they will be able to cope without the vital support that they currently receive. For the record and for anyone who is not involved directly as a carer, it is worth stating that three out of every five people will be an unpaid carer at some point during their lives. To respond to the point made by the hon. Member for Banbury (Tony Baldry), those unpaid carers save the economy a huge sum. It is difficult to quantify it, but it may be more than the total NHS budget—£103 billion each year.

We have done some research in County Durham. I am proud to speak up for the vulnerable, the disabled and for carers. My county alone has 61,000 carers and the estimated moneys saved to the public purse by the very important work that these unpaid carers carry out are £1 billion a year. We should not be dismissive of their needs and requirements. Each carer who works for nothing saves the Government, the taxpayer and the Exchequer the cost of a care worker, which is about £18,000 a year.

My own constituency of Easington is characterised by long-term ill health. As the hon. Member for East Londonderry (Mr Campbell) has mentioned, many carers, particularly in my area, are themselves victims of ill health. That was highlighted by a recent report by Carers UK. The legacy of coal mining and heavy industry has left many thousands of people debilitated in later life by long-term disabilities and in need of care, which is often provided not by the state, but by close family members.

I shall speak briefly about a number of issues. In particular, I want to draw Members’ attention towards, and place on the record, the effects being felt by some of my constituents as a result of the transport costs they now face due to local government cuts, and towards respite care, which has been mentioned. I also want to ask the Minister a couple of questions—I hope that she will answer them—about carer’s allowance and the provisions in the Welfare Reform Bill.

A constituent who came to see me recently is a full-time carer for her husband. She has one day a week of respite care. Her husband attends a day-care centre in Grampian House, in Peterlee in my constituency, once a week for four and a half hours. That is the only break she has. It is an excellent facility and I pay tribute to its care staff. I have visited it myself and a close relative of mine is in there. They do tremendous work in terms of physiotherapy and rehabilitation. However, from September, due to the front-loading of cuts of £67 million this year to my local authority of Durham county council, transport to the centre will be cut. It will cost my constituent £72 for specialist transport, which means that she will not be able to take her break and take advantage of the respite care.

The issue of transport has been raised by many of my constituents. They understand that cuts to social care by local authorities are due almost entirely to the swingeing, front-loaded cuts that the Government have imposed. Councils are struggling to cope with massive funding reductions from central Government.

People are also aware of the impact that the Government’s £18 billion package of cuts to the benefits system will have on carers in particular. The Government accuse Labour of rejecting welfare reform, but I am proud to say that we stand firm on the principle that the most vulnerable should not be paying that £18 billion when some of the richest in society—most notably, the bankers and the banking sector—contribute only between £2 billion and £5 billion to the cost of the deficit.

I shall conclude my remarks, because time is short. Another big issue that has been raised is that of ring-fencing moneys for social services, with a distinctive sum identified for carers’ services—the carer’s grant. Although it was not ring-fenced under the previous Government, councils at least knew how much money they were receiving for that purpose. The Minister has responsibility for public health and I would like to congratulate my own soon-to-disappear primary care trust, County Durham PCT, on clearly ring-fencing, identifying and spending its allocation from the Department of Health on the provision of respite care for people with disabilities and their carers.

How will the Government fulfil their pledges to improve the support for carers in the face of massive cuts to local government? How will the Government ensure that the proposed reforms, outlined in the Welfare Reform Bill, do not result in carers losing their carer’s allowance? The Government could give two promises that would give confidence to those who are most vulnerable and most in need. First, budget cuts should not result in carers losing the services that they rely on. Secondly, carers should not lose out under changes to the benefits system.

[Mr Gary Streeter (in the Chair)]

I call Rosie Cooper, who has four minutes.

15:46

[Rosie Cooper (West Lancashire) (Lab)]

Thank you, Mr Streeter, for the opportunity to contribute to this vital debate, and I congratulate my hon. Friend the Member for Edinburgh East (Sheila Gilmore) on securing it. I will not rehearse the arguments that we have already heard, because time is short.

As a carer for my 86-year-old father, who was born deaf, I have a deep personal understanding of the issues and challenges that many carers face. I am deeply concerned that the decisions taken by this Government will massively compound the financial and emotional pressures that carers face. Others have discussed the national policy changes, but I would like to talk quickly about issues that affect my constituents.

Both of the two cases that I wish to address relate to services provided by Lancashire county council as the social care provider in my constituency. The Derby day centre is a fantastic facility in Ormskirk. The staff are committed to providing high-quality care and support to people who use the centre. It offers a wide range of facilities to meet the needs of the individual, whether they have dementia or a physical disability. I have visited the centre many times and I am always impressed by it.

In a shock move, however, Lancashire county council has announced that it is increasing the daily cost from £5 a day to £30.75. That is not a small increase, but an increase of nearly 500%. I wonder how that fits with the mantra of not affecting front-line services. The council says that, this year, it will not charge users more than £30 a week extra. However, next year that will also increase so that people will not pay more than £60 extra. It is clear that, before long, anyone attending or wanting to attend the centre will have to pay the full cost of using it. Today, my office received a call from a centre user’s family who were angered by the scale of the increases. For them, the cost will rise from £40 a month to £160 a month for two days a week at the centre. That is just one issue in Ormskirk. There are many cases in which the elderly or disabled are being impacted by Lancashire county council decisions. The dial-a-ride service, for example, has been almost decimated. Some families will grumble about the cost but will be able to pay. Others will not be able to meet the costs and the council will help. However, a great number of families in the middle will be sitting at home wondering whether, financially, they can afford to continue to use the centre and, conversely, whether, emotionally, they can afford not to.

The second case is a group of mums who told me of their concern about funding for Aiming Higher for Disabled Children. That programme finished at the end of March and since then no short breaks or activities have been available for families, even for a day or a few short hours. The county council has said that it will consult parents on how the scheme will work but, in the meantime, there are no services—zilch, nothing. No support is being offered whatsoever, and that is a huge burden. I understand that the summer holidays are coming up and that interim arrangements will be made, but that still does not address the proper concerns that exist. In 2010-11, the funding for Aiming Higher was £4 million. Officers are now telling us that only £3.5 million will be available for two years. That is a reduction of a half. Does the county council believe that half the need for the scheme will evaporate while it is considering its budget cuts, or is it dumping the care, responsibility and the cost of children with disabilities back on to hard-pressed parents?

I will end my remarks because I have to cut them short. I am really, really sad that when the local newspaper asked me about the matter, I said, “Well, this is now the typical Conservative attitude. They know the price of everything and the value of nothing.” I find it gut-wrenching that the elderly and the most vulnerable will have to live with the consequences of the Government’s decisions. We keep hearing that we are all in this together. Families with caring responsibilities in West Lancashire are now realising that some people are in this more than others. How can the Minister justify this, and look carers and their families in the face?

15:51

[Emily Thornberry (Islington South and Finsbury) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Streeter. The debate could clearly have gone on for twice or perhaps three times as long. A feature of it has been the number of people who wanted to speak and have not been able to. My hon. Friend the Member for Newport East (Jessica Morden) wanted to speak, as did my hon. Friend the Member for Birmingham, Erdington (Jack Dromey). My hon. Friend the Member for Glasgow Central (Anas Sarwar) had also prepared something, and my right hon. Friend the Member for Croydon North (Malcolm Wicks) had told me that he wanted to make a contribution. The fact that many people have shown an interest in the matter demonstrates its huge importance.

I congratulate my hon. Friend the Member for Edinburgh East (Sheila Gilmore) on securing the debate. It is very easy to come out with a number of platitudes about carers, but carers want to hear what we will do to help them. Carers probably save this country more in money than is spent on the national health service. By 2017, it is likely that the UK will reach a tipping point, as the number of older people needing care will exceed the number of people of working age with families. There will be a crisis and we need to ensure that we are up to dealing with it. We must be able to support those people on whom we rely entirely. As has been said, if anyone is demonstrating the Prime Minister’s big society, it is carers up and down the country, so we need to look after them.

Where is the good news? There is some good news, which has come from the Law Commission. It has published a report that has largely received broad support from social care groups. A number of proposals are well thought out and will be well received, for example, rather than the carer needing to request an assessment, the local authority will have a duty to provide one. In addition, those assessments should be made for people who provide some care, rather than being restricted to those providing substantial care. Both those proposals are sensible. The third proposal is to ensure that a national system of eligibility assessments will provide some consistency across the country and allow people to move from one local authority to another without there being a huge time lag, which causes great distress to families. That will allow some portability of care.

The Under-Secretary’s brother Minister who is responsible for care, the Minister of State, Department of Health, the hon. Member for Sutton and Cheam (Paul Burstow), has so far welcomed the Law Commission’s report. In his pre-coalition past, he expressed support for many of the ideas it recommends. However, many of the issues will not come within the Department of Health’s ambit, but within that of the Department for Communities and Local Government. Given that the Secretary of State for Communities and Local Government has indicated that he wants to conduct a review of local authority duties, there is some concern that he may be resistant to a new duty being put on local authorities to ensure that carers are assessed as well as the person needing care. I hope that that is not the case and that people are speaking strongly in his ear, so that the Law Commission’s recommendations can be implemented in full because they are to carers’ advantage.

The other piece of good news may be the Dilnot inquiry. I met Mr Dilnot again today. He is very generous with his time and is meeting a broad range of people. The meeting he had with me and my right hon. Friend the Member for Wentworth and Dearne (John Healey) was the first of eight meetings that he is holding today. Of course, we all agree that we need to make fundamental changes, that the status quo will not do and that we must have a fundamentally reformed care system. The Opposition believe that there should be high-quality care for those who need it and that care needs to be funded in a fair way, with proper accountability for those who deliver it.

We repeat the Leader of the Opposition’s invitation, which was made on Tuesday 7 June. We welcome cross-party talks and we would like them to happen as soon as possible. We will come with an open mind because we want to be able to work together for the best way forward. I understand that the Prime Minister has welcomed that approach, but we still have an empty diary and we want to be able to get on with it. If the failures of the past are repeated, we will not be forgiven by those who use the care system or their families. It is important to remember that, even with co-operation and a fair wind, we are unlikely to see any of Dilnot’s suggestions implemented until 2014-15. The current problem for carers is what is happening now to the social care system and their support .

I am afraid that that takes me to the end of the good news and into the bad news. As has been said very eloquently by my hon. Friends, social care cuts are clearly having a fundamental impact on the lives of carers. I was going to congratulate the Minister of State, Department of Health, the hon. Member for Sutton and Cheam on finally taking his fingers out of his ears, stopping singing, “La la la la la,” and accepting that the cuts to social care will affect front-line services. That is inevitable; there is no other option. Given that social care is top-tier councils’ biggest area of discretionary spending, we simply cannot have 27% cuts to local authorities without there being cuts to social care. It just does not work. Unfortunately, the Government have ignored the advice of the Association of Directors of Adult Social Services and the Local Government Group, who know what they are talking about.

Although no centralised assessment of the impact of the cuts to local government on social care was carried out, several people have done the Government’s job for them. A wealth of evidence has been provided by ADASS, the BBC and my own survey. As has been mentioned, my survey of the directors of social care received 61 replies from councils and shows some very worrying results. I am pleased that the Minister of State, has complimented my survey as being robust, accurate and, indeed, more reliable than that done by the BBC. However, he needs to look at the impact of it and what it means. We will do the survey again next year and the year after, and I am afraid that we will not get good news.

ADASS has shown this year that the shortfall to adult social care spending is £1 billion. The Government have done their best not to affect adult social care, but next year they have to cut again and the year after they have to cut yet again. If things are bad now, as has been so eloquently reported by my hon. Friends, where are we going? Do the Government have any idea of the impact of these cuts on carers? This has already been asked, but I repeat: how many of those who no longer meet councils’ very narrow eligibility criteria will need to rely on the informal care provided by their families? Do the Government know how many carers will have to go without support from their local authorities and will, as a result, be forced to give up work to meet their new obligations?

I was particularly pleased to hear what the hon. Member for Banbury (Tony Baldry) said about respite care—I support him in that. The Government are right—our Government was right—to ensure that money is put aside for respite care. The difficulty is that the mechanics do not work. Primary care trusts have been given that money. It is not ring-fenced. It is not clearly labelled. There is no accountability. The Department of Health is very unclear about which PCTs have spent it, in what way, how much they have worked with local authorities, or how much they have worked with carers—there is no overall picture. Frankly, is that not the sort of thing that the Government should do? It is not just a question of handing out the money. Surely there needs to be some form of accountability.

The Princess Royal Trust for Carers has been doing its best to conduct an audit of that, just as I am doing an audit of local authorities and the impact of the cuts on social care, but surely that should be a job for Government. Surely the Princess Royal Trust for Carers has things to do other than conduct an audit of whether the money given by the Department of Health to PCTs for respite care for carers is actually being spent on carers. That is part of the knock-on effect of the chaos that has been created through the proposed partial abolition of PCTs in the Health and Social Care Bill. What action will the Government take if PCTs do not work with local authorities and carers of organisations to publish plans and budgets?

The other piece of bad news, which has been mentioned, is welfare reform. We welcome the Government’s announcement that carer’s allowance will be outside universal credit. We also welcome the news that disability living allowance will be excluded from the overall benefit cap. However, the bad news is that, when the Government talked about introducing personal independence payments, they said that there would be a 20% cut to DLA. It is not just a 20% cut to DLA. Those people will not be springing from their beds, suddenly well. People with dependants will still be there. Not only will they, but their carers will lose their money, because carer’s allowance will be attached to DLA. There will, therefore, be a huge impact on the families of those people who are losing their DLA. Do the Government have any idea of how many carers will lose out as a result of moving DLA to the personal independence payment and the 20% cut? Are the Government aware that carer’s allowance is not excluded from the proposed benefit cap, while DLA is? I am sure that the Minister would agree that that is, at the very least, not consistent, let alone fair.

[Mr Gary Streeter (in the Chair)]

Order. It may help the hon. Lady to know that the debate ends at 4.10 pm, and I want to give the Minister some time to respond.

[Emily Thornberry]

May I just come back to this last point? It is shocking that, at a time like this, carers suffer in the way that they do. It is a question of priorities and hard choices. As my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) so eloquently put it, it is not right that a woman has to put her husband to bed at 4 o’clock in order to do a part-time cleaning job to pull things together. It makes “We are all in it together” hollow rhetoric.

16:02

[The Parliamentary Under-Secretary of State for Health (Anne Milton)]

It is a pleasure to serve under your chairmanship, Mr Streeter. Time is very short. I have about seven minutes, so I say up front that I will ensure that hon. Members receive a note to answer the questions that I will not be able to address. As the hon. Member for Edinburgh East (Sheila Gilmore) knows, this is an important debate. Like her, I would like to feel that this is about more than just press releases this week. Indeed, we praise carers this week. We should praise them every single week and every single day—those we know about and those we do not.

As the hon. Lady knows, in her constituency the Scottish Government have overall responsibility for devolved budgets and I am sure that she will therefore take up some of the issues with them. I note the cautionary tale about ring-fencing—mentioned by a few other hon. Members—and also tracking funding. Local authorities, however, have a duty to provide community care to those who meet eligibility criteria. The Department has set out an eligibility framework, which is important to bear in mind.

Who cares for the carers? Somebody first said that to me a very long time ago—in fact, when I was a district nurse. Those with caring responsibilities need care themselves, so that they can maintain their own health and well-being. Although it has not been mentioned today, the figures on the physical, mental and emotional health of carers are shocking.

Care and support services from both the statutory and voluntary sectors face challenges, irrespective of funding, like never before. Demographic changes mean that most of us will either become carers or need care. Some of us already care for children with disabilities and are often lifetime carers. Others care for partners as they grow older; some for ageing parents, neighbours or friends. Carers come in all shapes and sizes, and with different needs. It is important, when government at any level tries to meet the needs of carers, to recognise that they need specialist and personalised help, which is why personalised budgets are an important step.

I will run through some of the money that is coming through, so that hon. Members can raise, with their local authorities, what is happening to it. The spending review allocated an additional £2 billion by 2014-15 to support the delivery of social care. Some of that funding is already getting through. Some £162 million went in during January, which was money transferred from NHS budgets to support care services that improve people’s health and support carers. A further £648 million will pass to local government in England in the same way. A further £1.3 billion is now supporting the transfer of funding and the commissioning of learning disabilities services from PCTs to local councils, which will help. One hon. Member raised the issue of integrating services. That is very important. It applies to several Departments, and it is also true at local authority level.

Taken together, that is the biggest ever transfer of hard cash from health to social care. That is an important development and comes on top of the £530 million for social care this year from the Department of Health, which we rolled up into the Government grant formula. The Department for Education is providing more than £800 million in the next four years for short breaks—they are absolutely critical; respite breaks are a lifeline to parents of children with disabilities—as part of the new early intervention grant.

We recognise that the current funding system needs overhauling. We cannot avoid the wider challenges that demography brings us. My hon. Friend the Member for Banbury (Tony Baldry) was 100% right about how the money is spent, and the hon. Member for Edinburgh East also mentioned monitoring. It is extremely important that we identify carers early, so that we can meet their needs early and they can continue to do what, essentially, they want to do, which is to care for those who live with them.

The Dilnot commission will report in July and will help us find new ways to modernise the funding of social care and ensure that it is more in line with the demands and expectations of the 21st century. The carers strategy, which we published in November 2010, sets out our priorities. Those priorities are important because we measure what central Government and local authorities do against them. They are: to support those with caring responsibilities to identify themselves as carers at an early stage, and involve them in designing local care provision and planning individual care packages; to enable those with caring responsibilities to fulfil their educational and employment potential, which is absolutely critical as young carers do not necessarily get to any step on any ladder as far as education and employment are concerned; to personalise support for carers, which is critical, and to support carers to maintain physical and mental wellness, because the physical burden of providing care for a friend or family member can be significant. Ideally, carers who are identified at an early stage can get the help that they need.

My hon. Friend the Member for Banbury mentioned the work that Sainsbury’s is doing. We should congratulate it. Of course, it is not a substitute for other things, but it is an important addition. Tomorrow morning, the Minister with responsibility for care services will launch a new e-learning tool for all GPs, developed in partnership with the Royal College of General Practitioners and the Princess Royal Trust for Carers. That will be an important tool in enabling GPs to do what we need them to do. The Department of Health has made a further £1.5 million funding available for other initiatives to support GPs to help carers further. Alongside the carers strategy, we published examples of how the principles of personalisation have been applied locally, emphasising the value of finding ways forward that make sense and work best locally.

I have to say to Opposition Members that the country is financially where it is because that is where we found it when we took over from the previous Government. The hon. Member for West Lancashire (Rosie Cooper) shakes her head. We cannot get away from the fact that we inherited a massive budget deficit that we are now having to tackle. Opposition Members look as if they are in denial. The hon. Lady, who is a sensible person, asked how we could look carers in the face, but how can members of the previous Government look carers in the face? We have been left with some difficult decisions. We have to ensure that every £1 of taxpayers’ money actually buys £1-worth of care, to support carers in the ways in which they need it.

Eyesight Tests (Drivers)

Wednesday 15th June 2011 Westminster Hall

16:10

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

I am delighted to have secured a debate on eyesight regulations for drivers, especially as we are in the middle of national eye health week. As I speak, an event to mark the week is taking place in Parliament, and in my home city of Sheffield a wide range of organisations is holding an awareness day in the city centre. South Yorkshire police, in conjunction with the Sheffield Royal Society for the Blind, are focusing on the issue that brings me here today: the importance of good sight for driving and, in particular, drivers who do not realise that their sight is deteriorating.

I have been engaged on the subject for some time. I was contacted by my constituent Joy Barnes, whose niece tragically died in a road accident caused by a driver whose eyesight was not up to the necessary standard. Joy’s niece, Fiona Buckley, was just 43 when she died. She was born with spina bifida and hydrocephalus, so spent much of her adult life in a wheelchair. Fiona worked in the city centre Shopmobility service and in the Royal Hallamshire hospital as a welcomer. A bubbly person, she enjoyed a lively social life and, in her younger days, was an accomplished swimmer, later becoming an avid photographer and Scrabble player. Her family describe Fiona as a generous and courageous spirit.

At 10 pm on 6 December 2008, Fiona was crossing the road, with her friend Kay Pilley walking just behind. Witnesses said that the car approaching did not attempt to overtake or brake, but ran straight into them, and Fiona was thrown over the vehicle. She suffered a major head injury and her pelvis, spine and leg were broken. Six weeks later, she died in hospital from multiple organ failure. Kay suffered head and knee injuries and was treated at hospital; she could not remember what had happened.

Police officers subsequently tested the 87-year-old driver’s eyesight, and found that he could not read a car number plate from the required distance of 20.5 metres. He was later found to have cataracts in both eyes, which had probably been there for some 18 months. A doctor said it would give him “foggy or hazy” sight that could have rendered Fiona almost invisible to him. He also suffered from age-related macular degeneration, which blurs the central vision. With his right eye, he could see only from 6 metres what people with good vision can read from 24 metres. The driver admitted causing death by careless driving, but the judge decided not to punish him for killing Fiona. The driver was given only three penalty points. Fiona’s aunt, Joy Barnes, speaking on behalf of her wider family said:

“Fiona’s death hit us all hard. The driver should not have been on the roads with such poor eyesight and it is a travesty that nothing is done to make sure that drivers meet a minimum standard of sight. If this driver had been made to have a sight test to keep his licence then Fiona would still be with us.”

During the current driving test, the examiner gives the driver three chances to read a number plate, from 20 metres for vehicles displaying the new-style plate or 20.5 metres for old-style plates. Following that, the drivers of cars, small vans and motorbikes need not take any form of eye test for the rest of their life, unless they voluntarily report that they have a serious vision impairment to the Driver and Vehicle Licensing Agency. Once drivers have reached the age of 70, in order to renew their licence they are asked to confirm that they have acceptable vision, but they are not required to prove it.

The Department for Transport has been consulting on the medical standards that should apply to eyesight tests for safe driving. Astonishingly, the Department is proposing that the testing distance should be reduced from 20.5 metres to 17.5 metres. The Sheffield Royal Society for the Blind is extremely concerned that any relaxation in the requirements could be detrimental to road safety. Can the Minister give me details of the evidence that was considered before reaching that proposal? What is her evidence to suggest that such a test is adequate in any way?

The current eyesight test is simply no longer fit for purpose. In contrast with the tragic death of Fiona Buckley, it is not possible to attribute many road accidents directly to poor eyesight. Eyesight is often only one of the factors that might be involved; others include the time of day, the weather, the condition of the road and tiredness. However, it is common sense that poor vision will impair any driver’s performance, even taking into account all other conditions.

The distance number plate test has been in place since the 1930s and is outdated. It has remained unchanged, despite increased numbers of vehicles on the road and developments in road safety standards and clinical technology. It is not scientifically based and does not reflect modern day knowledge of vision. The number plate test also only measures visual acuity—put simply, the ability to see at a distance. It does not produce consistent results and can be affected by environmental conditions. Drivers can fail the test in different lighting or weather conditions. Several scientific publications have questioned the accuracy and reliability of the number plate test as a method of screening visual acuity. Also, it does not test visual field—put simply again, the ability to see around while looking straight ahead. Visual field loss can advance significantly without a person becoming aware of a problem. For instance, glaucoma is a condition that someone can have and yet pass a number plate test with insufficient field vision.

The current system also requires self-reporting and therefore relies on individual drivers being aware of the required standard, realising that they do not meet it and knowing that not notifying the DVLA of any problem is a criminal offence. However, many drivers do not notice what can be a gradual change in their vision, remaining unaware that they fall below the required legal eyesight standard.

[Jim Shannon (Strangford) (DUP)]

I can suggest one method of checking everyone’s eyesight, including mine. I register an interest as a diabetic—type 2 of course, controlled by diet. If people visit an optician every year, the optician tells them about their eyesight. Might that be a method whereby people can check if their eyesight is deteriorating?

[Meg Munn]

The hon. Gentleman makes an interesting point about what could be done if the current system, which puts the onus on the driver, continues. I will argue, for good reasons, that an eye test should be a requirement.

Many people with glaucoma do not have any symptoms until the condition is quite advanced. The National Institute for Health and Clinical Excellence guidance advises that once vision loss becomes apparent, up to 90% of optic nerve fibres might already have been damaged. The general manager of Sheffield Royal Society for the Blind, Steve Hambleton, said:

“when people are diagnosed with an eye condition that impacts upon their ability to drive safely, the onus is on the driver to notify DVLA. We encounter too many people who do not do this and continue to drive. In these days of data protection etc., it is extremely difficult if not impossible for organisations such as ours to advise DVLA of our concerns.”

Last month, I attended the launch of the UN decade of road safety, which was addressed by the Secretary of State for Transport. The UK has a proud record: Great Britain had the fourth fewest road deaths per million people, we have been in the top five performing countries throughout the past decade and we were in first place in 2009. Yet on eyesight testing, we are lagging behind many countries and many of our neighbours in the European Union. The EU has recently published directives to standardise driving licences and to harmonise European standards. The UK lags behind best performance of most other European countries in assessing drivers’ vision. A report released only this week outlines that a majority of EU member states assess visual acuity and visual fields in advance of issuing a first full driving licence. The UK is among the minority that requires no further assessment of vision throughout a driving career.

The 2006 and 2009 EU driving licence directives continue a long path to harmonise driving licences with the overall aim of improving road safety and facilitating enforcement throughout EU countries. Is the Minister really content to see our otherwise excellent record on road safety lag far behind the best practice of our near neighbours? Given that the EU directive recommends a visual field of at least 120 degrees, how can the number plate test be sufficient to comply?

The only way to make sure that drivers continue to have adequate vision is to make eyesight testing mandatory at regular intervals throughout the time they hold a licence. Drivers should have to provide regular proof that they have had their eyes tested by a medical professional and that they meet minimum standards for visual acuity and visual field. That should happen at least every 10 years, coinciding with drivers renewing their photo driving licence. That would be a simple and inexpensive step that would vastly improve the eyesight of drivers throughout the UK. I also recommend that when drivers reach the age of 70 and have to self-certify that they are fit to drive, they should be required to submit evidence from an appropriate professional that they have a safe and legal level of eyesight.

The present inadequacies must be addressed. That view is supported by the Optical Confederation, which represents 12,000 optometrists, and the 6,000 dispensing opticians and 7,000 optical businesses in the UK. Those organisations and many others concerned with road safety have submitted their concerns to the Department for Transport's consultation. Will the Minister report on the outcome of the consultation, and when will the Government respond to it?

Having good eyesight is one of the most basic requirements for safe driving. It is widely recognised that 90% of sensory information when driving comes from vision, which underlines the importance of always driving with good eyesight. Being an experienced and skilled driver who is aware of the dangers of the roads is simply meaningless if one is unable to spot hazards in time. Research shows that one in six drivers cannot see well enough to pass a very basic eyesight test. People who are reluctant to give up their driving licence cannot be relied on to inform the authorities if they have eyesight problems.

Making the changes that I suggest would have public support. In vox pop interviews this morning, my local radio station, Radio Sheffield, spoke to five people—only a few, but four of the five thought that those changes were sensible and saw no problem with them. BRAKE, the road safety charity, released a survey, which no doubt involved a few more people than the five in Sheffield, showing that 75% of drivers support compulsory eyesight testing for drivers every five years.

Continuing with a system of drivers self-reporting any problems that they may have is not the answer. Poor driver eyesight kills, and every death is devastating to the people involved. The Government should act on the professional advice, which commands support among drivers, and change the driving test to ensure that all drivers can see what lies ahead of them while on the road.

16:23

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

It is a pleasure to serve under your chairmanship, Mr Streeter. I congratulate the hon. Member for Sheffield, Heeley (Meg Munn) on securing this debate, on her speech today, and on her long-standing work on this important issue. It is a welcome opportunity to highlight the crucial point that those with defective eyesight that does not meet the required standards should not drive on our roads.

I want to put on record my sincere condolences for the hon. Lady’s constituent, Joy Barnes, on the tragic death of her niece, Fiona Buckley, in the incident that the hon. Lady described. The case was tragic, and I offer my sympathies to Fiona’s family and friends for their loss.

In responding to the issues raised by the hon. Lady, it may help if I reiterate and clarify the current arrangements for renewing the entitlement to drive. Most drivers do not need to renew that entitlement until the age of 70. They must then renew every three years for as long as they remain fit to drive. Someone at the age of 70 could be fitter, more alert and more active than some individuals who are younger, which is why licensing decisions are based on health rather than age. Although age is not always a reliable indicator of an individual’s physical and mental health, it is widely accepted that health can deteriorate in old age in ways that may affect the ability to drive safely.

When renewing their entitlement to drive, drivers must, as the hon. Lady said, complete a self-declaration affirming their ability to read a number plate from 20 metres away. They must also confirm that they do not have any medical condition that affects their ability to drive safely. That allows attention to be focused on those individuals who declare that they have a medical condition, those who have been found to have one, and those who need some sort of investigation to determine whether they can retain their licence to drive. Those detailed investigations into medical fitness to drive may include the collection of information from the driver and their doctor, a physical examination or a driving assessment.

The hon. Lady expressed concern about drivers who do not tell DVLA that they can no longer meet the level of fitness, including eyesight, needed for driving. One may speculate that that is because they worry about the impact of losing their licence, or because a medical condition makes them unaware of the implications of their failing health. That is why DVLA accepts notifications from third parties, and that is an important element of the enforcement process. Around 8,000 notifications of concern received from doctors, police and family members are investigated each year. Guidelines produced by the General Medical Council for doctors confirm that they are justified in telling DVLA about a patient who fails to stop driving following medical advice to do so. Similar guidelines have been produced by the College of Optometrists for its members.

DVLA forms and literature remind drivers of the ongoing requirement to meet the eyesight standard, and specifies that failure to meet the standard is an offence. Whenever DVLA contacts drivers, consideration is given to whether it is possible to highlight the continuing obligation to notify the DVLA of defective eyesight and appropriate medical conditions. We also seek to give information to drivers about the conditions that they must tell DVLA about relating to field of vision. That is an important part of the enforcement process. Directgov has an A-Z of medical conditions to help drivers to decide whether they need to tell DVLA of any aspect of their health. Detailed guidelines for doctors are also available to help them to advise their patients on medical notification requirements.

The Government’s view is that the current arrangements strike the right balance between road safety and personal mobility. There is not sufficient evidence to suggest that a more burdensome and costly regime would have a significantly positive effect on road safety. The majority of older people continue to drive safely, and to retain insight into their ability to do so.

[Meg Munn]

I understand what the Minister is saying about conditions, and being able to look things up, which is fine if someone knows that they have a problem, or someone has suggested that their sight is deteriorating, for example, but much of the evidence is that people simply do not know. Providing information does not help them, and unless they have a test they may not know that they are suffering a problem.

[Mrs Villiers]

As I said, whenever possible, the communications that DVLA sends to drivers refer to those conditions to alert them to the continuing need to ensure that they can pass the 20 metres test. One of the benefits of that test is that it is simple, and people can do it if they walk outside this building. We seek in those ways to alert people to the importance of doing that test regularly. On the whole, older people make sensible decisions about when and how they drive, and some older drivers voluntarily engage with local services to improve their driving skills and get independent advice.

The hon. Lady made a number of points about the effectiveness of the number plate test as a way of testing vision. As she said, the standard of vision required for safe driving requires someone to read a number plate at a distance of 20 metres. For people with visual field problems, other specific standards have to be met. All drivers are required by law to meet the appropriate eyesight standard at all times while driving. If they are unable to read a number plate, even if that is only because they failed to wear the appropriate prescribed glasses or lenses, they are committing an offence. Driving licence applicants must declare that they are able to read a number plate to obtain a licence. They will be asked to prove their ability to do that to their driving instructor during the practical driving test.

I assure the hon. Lady that we comply with EU directives on the visual field. The number plate test is not expected to test the visual field. A visual field problem is caused by an underlying medical condition, and those with such conditions are required by law to notify the DVLA, which has long-standing procedures in place to assess whether the minimum visual field requirements are met. Those requirements include referral to an optometrist for a specialist examination and report. The Government believe that the number plate test is an effective screening tool. Its use as a means of assessing whether a driver meets the required eyesight standard has been subject to departmental and Scientific Advisory Committee scrutiny, and it has stood the test of time.

The hon. Lady referred to a consultation document that was issued in relation to a possible revision of health standards for driving. That consultation looked at whether, instead of maintaining our current higher standard, the UK standard should be brought into line with the minimum required by the European Union. No decision has yet been made, but if it were proposed to align our standard with the minimum standard required by the EU, the distance over which someone is required to read a number plate would be reduced. Responses to the consultation are being analysed; some issues need further consideration and that is under way at the moment. It is important that any proposed changes are evaluated fully and that appropriate consideration is given to their potential impact. The points raised by the hon. Lady this afternoon will no doubt feed into the process of reaching an ultimate decision. Once an evaluation of the consultation responses is complete, the Government will take an informed decision on how to proceed and issue a formal response to the consultation.

In the meantime, there is much to be said in support of the current system. The number plate test is a simple and functional assessment of vision that can be easily carried out in the driving environment and reproduced regularly by an individual, as opposed to a periodic appointment with an optician. Although it is largely a test of visual acuity, to some extent it can test glare and contrast sensitivity. It provides a good indication that the licence holder meets—and continues to meet—the required visual acuity standards for driving. The test is easily reproduced at Driving Standards Agency test centres by examiners, and at the roadside by the police.

At a modest estimate of £20 per test, it would cost more than £20 million each year if an optician’s certificate or eyesight test were required by the 1 million motorists who apply for their first driving licence. If such a test were compulsory for each of the 2.5 million motorists who renew their driving licence each year because their photograph is 10 years old, it would cost more than £50 million a year.

[Meg Munn]

The Minister is generous in giving way again. Given the cost of motoring, the figures she mentions are tiny amounts of money compared with what people spend on learning to drive. Does she understand how complacent she sounds, and how angry my constituent will be at her response? Given her inability to offer any comfort to my constituent, will the Minister take on board the need to do a great deal more to raise awareness of this issue?

[Mrs Villiers]

I completely refute the allegation of complacency. The Government are very focused and place high priority on road safety. We are determined to continue the UK’s good record on road safety, but we believe that the current arrangements are an effective means of maintaining safety on our roads. We must take into account the costs of what the hon. Lady proposes. Household budgets are stretched at the moment and it is tough for people to add to those budgets commitments of this kind. If each of the 1.5 million motorists who renew their driving licence at the age of 70 were required to undergo such a test, that would cost a further £30 million each year—a significant sum of money. As all drivers over 70 are entitled to a free eyesight test, that additional burden and cost would fall on the Department of Health and the devolved Administrations. Added to that is the caution that, while an optician’s certificate, or equivalent, might provide assurance that someone has had their eyes tested, it would not guarantee that they could meet the current eyesight standard while driving, or that they used their prescribed glasses or corrective lenses. The optician’s test does not provide all the answers.

In conclusion, the Government are confident that current arrangements are effective and working well. The UK has one of the safest road networks in the world and I am afraid that we simply cannot justify the cost that indiscriminate, mandatory eyesight screening would impose on individuals, the Government and the devolved Administrations. Furthermore, there is little evidence to suggest that compulsory formal eyesight tests would have any marked positive effect on road safety.

The coalition Government take road safety seriously and are determined to maintain and improve the country’s long-standing and strong record. Any road death caused by defective vision is an avoidable and unnecessary tragedy, and all of us who use UK highways must take personal responsibility for ensuring that we have an appropriate level of vision for driving. I take the opportunity to place on the record how important it is that all drivers, regardless of age, do not simply wait for their next eye appointment, but check regularly that they can read a number plate from a distance of 20 metres. That simple test can alert individuals to a deterioration in their vision that they may not have noticed, and to the need to make an appointment to see their optician. The number plate test is saving lives on our roads. It is an effective test in which the Government continue to have confidence.

Housing (Bradford)

Wednesday 15th June 2011 Westminster Hall

11:00

[Mr David Ward (Bradford East) (LD)]

I do not think that our paths have crossed, Mr Streeter, but I am pleased to serve under your chairmanship and to face my colleague the Minister. This is a wonderful opportunity to highlight an important issue, and I hope that I do it justice.

A famous statistic alleges that Bradford once had more Rolls-Royces per head of population than anywhere else in the world. If that were ever true, I am sad to say that it must have been a long time ago. I remember being a young councillor during the recession of the 1980s—that really was a recession—and one council estate I represented had 70% male unemployment. Most of the unemployed men on that estate walked out of school in the ‘50s, ‘60s or even the ‘70s, and went straight into jobs. Sadly, when made redundant, many never worked again. Sadder still, their children went on to have children who have never worked.

Believe it or not, two thirds of the entire Bradford district is rural, and it is one of the most diverse areas in the country. It ranges from the prosperous Ilkley, where house prices are, surprisingly, at their highest ever level at present, to areas such as two wards in my constituency where, in some parts, 68% of children are categorised as living in poverty.

Bradford has gone from being one of the wealthiest cities in the world to being a city with deep economic and social problems. Over 30 years, Bradford has had millions of pounds of regeneration funding from every scheme that was on offer. The schemes were not without success, but the fundamental weakness of the economy has led to deep-rooted problems of poverty, high unemployment, low educational attainment, dire health outcomes in many areas, a decaying housing stock and, at times, as we know, frightening social tensions.

The housing problem stands out as one of the many consequences of economic failure in Bradford. I started this speech on housing by referring to the declining economic history of Bradford because, in addition to the contribution that housing policy can obviously make to meeting housing needs, it can make a contribution as a fundamental element of the regeneration of the community’s economy.

I must admit that there are many concerns about some of the proposals that the Government are considering. Those include changes to the shared room rate and paying the rent element of universal credit directly to tenants. That may have severe consequences: 80% of the tenants of the largest social landlord are on benefits. The changes include flexible tenancies, restricting housing benefit for tenants who are under-occupying and capping local housing allowance at the four-room rate. Many of those changes will potentially have adverse effects on people in Bradford. I will continue to campaign on those issues on other occasions. Today, in the limited time available, I want to focus on the most crucial aspect of housing policy—its contribution to economic regeneration.

The Government’s housing policy as it affects Bradford can at worst impair economic regeneration, or, if delivered with consideration of and adaptation to local circumstances, play an integral part in fulfilling the deep need for economic regeneration. I am sure that the Minister is well briefed and is well aware of the scale of the difficulties that we face. On current projections, Bradford’s population will increase by 150,000 in the next 20 years. To meet the projected growth, we need at least 2,700 homes each year. Currently, we are missing that target by a long way.

[Philip Davies (Shipley) (Con)]

I commend the hon. Gentleman for bringing this debate to the House. As he knows, there are two proposals for big building developments in Micklethwaite and Menston, in my constituency, on beautiful, picturesque green fields. Does he agree that building houses on the outskirts of the district does nothing to alleviate the housing need in the centre of Bradford and that at a time when the council and all of us are trying to regenerate the centre of Bradford, it is rather counter-productive to build houses in that part of the district, the residents of which will shop in Leeds, regenerating Leeds even more, rather than Bradford?

[Mr Ward]

That is a massive issue. I am sure that the hon. Gentleman is well aware of the fact that, as people progress up the housing chain, they move out of the inner-city areas. There is a long history of that happening in Bradford. The simple answer is that the housing must come from somewhere. We are missing the targets on new houses: at the peak of the housing boom in 2008, just over 2,000 houses were completed, but by last year the number had fallen to just 700.

Bradford’s low-wage economy and high unemployment in the areas where housing demand is strongest mean that about half the homes required will have to be in the social rented sector. There, the gap in delivery is even greater. Currently, fewer than 300 affordable homes are built each year—it is little wonder that there are 20,000 people on the social housing waiting list.

Added to the high demand for new homes is the fact that much of Bradford’s private sector accommodation is not fit for people to live in: 40% of Bradford’s private sector accommodation currently fails the Decent Homes standards; 10% is overcrowded; and across the district more than 7,000 properties stand empty and, often, derelict.

How could a national housing policy contribute to the economic regeneration of the Bradford district? Bradford has the youngest, fastest growing population outside London. That could be a great opportunity for Bradford’s economy, but only if there is somewhere for those people to live. Meeting the demand for new housing and stock improvement would provide much needed jobs in the construction industry. The Home Builders Federation has calculated that, for every £1 of public money spent on social housing, a further £3 of private sector investment is generated. Tackling poor-quality housing could change the image of Bradford. Our housing is critical to the way in which we are perceived as a district and to the confidence that investors require to put money into the district. In addition, improving basic housing conditions would remove many of the factors that contribute to the poor health and low educational attainment that perpetuate cycles of deprivation.

My concern is that the array of housing measures proposed by the Government will fail the test of delivering the quantity and quality of housing that we need to underpin the economic revival. Bradford’s ability to meet its targets for affordable housing will inevitably be hit by the halving of national capital funding. The Government’s much lauded affordable rent model is seen as a way forward in terms of replacing direct Government funding. We are told that it will generate 150,000 new affordable homes. It may well offer a viable replacement for lost grant funding in many parts of the country where market rents are high, but it is unlikely to be the answer in Bradford.

There is very little difference in Bradford between target rents and 80% of the market rent. I know that the Minister is aware of that. Taking into account the fact that the areas with the highest turnovers also have the lowest rents—of course, this measure will apply only to re-lets—Incommunities, the largest social housing provider in the district, which manages two thirds of the social housing, has projected that using affordable rents alone would generate for the whole of the Bradford district only an additional £120,000 a year. That would be almost but not quite enough to build two or three houses.

I am sure that the Minister will be keen to mention the new homes bonus—a key plank in the Government’s housing policy and one that in principle we have to support. The danger is that the policy simply gives more to those who already have, where land values are higher. Because of the distribution of funding being based on council tax bands rather than the grant formula of the Department for Communities and Local Government, which is based on levels of deprivation, Bradford will again lose out.

My fear is that funding will be skewed to areas with healthy housing markets at the expense of more deprived grant-dependent local authorities such as Bradford. Certain areas will gain additional homes because the affordable rents model will work, but on top of that, they will get the new homes bonus. I stress that the new homes bonus and the affordable rent model, as the two key policy levers for increasing housing supply, will not work sufficiently in areas such as Bradford and that broader consideration of other policy mechanisms is needed. It is not enough to say, “It cannot be expected to work everywhere.” We need measures that will work in a place such as Bradford.

It is not as if we are not trying as best we can with the limited resources available. The council has been attempting to tackle poor-quality housing through equity share and home appreciation loans, which in the long term would provide a small but self-sustaining pot of funding. However, the loss of the private sector renewal grant means that when the scheme comes to an end, there will be no provision to help vulnerable people to fund improvements to their properties.

The role of the private sector in realising economic benefits is crucial, and I am sure that the Minister welcomes the good cross-sector work that is going on through initiatives such as the Bradford Together procurement partnership, a public-private sector partnership that links construction contracts with the development of skills and jobs, which will benefit local communities. Over the last five years, Incommunities, the largest registered social landlord in the district, has built 400 homes, which has created jobs and provided 30 apprenticeship places. There are successes—they do exist—but they have to be set against the context of complex and large-scale housing needs.

What am I asking for? I seek a commitment from the Minister that he will speak in Bradford to those engaged in the challenge of increasing the quantity and improving the quality of housing in the district; they know far more about the subject than I ever will. I would welcome a response from the Minister about the possibility of the large surpluses generated in some parts of the country through the affordable rents model being redistributed to areas such as Bradford, that gain so little from the scheme. In a recent case, a registered provider, Affinity Sutton, considered investing in affordable housing in Bradford, using a surplus generated in the south, but it was unable to take that forward because the Homes and Communities Agency was unwilling to allow it to reallocate surpluses between regions.

The Minister may also like to say whether he believes that it would be sensible to take account of the difference in additional revenues generated through the affordable rents model, and to see whether they can be taken into account when calculating the allocation of grants through the HCA. Should not the remaining grants be targeted at those areas that have an acute need for affordable housing but are without the conditions required to benefit from the affordable rents premium?

I welcome the £100 million of additional funding to bring empty homes back into use—I have already mentioned the 7,000 empty properties in our district—but that amounts to only £338 per empty private home in the country. When considering the scale of the problem in places such as Bradford, I question the adequacy of the amount being made available. I ask that it be reconsidered. My plea is that the Government should resist the temptation to micro-manage and centrally control how the money is used—avoiding that is localism at its best. We have creative and innovative people working in the housing sector in Bradford, and I would welcome the Minister’s assurance that the Government will trust them to do what works best in our area.

The challenges that Bradford faces can at times appear daunting, but they are not insurmountable. Housing can be part of the solution to unlocking Bradford’s economic potential, but only if we get the policy levers right. Conversely, if we are not able to tackle housing effectively, Bradford’s problems will be compounded by the growing cost of homelessness, overcrowding and squalid conditions. As these problems escalate, households’ basic needs will not be met, and the search for a job will take a back seat for those affected as they try to deal with their living conditions.

If the Government are to be judged a success, they need to understand places such as Bradford when considering legislation. To take the time to understand places such as Bradford and to respond accordingly would be a much more critical test of the Government, and would be evidence of the extent to which they actually care about them. We await the outcome of that test with desperately keen interest.

16:54

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

It is a pleasure, Mr Streeter, to serve under your chairmanship. I am pleased to have the opportunity to have the opportunity to respond to my hon. Friend the Member for Bradford East (Mr Ward).

My hon. Friend said that he was a councillor as a young man; those in the Chamber can see that it can only have been a year or two ago. He has a long history of serving his constituents with great diligence as a member of the council and, since last year, as a Member of Parliament. He painted a clear if at times rather bleak picture of Bradford, and of the extremes of poverty and riches there and the problems for his constituents in respect of education, health and, as he rightly said, housing.

The Government certainly share my hon. Friend’s view that housing is an important component of building a growing economy. That is why we are continuing to invest in housing, through the Decent Homes programme, to bring social housing up to an acceptable standard, and through a new-build programme. We are not simply rolling forward the programmes that we inherited, although we are continuing with them, but developing a new programme using the affordable rent model. I hope that I can give my hon. Friend some comfort that the Government appreciate the problems that Bradford faces—and other places, too, but my hon. Friend highlights Bradford—at a time when, of necessity, the UK economy is in a period of stress.

My hon. Friend asked a number of specific questions. One is easier to answer than most. I think that he has invited me to speak in Bradford. I am happy to speak in Bradford—and, indeed, more or less wherever I am invited—and to say something about the Government’s policies.

[Mr Ward]

I invited the Minister to come to Bradford to listen.

[Andrew Stunell]

That was a very proper correction, from a most diligent constituency MP. I would be even happier to go to Bradford to listen than to have to give any kind of response or speech. I am sure that we can come to a way of operating that provides both of us with what we need.

My hon. Friend asked whether the affordable rent model might work to Bradford’s benefit. I shall say something about that in a moment or two. He also put in a plea that the Government should not try to micro-manage how Bradford chooses to operate. I hope that he will take some comfort from the actions of the Government so far; in particular, I draw his attention to the fact that we have de-ring-fenced—a new phrase—many of the specific grants that were the bane of local government when budgeting and making policy. That gives Bradford far more flexibility to decide its priorities and how it should spend its money for the benefit of its citizens. Further measures will assist, under the local government resource review, details of which are likely to be published next month. I can promise to visit Bradford, and I can promise that there will be ever less micro-management, although we doubtless need to keep prudence thoroughly in mind.

The Government are committed to increasing housing supply across the country. We have an investment programme designed to achieve that—in fact, we will add 150,000 affordable and social homes during the life of this Parliament. Included in that is bringing back into use 5,000 extra empty homes, which I hope will be some consolation to my hon. Friend. However, I cannot guarantee that they will all be in Bradford. Clearly, we are also looking at ways in which we can bring empty homes back into use, stimulate action and promote good practice without necessarily requiring money to be spent either by us or by Bradford. We are investing in new homes and in getting empty homes back into action.

My hon. Friend mentioned the new homes bonus. Let me remind him that Bradford has benefited from the new homes bonus to the tune of £2.8 million this year, and that was without Bradford even trying. The figures that were used in allocating that money were simply based on the number of additional homes that became available in Bradford during last year, before the council or anybody else knew that that was how we were measuring things. In future years, there is the opportunity for Bradford and its partners to work harder and more diligently to bring empty homes into use, for which the new homes bonus is payable, and also to bring new homes into use.

The growth that my hon. Friend has reported for Bradford is part of a general growth across the whole country. More households are being formed each year. They are being formed at their highest level since the 1940s, and yet the number of homes being built is at its lowest level since the 1920s. The previous Government left the country in a position in which house building was at its lowest peacetime level since 1924. We inherited social housing waiting lists at record levels. There are currently 250,000 families living in overcrowded conditions. The reality is that the number of social homes in the country has gone down by a significant number. We have seen a reduction of more than 400,000 social homes available for rent since 1997. Of course that frustrates people. It frustrates my hon. Friend, and it certainly frustrates his constituents who are left on the waiting list. We have a clear intention to address that situation.

Let me pick up on my hon. Friend’s point about how our new policy of affordable rents might benefit Bradford. I want to make it clear to him and to the partners who deliver housing in Bradford that there is no ring-fence on funding from the conversion of re-lets to prevent money being generated in Sutton by Affinity Sutton and used to fund development and build in Bradford. It is true that the affordable homes framework document encourages partners to reinvest the capacity generated from affordable rent in the area from which it was generated, but that is all that it does. It encourages such practice; it does not place a ban on doing something else. My hon. Friend has it in mind that there was a scheme for Affinity Sutton to build 200 homes in Bradford, but because it offered us a reason for not going ahead with it, a rule was passed that prevented it transferring the benefits of affordable rent elsewhere to use the money to invest in Bradford. That is not the case. Perhaps we can discuss that separately. If he needs me to reinforce that point, I would be happy to join him in meeting the Homes and Communities Agency .

The affordable rent model allows the Government to build more social and affordable homes than they would have been able to do if they had kept in place the model that they inherited. That model required more than £80,000 of subsidy per home in order to produce a home for someone to occupy. The model that we have will require less than half that money per home. We are stretching the resources so that we can build the largest number of affordable homes possible. There is nothing in that model that prevents money being spent in Bradford to deliver the homes that my hon. Friend wants.

I have spent a long time dealing with some of those points, but I hope that my hon. Friend gets some sense that the Government take seriously the kind of situation that he has so eloquently outlined.

I also want to make it clear that among the other things that are available is the green deal, which will allow many homes, especially in the private sector but not exclusively so, to have investment to bring them up to a more acceptable standard and to make real inroads into fuel poverty for my hon. Friend’s poorest constituents. That plus the energy company obligation, the money that we are investing in empty homes and the other work that we are doing to make more efficient use of the social housing stock will, I hope, give my hon. Friend some comfort that we are making a good attempt to deal with the problems that he has identified.

My hon. Friend said that the test for this Government would be whether we took seriously the towns, the cities and the communities, such as his constituency in Bradford. I say to him that we are taking all parts of the country extremely seriously. That is reflected in the way in which we amended our grant-making formula at the start of this year to increase the amount of stress that we place on poverty and the way in which money should be distributed. It is why we introduced the transitional payments and why we have the regional growth fund. Areas such as Bradford could bid for RGF funds which could then be matched by European regional development funding.

My understanding is that Bradford did not submit a bid to the first round of regional growth fund applications. I do not know whether it has bid for the second round, but a route exists for investment to be made in Bradford, using the Government’s regional growth fund.

I look forward to my visit to Bradford and to listening to my hon. Friend’s constituents very carefully. I hope that I can reassure him that Bradford will be free to deliver as it sees fit with the money that it has available. I look forward to working with him over the next few years to make absolutely sure that at the end of this Parliament he has the satisfaction of knowing that he has improved Bradford with the help of the Government.

17:08

Sitting adjourned without Question put (Standing Order No. 10(11)).

Written Ministerial Statements

Wednesday 15th June 2011 Written Statements

Wednesday 15 June 2011

Abolition of Regional Development Agencies (Public Bodies Bill)

Wednesday 15th June 2011 Written Statements

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

The reform of the delivery of economic development in England was one of the key commitments in the coalition agreement, and the Government have given a public commitment that the eight regional development agencies (excluding London which is being dealt with separately) will cease activities by March 2012, pending final abolition, which is subject to the passage of the Public Bodies Bill.

The closure programme is now well advanced, including substantial work to scale back the expenditure of the RDAs, in line with the spending review settlement which provided funds for legal commitments and closure costs only, representing about 18% of the amounts spent in the four years to March 2011. On the current timetable, by autumn 2011 there will be a skeleton level of staff left in each RDA and RDA activity will reduce significantly, well before March 2012.

While a number of RDA activities will cease completely, certain functions undertaken by RDAs will transfer elsewhere. Transfer of staff delivering the UK Trade & Investment foreign direct investment service to a new national contractor, PA Consulting, was completed at the beginning of May, and the transfer of about 300 staff delivering European regional development fund projects, and the rural development programme for England to the Department for Communities and Local Government and the Department for Environment, Food and Rural Affairs respectively scheduled for 1 July. The plans for the transfer of certain RDA functions were set out in the White Paper “Local growth: realising every place’s potential” (Cm 7961), published on 28 October 2010. There has been significant engagement with stakeholders about the plans to cease RDA activities.

As drafted, the Public Bodies Bill provides powers for Ministers to make changes to public bodies via secondary legislation, following a consultation process and appropriate parliamentary procedure. As the closure (and transfer) programme for RDAs is now well advanced, the Government have concluded that it would not be appropriate for the RDAs to be subject to this process. Delaying this programme would not be beneficial for the economy or the future of economic development and would risk jeopardising the more cost-effective delivery of economic development provision we are putting in place.

The Government have therefore decided to bring forward an amendment to the Bill, which will provide for the abolition of the RDAs on the face of the Bill and will therefore exempt RDA abolition from the order-making process in the Bill. The necessary amendments are expected to be tabled before Committee stage in the House of Commons.

Sudan

Wednesday 15th June 2011 Written Statements

[The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague)]

In January this year, the people of south Sudan voted in a referendum in favour of secession from the Republic of Sudan, as was their right under the terms of the comprehensive peace agreement (CPA) signed between the Government of the Republic of Sudan (GoS) and the Sudanese People’s Liberation Movement (SPLM) in 2005. The south plans to secede on 9 July. Since the referendum, progress against the remaining areas of the comprehensive peace agreement, which will expire on 9 July, has been insufficient. There are also a number of “post CPA issues” on which agreement needs to be reached urgently. The violence witnessed in recent weeks in Abyei and southern Kordofan regions is cause for great concern and risks prejudicing all that has been achieved since the CPA was signed in 2005.

On 19 May, Sudan People’s Liberation Army (SPLA) forces attacked an UNMIS convoy escorting Sudanese armed forces (SAF) elements of a joint integrated unit. In a disproportionate response, Sudanese armed forces took control of the area in and around Abyei town on 21 May. I immediately condemned this action. Since then, the lawlessness and violence has continued, with approximately 100,000 civilians displaced internally. When I met Foreign Minister Karti in London on 6 June, I made clear that there must be a durable and peaceful resolution to the status of Abyei and that Sudanese armed forces must withdraw from the region. I encouraged the Foreign Minister to accept offers of a UN-mandated third-party peacekeeping force in Abyei so that Sudanese forces can withdraw quickly and those who have been displaced can return to their homes. I received assurances that the Government of Sudan intended to withdraw their forces.

On 6 June, fighting broke out between SPLA and SAF in Kadugli, the state capital of south Kordofan. Since then we have seen a worrying escalation of violence, including aerial bombardments and reports of ethnically motivated assassinations and attacks on individuals. Such actions are wholly unacceptable and I condemn them. The violence has already displaced some 60,000 civilians. I am greatly concerned by the lack of access being granted to humanitarian agencies and I call on all forces in the state immediately to grant access for humanitarian agencies to help the people most affected by this violence. I remind the Government of Sudan of their responsibility to protect civilians. Reports of human rights violations should also be fully investigated.

These conflicts endanger the hard-won progress that has been achieved through the comprehensive peace agreement. This week the AU high-level implementation panel, chaired by former President Mbeki, is facilitating talks in Addis Ababa between the Governments of Sudan and south Sudan, aimed at urgently finding a peaceful solution to the situations in Abyei and south Kordofan. I discussed the prospects for these talks with President Mbeki on 9 June and assured him of our support for his and his team’s efforts. Today, I again urge all parties involved in those talks quickly to agree a solution to the current crisis and to bring to an end the violence that has already affected so many lives.

The UK special envoy for Sudan, Michael Ryder, travelled to Addis Ababa to support the AU talks, working closely with his US counterpart. The UK ambassador in Khartoum and consul-general in Juba are speaking regularly to representatives of the Government of Sudan and south Sudan to seek a way out of this crisis, as well as leading the co-ordination between our international partners locally to press both parties to reach a solution. We have been public and loud in our condemnations. The British defence attaché based in Khartoum has been supporting the military talks on this issue and representatives from the Department for International Development are working closely with their UN colleagues on the humanitarian response. The UK funded the pre-positioning of supplies which allowed the UN promptly to start the humanitarian response in southern Kordofan. We are working hard with Security Council partners to ensure the UN remains able to protect civilians and provide humanitarian support.

The UK has pledged £560 million over the next four years to support humanitarian and development projects in Sudan. My right hon. Friend the Secretary of State for International Development visited Sudan last month, along with his counterparts from the US and Norway, to meet with key partners in both north and south Sudan and reiterate UK support. The UK remains committed to seeing two peaceful, stable and economically viable states after 9 July and we will remain engaged until a lasting and sustainable peace is achieved.

House of Lords

Wednesday 15th June 2011 Lords Chamber

Wednesday, 15 June 2011.

15:00

Prayers—read by the Lord Bishop of Chichester.

International Widows Day

Wednesday 15th June 2011 Lords Chamber

Question

15:06

Asked by

[Lord Loomba]

To ask Her Majesty’s Government what plans they have to mark the first United Nations International Widows Day on 23 June.

[Baroness Verma]

My Lords, while the Government are not planning a specific event on International Widows Day, we continue to work with our UN partners to raise awareness of the issues facing widows. We take a proactive role in promoting gender equality through engaging in International Women’s Day. The Government of course recognise that widows of all ages are among the poorest and most vulnerable in societies across the world. That is why, in our country programmes, we continue to provide support to widows.

[Lord Loomba]

My Lords, I am disappointed with the reply. My foundation—I declare an interest as the founder member of the Loomba Foundation—commissioned international research that concluded that there are more than 245 million widows supporting nearly 500 million children who are disadvantaged and living in poverty. The issue has been identified by the United Nations, which has designated 23 June as International Widows Day. It surely should have been possible to ring-fence funds. The issue should at least have been included in the millennium development goals. Why has this not happened?

[Baroness Verma]

My Lords, I start by congratulating my noble friend on the vital work of the Loomba Foundation in supporting widows. I declare an interest as a trustee of one of my noble friend’s charitable organisations. The UK takes a leadership role through our diplomatic and development work in supporting poor and vulnerable women and promoting their economic, social and political empowerment. We support widows through broader programmes working on women’s empowerment, asset ownership and inheritance rights, and, through this, the targeting of cash-transfer programmes. The Government are targeting all women, including widows.

[Baroness Greengross]

Widows in post-conflict situations, particularly in many countries in Africa and the Middle East, are in a particularly vulnerable position. Some of the widows are extremely young, many are in reality punished for the death of their husbands, and their future is very bleak. Will the Minister assure us that their needs will be taken fully into consideration?

[Baroness Verma]

The noble Baroness of course raises a number of very important issues. Through DfID, as she is aware, we are making sure that our work in each country programme has a focus on trying to ensure that women and girls get the right directions, and the means and support, to be able to engage in both civic and political involvement. For example, we are working to increase the number, influence and capacity of women in Afghan public life, through the Afghanistan Sub-national Governance Programme. In this way, we feel that they will be in charge of their own destinies while receiving support from us.

[Baroness Goudie]

The Minister is well aware that if we had more women at the peace table in post-conflict times, we know that widows would be taken care of much better. At present, it is men on both sides who say that they do not want women at the peace table. If there were women at the peace table, we would be able to ensure that women and widows in post-conflict areas would have schools for their children, proper medical aid for them and the chance of getting work through investment into those countries. At present, none of that is happening, except in a very few areas. It is very important that our representatives at the UN and in post-conflict areas do that.

[Baroness Verma]

The noble Baroness has made some absolutely valid points; in fact, she has answered her own question for me. The noble Baroness is absolutely right. That is why, through DfID, the FCO and the MoD, we try to work to ensure that there is full representation through all our programmes and that in all we are doing the presence of women is visible. We are of course aware that there are places where that is much more difficult, but we will continue to work with Governments to ensure that, through our support, they are able to do that.

[Baroness Jenkin of Kennington]

My Lords, what steps are the Government taking to encourage, support and increase the political participation of women in the Arab spring?

[Baroness Verma]

My Lords, that follows on very neatly from the question from the Benches opposite. We remain concerned that women seem not to be present in the negotiations and at the forefront of political life, whereas they were very present during the revolution and demonstrations. DfID and FCO have committed to more than £110 million over four years to support political and economic reform across the region. Our department will be looking at how gender will be represented there.

[Baroness Royall of Blaisdon]

My Lords, our widows are also international widows. This year, the War Widows’ Association of Great Britain celebrates its 40th anniversary. I suggest to the Minister that those extraordinary women, to whom we owe so much because their partners have paid the ultimate sacrifice, might wish to mark the first United Nations International Widows Day with a clear statement from the Government that they will not seek to overturn the amendment passed in this House on the Office of the Chief Coroner, a role of great importance to war widows and their bereaved families.

[Baroness Verma]

My Lords, I accept that the question is very important; I need to take it away and write to the noble Baroness in response.

[The Earl of Listowel]

My Lords, does the Minister recognise that in bringing up children an important problem for many mothers, including widows, is finding good male role models, perhaps particularly for their sons? Will she take this opportunity to pay tribute to the men who step into those roles, particularly male school teachers and perhaps male physical education teachers?

[Baroness Verma]

My Lords, the noble Earl is absolutely right. Issues regarding gender will never be resolved unless we take on board the important work and commitment undertaken by both men and women. I completely accept what the noble Earl says. By and large, we are trying to work closely to ensure that the engagement is not just with women and girls but with boys and men too.

[Lord Chidgey]

My Lords, I emphasise the point made by several other noble Lords, the importance of dealing with the needs of tens of thousands of widowed women as a result of decades of conflict in central Africa, in the Congo and elsewhere. What specifically are the Government doing in relation to the educational needs in the civic development of those women so that they can participate in the full life of their communities and protect the future of their children?

[Baroness Verma]

As my noble friend knows through our meetings with DfID, every programme we have in every country that we are supporting has mainstreaming of gender. I think he agrees that it will take time to see the results. We are very aware that we have an uphill struggle and that it will be hard, but we will persevere.

Northern Ireland: Bill of Rights

Wednesday 15th June 2011 Lords Chamber

Question

15:14

Asked by

[Lord Smith of Clifton]

To ask Her Majesty’s Government, following the recent elections to the Northern Ireland Assembly, what discussions they will hold with the political parties regarding the promotion of a Northern Ireland Bill of Rights in accordance with the 1998 Belfast agreement.

[Lord Shutt of Greetland]

My Lords, as my right honourable friend the Minister of State for Northern Ireland recently made clear in the other place, we want to see this issue resolved and will be taking the views of the new Executive, political parties and others in Northern Ireland on how best to move matters forward.

[Lord Smith of Clifton]

My Lords, that is a smidgen of an improvement on the Answer given the last time I raised this question, and I suppose that that is progress. Can my noble friend tell me frankly whether the Government are going to continue the previous Government’s policy of kicking this issue into touch, or when we might have some positive progress on implementing this last aspect of the Belfast agreement?

[Lord Shutt of Greetland]

My Lords, I cannot give any specific dates or times. Civil servants have already talked to people in the human rights fraternity in Northern Ireland, and the next job is to get involved with the Assembly and to get things moving. I said on the previous occasion, and I repeat now, that with the new Assembly there is an opportunity to break into this issue, which I understand is of long standing. It is important that we move forward.

[Lord Kilclooney]

My Lords, does the Minister recall that, when we negotiated the Belfast agreement, we had it specifically written into the agreement that there would be progress on human rights not only in Northern Ireland but in the Republic of Ireland? When will the Government make representations to Dublin to have the obligations under the Belfast agreement honoured after 13 years?

[Lord Shutt of Greetland]

My Lords, I cannot answer for the Government of Ireland. However, as I indicated on the previous occasion that the noble Lord, Lord Smith, raised this question, I wrote to the Government of Ireland to let them know of the concerns of the noble Lord, Lord Kilclooney. Your Lordships will note that, regardless of there being, in the noble Lord’s words, no progress, an Irish Human Rights Commission has been set up and is very busy in its work.

[Lord Dubs]

My Lords, does the Minister agree that this issue of a Bill of Rights for Northern Ireland has been going on for many, many years? Can he confirm that the Government will not allow any one political party in the Assembly to veto progress towards the commitment that we entered into?

[Lord Shutt of Greetland]

My Lords, I cannot give guarantees but I do not believe that there ought to be vetoes. The Belfast agreement is clear. Of course, one highly significant party in Northern Ireland was not party to the Belfast agreement. Nevertheless, it is important that this matter, which is almost the final piece of the agreement, has not really been tackled. It is a tricky issue. The noble Lord will recall that his own Government had a bit of bother with it; 12 years on, we have not got too far with it. However, because we have now had another election in Northern Ireland, there is an opportunity to make a fresh start, which the Government are very hopeful of doing.

[Lord Trimble]

My Lords, perhaps I may suggest to my noble friend that we would all benefit from a close reading of the terms of the Belfast agreement on this point? Those terms make it clear that the core of any possible Bill of Rights for Northern Ireland is to be the European Convention on Human Rights, possibly together with some supplemental matters to reflect the special circumstances in Northern Ireland. That is open to a lot of interpretation, and is there not a very clear and quite principled disagreement between the major parties in Northern Ireland on its interpretation?

[Lord Shutt of Greetland]

My Lords, people can interpret these things differently. However, the agreement of 10 April 1998 quite clearly talks about rights supplementary to those in the European Convention on Human Rights to reflect the particular circumstances of Northern Ireland. It states:

“These additional rights to reflect the principles of mutual respect for the identity and ethos of both communities and parity of esteem, and—taken together with the ECHR— to constitute a Bill of Rights for Northern Ireland”.

Those are the words of the Belfast agreement.

[Baroness Smith of Basildon]

My Lords, the Government said, as the noble Lord has confirmed, that they would return to the issue of the Bill of Rights following the election of the new Assembly and Executive, which are now in place. The Prime Minister has also written that he stands ready to facilitate agreement. Can the noble Lord inform us—I have not got this from his answers so far—of the actions taken by the Government to date, following the elections, to facilitate that agreement? Also, what discussion have the Government had with the commission on the UK Bill of Rights on the Northern Ireland Bill of Rights?

[Lord Shutt of Greetland]

My Lords, I am not certain about discussions with the new UK commission. It is involved throughout the United Kingdom. It has sought people to help it from Northern Ireland, Scotland and Wales. I do not think I am able to say that any further work has been done, but talks about talks are going on. I mentioned that civil servants have already been to Northern Ireland to get things moving. It is only a matter of weeks since the Stormont election and there could be criticism of the time, but this is on a different scale from the 12 years that elapsed under the previous Administration.

Cyprus

Wednesday 15th June 2011 Lords Chamber

Question

15:21

Asked by

[Baroness Hussein-Ece]

To ask Her Majesty’s Government what is their assessment of the recent speech by the United Nations Secretary-General on the lack of progress towards a political solution to a divided Cyprus.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, the United Nations Secretary-General has made it clear that a solution will take compromise and flexibility from both sides. We hope that both leaders take advantage of the meeting with the United Nations Secretary-General, or his representative, on 7 July, and the period leading up to it, to work jointly and concretely towards reaching a mutually acceptable, lasting settlement. We will lend whatever support we are able to in the hope of bringing the negotiations to a successful conclusion.

[Baroness Hussein-Ece]

I thank my noble friend for that reply. He will be aware that United Nations’ peacekeeping troops have been in Cyprus since 1964 and that inter-communal talks have been going on intermittently since 1967. Post the 2004 Annan peace plan, which was rejected by the Greek Cypriots, the Turkish Cypriots remain isolated, while Greek Cypriots are in Europe and are to take over the presidency of the EU next year. If the latest round of talks fails, will it be time to look at other solutions, and is a divided Cyprus in Europe desirable or sustainable?

[Lord Howell of Guildford]

Obviously we hope that the next round of talks will make progress. As the noble Baroness knows, the talks will take place under Alexander Downer, a former Australian Foreign Minister, whom many of us know. I am sure that he will preside skilfully and try to get some advance and agreement. On the role of the Republic of Cyprus in the EU presidency next year, we are confident that it will fulfil its responsibilities under European legislation, as it is required to do. I do not think we need have worries on that score. My noble friend is quite right to say that this has been going on for years—almost back into distant memory—and we long to see real and positive progress, but we think that the UN Secretary-General’s procedures are the right ones to follow to achieve a better base.

[Lord Faulkner of Worcester]

Have there been any developments in the Apostolides v Orams case since the Court of Appeal upheld the European Court of Justice ruling that the judgment of the courts in the Republic of Cyprus had jurisdiction in the Turkish-occupied part of the island? Is it still the Government’s view that British subjects who consider buying property in the north should exercise the greatest care in ensuring that they are entitled to buy that property?

[Lord Howell of Guildford]

On the latter point, it certainly is the Government’s view that the greatest care should be exercised. A complex and sensitive issue of the Cyprus problem is the question of title deeds. Our advice has been to give very clear guidance and to take great caution when purchasing property in Cyprus. I cannot comment particularly on the Orams case at the moment, but the British High Commissioner in Cyprus has raised this issue with the Republic of Cyprus Ministry of the Interior and received assurances that the Cypriot Government intend to introduce a Bill to address the overall problem of finding that the people from whom you bought a property were not the legal owners. I recognise that the issue has affected a large number of British citizens who purchased property in Cyprus. Ultimately, this is a matter for the Cypriot Government.

[Lord Maginnis of Drumglass]

My Lords, does the Foreign Office remember what the Akritas plan was? If so, will the Minister tell the House where else within our sphere of influence has an entire national identity been shunned and isolated, as the Turkish Cypriots’ has been for 37 years for resisting the Greek Cypriot plan to ethnically cleanse them?

[Lord Howell of Guildford]

I think that I can safely say that the Foreign and Commonwealth Office has a pretty long memory about many of these issues. In some cases, as we know from a recent announcement, some of the files were not immediately available but recently have become available about those dark days in the past. The noble Lord is taking us back to many plans and arrangements, going right back to EOKA itself, which ended in tragedy and difficulty and have underpinned the situation we have today of a divided island. The best thing to do is to put these matters behind us and try to build a positive and creative atmosphere in which we can overcome the still considerable range of problems to bring about the end of this island partition and the proper emergence of a bizonal, federal Cyprus.

[Baroness Scott of Needham Market]

My Lords, does the Minister agree that the biggest practical problem facing Cypriots wanting to reunify is the difference in GDP between the two halves of the island, and that the best way of improving things on the Turkish Cypriot side would be for the European Union to implement the direct trade regulation? Can the noble Lord assure us that the Government will really push for this particular measure, which is practical and offers part of a solution?

[Lord Howell of Guildford]

I have two points in answer to my noble friend. First, the EU is putting a considerable volume of funds into northern Cyprus, precisely with the thought that when the happier days come, the disparity in incomes will be somewhat overcome. I have a figure here of €259 million, I think, for the current year, a very considerable sum indeed. That may be over two years, actually. So on that side things are being done. As to the problem of trade between Turkey and the rest of the EU and the bar on the use of Turkish ports by EU or Greek Cypriot shipping in response to the fact that the EU appears to have pursued a policy of isolation of northern Cyprus, that is a very difficult issue. There is a stalemate at the moment, with each side waiting for the other to move. However, I agree with my noble friend that if we can get movement on that front on both sides, trade and prosperity will open up and the problems of northern Cyprus will be further alleviated.

[Lord Corbett of Castle Vale]

May I urge the Minister to continue the support of the United Kingdom for the United Nations recommendation over many years that the answer to the problem in Cyprus is a bizonal, bifederal state based on political equality and that any other solutions simply will not work? It is easy to blame other powers in the region for doing this or that, this year or last year or whenever, but the real answer is that given the active support of the new Turkish Government and the Greek Government and especially in the light of the better relations that now exist between them, they should take the lead to encourage the leaders of both communities in Cyprus that a solution is almost a hand’s reach away if they simply make up their minds to get down to doing this and giving it a try.

[Lord Howell of Guildford]

The noble Lord speaks complete sense, and I agree with very nearly everything he says. Obviously, we have hopes: there is a renewed Government in Turkey, which is playing as a nation a responsible and forward part in the global agenda and certainly the agenda of the entire region. We must look to the Turkish Government to play their part; we must also look to Athens to the Greek Government, who have many problems on their plate at the moment, to be constructive. There is absolutely no doubt that with the right spirit in Athens and Ankara, we really could make progress in this very long-standing problem.

Sudan

Wednesday 15th June 2011 Lords Chamber

Question

15:30

Asked by

[Lord Chidgey]

To ask Her Majesty’s Government what is their response to the situation in Sudan.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, we are deeply concerned by the situation in Abyei and the current violence in Southern Kordofan. We call for an immediate cessation of violence and urge the parties to work through the African Union-facilitated negotiations to resolve their differences. Michael Ryder, the UK special envoy to Sudan, is in Addis Ababa today, supporting these talks. We are particularly concerned by the humanitarian impact and the lack of access for humanitarian agencies. We strongly urge the Sudanese armed forces from the north and the Sudanese People’s Liberation Army to allow humanitarian agencies immediate access to those who most need their help.

[Lord Chidgey]

I am very grateful to my noble friend for that Answer. Does he agree that the situation unfolding in Southern Kordofan is creating a major threat to regional stability? Will he confirm recent reports that of the 60,000 people in Kadugli, 40,000 have fled from the heavy fighting, which has included bombing and strafing by the Sudanese army; and that some 10,000 are now stranded on the roads without sustenance of any form? Will he confirm also the eye-witness reports of the Sudanese army going from house to house, pulling out opposition supporters and local officials and executing them? Will he confirm that UNMIS has completely failed to protect civilians and assure the House that we, as major donors to northern Sudan, will apply every pressure we can to ensure the restoration of peace, the protection of civilians and the securing of access to humanitarian aid before independence on 9 July?

[Lord Howell of Guildford]

My noble friend obviously follows these matters extremely closely. Of course I can confirm his last point; we will use every possible endeavour and will hope that the talks going on under the AU implementation panel in Addis Ababa will begin to lead to a calming down of the situation, and to the necessary humanitarian access that at present is being denied. My noble friend asked whether I could confirm various reports. Obviously, in detail, I cannot. What I can say is that we have had a range of reports with horrifying elements to them. We completely deplore the bombing of civilians by the forces of Sudan and Khartoum. All these developments must cease—there must be an immediate cessation of this kind of fighting—so that we can get back to what we hoped would be a pattern of peace under the comprehensive peace agreement, so that Southern Sudan can move towards its independence day on 9 July.

[Baroness Cox]

My Lords, is the noble Lord aware that there is reliable evidence, including photographic evidence, of the aerial bombardment of civilians in Southern Kordofan, including the use of helicopter gunships to chase civilians like wild animals; and that there are reports of UNMIS forces standing by while northern soldiers kill civilians in front of them? Will the Minister indicate whether Her Majesty's Government will press the UN Security Council to take effective action to ensure that UNMIS forces will be effective in their role, and also to give serious consideration to the priority request of local people for a no-fly zone?

[Lord Howell of Guildford]

The noble Baroness is right when she confirms what I said about the bombing, which we deeply deplore. On the question of UN action, there are proposals that may be moving towards a resolution, but of course resolutions do not necessarily deliver the goods. What is needed is a much stronger operation. UNMIS needs reinforcement and has had some already—although it has not been a total success in protecting civilians from the atrocities that the noble Baroness describes. There is also some hope—perhaps that is too strong a word and I should say some movement forward—to be gained from the agreement that appears to have been accepted in Khartoum that an Ethiopian, non-UN force should intervene in Abyei to try to bring peace and to stop any further fighting and conflict arising both from tribal differences and differences between the north and south.

[The Lord Bishop of Chichester]

My Lords, does the Minister agree with Archbishop Deng, the archbishop of the Episcopal Church of Sudan, that the situation at the moment has all the hallmarks of ethnic cleansing and potential genocide, and that this adds a very particular urgency to the need for effective international action to bring an immediate end to the bloodshed and also to secure a long-term, lasting peace?

[Lord Howell of Guildford]

I agree with the right reverend Prelate. I do not think that there is any doubt that this is a very serious situation, with some extremely ugly developments, and that it needs very urgent action by both north and south—but particularly by the northern forces, which are using heavy weapons to attack civilians in a completely unacceptable way.

[Baroness Kinnock of Holyhead]

My Lords, in the past few days we have heard a number of responses to the terrible situation in Southern Kordofan: the White House has talked about crimes against humanity and the targeting of individuals on ethnic grounds; and the most reverend Primate the Archbishop of Canterbury has described what he calls “government-supported terror” and “another Darfur”. However, from our Foreign Secretary we have had only a short Written Statement which talks of his concerns and condemnation. In response to such appalling atrocities, surely we have a right to expect more assertive words from the British Government, and a commitment to urgent action, such as, particularly, a movement to Chapter VII of the UN Charter.

[Lord Howell of Guildford]

I am the first to salute the noble Baroness’s concerns in this area, but I do not think that she is being quite fair. My right honourable friend the Foreign Secretary has spoken out about these matters both at Foreign Office Questions and in quite long Statements, and I know that it is a major preoccupation. Possibly the best evidence of his close preoccupation with these extremely worrying concerns is that he will attend the independence on 9 July, in Juba, together with other international leaders; the full support which is already reflected in our substantial consulate-general, to be an embassy, in Juba; the extremely close, daily involvement of our officials in the whole operation; and the very substantial aid programmes which we offer both to the new South Sudan as it emerges and to address the continuing problems of north Sudan—providing, I should add, that they, in a sense, follow more responsible policies and cease these hideous, open and atrocious attacks on unarmed civilians.

Undertakings for Collective Investment in Transferable Securities Regulations 2011

Wednesday 15th June 2011 Lords Chamber

Gender Recognition (Approved Countries and Territories) Order 2011

Legal Services Act 2007 (Appeals from Licensing Authority Decisions) Order 2011

Legal Services Act 2007 (The Law Society and The Council for Licensed Conveyancers) (Modifications of Functions) Order 2011

Co-operation in Public Protection Arrangements (UK Border Agency) Order 2011

Equality Act 2010 (Work on Ships and Hovercraft) Regulations 2011

Pensions Act 2007 (Abolition of Contracting-out for Defined Contribution Pension Schemes) (Consequential Amendments) (No. 2) Regulations 2011

Pensions Act 2008 (Abolition of Protected Rights) (Consequential Amendments) (No. 2) Order 2011

Motions to Refer to Grand Committee

15:37

Moved by

[Lord Strathclyde]

That the draft orders and regulations be referred to a Grand Committee.

Motions agreed.

Consumer Insurance (Disclosure and Representations) Bill [HL]

Wednesday 15th June 2011 Lords Chamber

Second Reading

15:37

Moved by

[Lord Sassoon]

That the Bill be now read a second time.

[Lord Sassoon]

My Lords, a Second Reading Committee considered the Bill in the Moses Room on Monday 13 June, and I therefore beg to move this Motion formally.

[Lord Lloyd of Berwick]

My Lords, I regret very much having missed the Second Reading debate on Monday—somehow it escaped my notice. It was a most interesting debate and I should like to have taken part. All I will say now is that this Bill was very well chosen for the new Law Commission Bill procedure and I hope that there are others like it in the pipeline. I support the Motion.

Motion agreed.

Motion

Moved by

[Lord Sassoon]

That the Bill be committed to a Special Public Bill Committee.

Motion agreed.

Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Bill

Wednesday 15th June 2011 Lords Chamber

Order of Commitment Discharged

15:39

Moved by

[Lord Hunt of Wirral]

That the order of commitment be discharged.

[Lord Hunt of Wirral]

My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.

Motion agreed.

European Union BillReport (3rd Day)3.40 pm

Clause 18 : Status of EU law dependent on continuing statutory basis

Amendments 32 to 32B not moved.

Amendment 33

Moved by

[Lord Mackay of Clashfern]

33: Leave out Clause 18 and insert the following new Clause—
“Status of EU law dependent on continuing statutory basis
By virtue of the European Communities Act 1972 directly applicable or directly effective EU law (that is, the rights, powers, liabilities, obligations, restrictions, remedies and procedures referred to in section 2(1) of the European Communities Act 1972) falls to be recognised and available in law in the United Kingdom.”

[Lord Mackay of Clashfern]

My Lords, this amendment relates to Clause 18, which is in the nature of a declaratory clause setting out the position that the Government believe, and I entirely agree, that the operation of European law in the United Kingdom depends on the European Communities Act 1972, which is of course referred to in the clause as proposed by the Government. It is important that this declaratory measure should be made because of the theory sometimes propounded that Community law in the United Kingdom derives from the treaty alone by virtue of the European Union legal order. I believe that it is right that we should make it plain at this juncture that that is not so and that the enforcement of European law in this country is due to the enactment of the 1972 Act.

This may seem theoretical but it is perfectly possible that it might have some practical effect in the event of the passerelle clauses in the Lisbon treaty being adopted. I believe that, ultimately, the question of whether a particular piece of European law applies in the United Kingdom depends on United Kingdom statute. Therefore, the ultimate decision would be for the courts of the United Kingdom. Of course, these courts would take account, no doubt, of any relevant decision of the European Court of Justice in Luxembourg, but this is certainly a possibility. For my part, it is useful to make clear that in our country the law of the European Union is here by virtue of the sovereignty of our Parliament in enacting the 1972 Act. It is also very plain that the 1972 Act was very skilful legislation. For that we must be indebted, primarily, to my noble and learned friend Lord Howe of Aberavon.

My difficulty with the clause as drafted is that it opens with the suggestion that an Act should be referred to. We discussed this in Committee, when I moved an amendment of the same kind as I am moving today. The answer was that European law is not enforced in the United Kingdom solely by reference to the 1972 Act because a number of other statutes seek to do this, which my noble friend Lord Howell listed. Whether he is asserting that that is a complete list, I am not certain, but at least it is quite a long list. As I understand it, the important thing about these Acts is that they use the definition of Community law and Community treaties derived from the 1972 Act. Therefore, if the 1972 Act were repealed, they would be deprived of content in so far as they seek to impose European law in our country. The question arises in connection with, for example, the devolution statutes, where provision is made for ensuring that the devolved Administrations do not go off the rails in relation to Community law. That may or may not be a risk, but at any rate it is one for which it was thought wise to make provision.

The situation is that apparently there are a number of other Acts which use the European Communities Act 1972 for definition purposes. The Interpretation Act makes it clear that where a phrase such as “Community treaties” is used in a later Act, that is the meaning that is to be attributed to the phrase. If the European Communities Act 1972 were to be repealed, the definitions would be absolutely empty and these other Acts would have no effect. I therefore submit that it is amply sufficient to mention the 1972 Act and that the phrase “an Act” is certainly capable of a variety of interpretations, to some of which the noble Lord, Lord Kerr of Kinlochard, referred in Committee. For myself, I do not think that the Government intended any sinister meaning, but they have used an extraordinary shorthand in saying “an Act” when apparently they meant a list of Acts. It is much clearer and more effective to alter “an Act” to the Act that we know is responsible; namely, the 1972 Act.

I am grateful to my noble friend Lord Howell and the noble and learned Lord, Lord Wallace of Tankerness, for meeting me to discuss this matter. There is very little between us on the point of principle, but it is quite important that this singular and central Act should be the pillar of our understanding of the basis on which Community law applies in this country and that the idea that we have submitted to Europe without the sovereignty of Parliament being behind it is absolutely incorrect. A clear assertion of the Act which does this would, in my submission, be extremely useful. To water it down or make it ambiguous by referring to “an Act” is unfortunate. I beg to move.

15:45

[Lord Kerr of Kinlochard]

My Lords, I shall be brief because the argument I would have made has just been expressed much more clearly than I could have done, thanks to the legal wisdom of the noble and learned Lord, Lord Mackay of Clashfern. He referred to my concerns and suspicions about the use of the generic term “an Act” rather than a straightforward reference to the 1972 Act. I am concerned that there might be some sort of dog whistle motive here in that there could be an indication, for those who wish to hear it, that we might be able to disapply a particular future Act if we were to choose to dislike it. I am sure that that was not the Government’s motive. I share the scepticism of the noble and learned Lord, Lord Mackay, about whether that could be the motivation, because it would be completely misleading.

Directly applicable EU laws apply in this country for as long as we do not repeal the 1972 Act. The converse is the case, of course, as the noble and learned Lord has explained. It all hangs on the 1972 Act. The present clause even refers to the definitions in the 1972 Act, so if we repealed that Act, all directly applicable laws would cease to have effect in this country and we would be leaving the European Union. Why do we not just say that?

In my heart, I would like to have no Clause 18 because in principle I do not like declaratory clauses. My head tells me that we cannot get rid of it and therefore we have to get it right. That is the case for Amendment 33.

[Lord Waddington]

There is just one little matter that puzzles me and I would be very grateful for my noble and learned friend’s help on it. If Amendment 32B is read along with Amendment 33, it seems to suggest that Amendment 33 covers all the ground in Clause 18 but merely puts it better. In fact, Amendment 33 does not address one of the matters which Clause 18 seeks to address; that is, the suggestion that EU law may be binding on us quite irrespective of any Act of Parliament. I wonder what my noble and learned friend’s answer is to that, because I do not think that his Amendment 33 covers one of the matters which Clause 18 seeks to address. The argument advanced by counsel in the metric martyrs case suggested that EU law was binding on this country quite apart from any Act of this Parliament.

[Lord Lester of Herne Hill]

I have added my name to the amendment. When I was young and at the Bar I remember that there was a High Court judge all of whose judgments were two words: “I agree”. I shall do my best to follow that admirable example as I agree with the analysis of the noble and learned Lord, Lord Mackay of Clashfern. I want to add a couple of things. First, paragraph 114 of the Explanatory Notes refers to a case that I was in more than 30 years ago, Macarthys Ltd v Smith, in which Lord Denning set out the exact position recited in that paragraph. The Explanatory Notes recite:

“As Lord Denning noted in the case of Macarthys Ltd v. Smith … ‘Community law is part of our law by our own statute, the European Communities Act 1972. Community law is now part of our law: and whenever there is any inconsistency, Community law has priority. It is not supplanting English law. It is part of our law which overrides any other part which is inconsistent with it.’”

That is exactly what this amendment puts into statutory language. The 1972 Act, the brilliant Act, if I may say so in his presence, introduced by my noble and learned friend Lord Howe of Aberavon, is the organic Act. That Act is the parent. It is that Act which made sure that the binding force of European Community law would not be directly as a result of judgments of the Luxembourg Court but would be directly as a result of the Geoffrey Howe Act. That is what is said here. To recite further Acts which have come in afterwards by way of a list, as the noble and learned Lord, Lord Mackay, has indicated, is inappropriate.

[Lord Williamson of Horton]

It seems a long time since we discussed Clause 18 at Second Reading and in Committee. I would recall that it is only tenuously linked to the referendum lock clauses. It has been described as the parliamentary sovereignty clause, but it is perhaps best described, as in the words of the Bill, as a clause on the “status of EU law”. It is a declaratory provision which confirms—it does not establish—that directly applicable or directly effective EU law takes effect in the UK only as a result of an Act of Parliament. Some people do not like declaratory provisions in legislation, but the Government may certainly propose such a clause if they think it has importance in maintaining public confidence by confirming, for the first time in statute, our existing treatment of EU law within the UK’s domestic legal order. It is consistent with the decisions of our courts, notably by Lord Denning in Macarthys Ltd v Smith in 1979.

Amendment 32B has not been moved, so Clause 18 is in the Bill and we have a choice between the Government’s text and the revised text proposed in Amendment 33, which refers specifically to the European Communities Act 1972 rather than to an Act of Parliament. The Explanatory Notes to the Bill state that the words,

“by virtue of an Act of Parliament”,

cover UK subordinate legislation made under Acts and also Acts and measures of the devolved legislatures in exercise of the powers conferred on them by the relevant UK primary legislation.

That is the description, but will the Minister say—this is the same point that has been broadly covered by the noble and learned Lord, Lord Mackay— whether that is the specific reason why these words were chosen in the Government’s text? As everything seems to come back to the European Communities Act 1972, would the reference to that Act in the text of the amendments not also cover subordinate legislation and Acts of the devolved legislatures? That is what has been stated and I should like the Government to confirm whether that is the case.

[Lord Waddington]

Before my noble friend sits down, does he not agree that however elegant may be the language of Amendment 33 and although it states clearly that EU law is binding in this country because of the 1972 Act, it does not scotch the proposition that EU law may be binding for other reasons. That is surely the point. It says only that EU law is binding because of that because we know it. What we want to be sure of is that the argument that EU law may be binding other than for that reason is not allowed to fly.

[Lord Williamson of Horton]

I do not agree with that. I think that the point is fully covered by the declaratory provision that the Government have put forward and the possible amendment of it.

[Lord Pannick]

My Lords, I, too, support the amendment. It removes the obscurity and the uncertainty in Clause 18. My answer to the question that has been posed twice now by the noble Lord, Lord Waddington, is that the amendment is clear. It is “by virtue” of the 1972 Act and therefore by virtue of nothing else that EU law is recognised and available in law in the United Kingdom. It cannot mean anything other than that. The clarity is provided, in my opinion, by the amendment. The noble and learned Lord, Lord Mackay of Clashfern, explained that the answer given by the Minister in Committee about why the clause refers generally to an Act of Parliament rather than to the 1972 Act was because there are other uses of primary legislation, such as the Equality Act, that give effect to aspects of EU law.

I will add to the noble and learned Lord’s explanation about why it is not appropriate for Clause 18 to be drafted in this general manner. First, the constitutional concern that Clause 18 seeks to address and to which he referred does not arise out of the fact that Parliament has on occasions chosen to refer to EU law obligations. The constitutional concern—and I do not share this concern—is that the 1972 Act generally imports EU law rights, powers, remedies and so forth into United Kingdom law without the need for specific enactment. If Clause 18 has any purpose at all it is to emphasise that just as Parliament created this status for EU law by the 1972 Act—and it was only by the 1972 Act—so Parliament may take it away.

The other reason why it is appropriate in Clause 18 to focus on the 1972 Act and not generally is that the 1972 Act did not just give legal effect to EU law rights by Section 2(1). Section 3 provides for recognition by English courts of EU treaties and instruments, and for such matters to be questions of law to be determined in a court in accordance with the decisions of the European Court of Justice.

16:00

There is no doubt whatever that, if Parliament were to decide in future to repeal or modify the 1972 Act or create exceptions to it, and were to do so unambiguously in primary legislation, then the courts of this country would give effect to that political decision. I share the doubt of the noble Lord, Lord Kerr, that Clause 18 is needed at all. I am concerned that to enact Clause 18 will wrongly suggest that in its absence there would be any room for real doubt on this subject. If we must have Clause 18, then let us not add to the confusion and obscurity. Let us be clear about this. For that reason, I support the amendment.

[Lord Howe of Aberavon]

My Lords, I rise with some hesitation for the second time on the Bill, partly because I do not have with me the actual 1972 Act—nobody else has quoted it. That quite clearly provides for the incorporation, as the noble Lord has just said. I am being offered a copy of it. It speaks for itself as follows, under the title, “General implementation of Treaties”:

“All such rights, powers, liabilities, obligations and restrictions from time to time treated or arising by or under the Treaties, and all such remedies and procedures from time to time provided for by or under the Treaties, as in accordance with the Treaties are without further enactment to be given legal effect or used in the United Kingdom shall be recognised and available in law, and be enforced, allowed and followed accordingly; and the expression ‘enforceable Community right’ and similar expressions shall be read as referring to one to which this subsection applies”.

Nothing could be more comprehensive or comprehensible than that. I emphasise the three words, “without further enactment”.

I repudiate any tributes that may have been paid to me. I did not draft that. It would have been wholly beyond my capability then and indeed now to draft a provision of such clarity and formidable length as that. If we must pay tribute to the author, it was the senior parliamentary counsel, Sir John Fiennes. It was a truly remarkable Act. It is absolutely clear and it is one of the foundations of the treaty to which we belong. I cannot really say anything more than that. It suffices to rest content with the re-enactment, as it were, of the recognition of another time for something that has been the foundation of our membership of the European Community from the outset.

If I may be less than frivolous and make a sad observation, a memorial service takes place in Gray’s Inn at 5 pm this evening and I hope that the House will forgive me if I do not remain until the end of the debate on this proposed new clause if it lasts that long.

[Lord Richard]

I have two things to say very briefly about this. On Second Reading, I think I made it clear that I did not approve of Clause 18. I did not think that it was needed, as it seemed to me purely declaratory. It did not add anything or take anything away from the law; it was a statement of what the law was—and it is perfectly clear that we all knew what the law was, and we all know what it is. So I was a little surprised to see the terms of the amendment proposed by the noble and learned Lord, Lord Mackay of Clashfern. If we have to have a declaratory clause of this sort on this issue, I would vastly prefer his drafting than the original government drafting, but I accept and would vote for the amendment with some considerable reluctance. In my limited experience of declaratory clauses, which is not as great as that of the noble and learned Lord, on the whole clauses that are meant to clarify the law very frequently have precisely the opposite effect. I am doubtful about it and do not like it, but in the end I will support it.

[Lord Flight]

My Lords, I rise with some trepidation, as I am not a lawyer. I have not been entirely satisfied by the arguments that have been put forward by both the noble and learned Lord, Lord Mackay, and other eminent lawyers in the House that we can rely entirely on the 1972 Act and the fact that apparently subsequent legislation depends on the definitions in that Act, to the effect that the 1972 Act covers all relevant legislation.

The noble and learned Lord made the point that there was very little difference between his position and that of the Government in this territory, so I wonder what is wrong with taking a belt and braces approach to this matter. If I understand the position, there are other sources in relation to subsequent Acts that are as drafted not wholly dependent on the 1972 Act, and EU law can be given legal effect in the UK by secondary delegated legislation and not just by primary legislation.

[Lord Lester of Herne Hill]

I realise the noble Lord is not a lawyer and what I am about to say may seem unfair, but the answer to what is wrong with his suggestion is that the Court of Appeal and the House of Lords in the cases of Macarthys v Smith and Factortame have made the legal position perfectly plain. That is why the noble Lord, Lord Richard, is right in saying that we do not need Clause 18, but if we are going to have it we may as well have it stating the law as declared by our judges.

[Lord Flight]

I should probably defer to the noble Lord, but I do not think that was a full answer to my mind to the points raised by the noble Lord, Lord Waddington, or to the whole issue of judges subsequently choosing to interpret the position with regard to the martyrs’ case. It seems perfectly possible in theory that there may be a House of Lords judgment which is perfectly valid and accepted at the time it is given, but subsequently manages to get twisted by the interpretation of particular judgments by noble Lords. I come back to the rather straightforward point, which is that from the point of view of those who wish to have this territory absolutely nailed, what is wrong with a belt and braces approach?

[Lord Deben]

I would not like it to be thought by your Lordships that those who were not lawyers disagreed with the lawyers. As a non-lawyer, it seems to me to be very clear that there is a good reason why we should not have the additional parts: it is misleading to have them. It suggests that the additional parts have the same validity and strength as the central issue of the 1972 Act. I would account it as the proudest moment of my parliamentary history when I voted for that Act—it was the moment when we achieved the thing that in all my young life I longed to achieve, which was the beginning of closer European unity, for which I have always stood. I do not want that Act to be removed from its pedestal place. It is the Act that says, very clearly, that the United Kingdom is a sovereign state, and from its sovereignty it grants this particular place for European legislation. Should at some future time a Government, in foolishness almost unimaginable, decide that they did not wish to continue with that Act this sovereign Parliament could, by repealing that Act, change the circumstances—and change them of its own strength, volition and powers.

This is a declaratory statement. I agree with the noble Lord, Lord Richard, that it is not necessary but given that it has been raised, it becomes necessary. Now that it is necessary it is crucial that it should be extremely clear. The noble and learned Lord, Lord Mackay of Clashfern, has given a great opportunity to this House to unite around something which should not divide those on either side of the European divide, or indeed those in the general mishmash in the middle. The worry which I have—this is why I have become less happy in the mean time—is the question which the noble Lord, Lord Kerr, raised earlier: if the Government do not accept this as a reasonable matter, what is it that is hidden in that alternative? For this must be right and if it is not, the rest is wrong.

I shall say one thing to the noble Lord, Lord Waddington. If his worry is a real one, he is worried by either of the statements before us. If his worry is a real one and the noble Lord, Lord Pannick, got it wrong, the fact is that he would be wrong about the Government’s formulation as well. Although I therefore have sympathy with the noble Lord, Lord Waddington, he cannot defeat his problem by preferring the one against the other. To defeat his problem, he would have to initiate some extra bit to the Act to make it clear. I do not believe that is necessary but his intervention, although admirable, is really not about the division between these two formulations, so I pray that your Lordships’ House will support the amendment.

However, I would like it even more if the Government were to say that they thought, on balance, it would be better to go with what is clearly a widely held feeling in all parts of the House and with those who are in favour and those who are against our membership of the European Union.

[Lord Elystan-Morgan]

My Lords, it does not matter a great deal whether the submission made by the noble Lord, Lord Deben, or that made by the noble Lord, Lord Waddington, is correct. At the end of the day, it means not only that the European Communities Act 1972 made great inroads into our independence but that other Acts of Parliament have done exactly the same. However, through the machinery of Section 3 of the 1972 Act, the inroads are not permanent. They are as permanent as we wish them to be. It is very much the same as if we made a lease of part of our sovereignty, but a lease that we can recall and cancel at any time we so decide.

The only other matter that I would like to mention is the modesty with which the noble and learned Lord, Lord Howe, disassociated himself from the triumph of the 1972 legislation passing through the House of Commons. It is true that he did not draft the Bill, but he steered it with magnificent competence through the House. I remember the back-handed compliment which he had from the late Michael Foot, who said words exactly like these: “The honourable and learned gentleman the Solicitor-General has shown such nimbleness and adroitness as would make the great Houdini look like a helpless arthritic”.

16:15

[Lord Stoddart of Swindon]

My Lords, I took part in the debate on this clause in Committee. I remain completely opposed to its inclusion in the Bill. I agree with the noble Lords, Lord Richard and Lord Deben: it should not be there, it is not necessary and it is dangerous that it should be there. It is clear to virtually everyone that the 1972 Act is the only means by which European law can be introduced and enforced in this country. It is an absolute situation that one Parliament cannot bind its successor. Therefore, an Act of Parliament such as the 1972 Act can be repealed. I have been told time and again by the government Front Bench, whether Conservative or Labour, when I have said that we are locked into this and have lost sovereignty, that our sovereignty lies in the 1972 Act. As I say, that is absolute; there is no need at all to qualify it.

I am in something of a quandary. The amendment is probably better than the original clause, but really I do not want the amendment either. What on earth am I supposed to do? If I vote for the amendment, we still have this qualification in the Bill about the absolute nature of the European Communities Act 1972. If I want to vote out any reference to that Act, which is what I would need to do, I have to vote against the amendment and then vote against the original clause. Is that the case, or is there some way around that? If any noble Lord could advise me on how to get this obnoxious clause out of the Bill, I would be most obliged.

[Lord Spicer]

My Lords—

[Lord Pearson of Rannoch]

My Lords—

[Lord Triesman]

My Lords—

[Lord Pearson of Rannoch]

My Lords, I think the noble Lord, Lord Spicer, and I have something to say.

[Lord Spicer]

My Lords, I had not meant to say anything at all until I heard some of the arguments. It seems that the 1972 Act is not totally invulnerable. Factortame was a nasty scare. Therefore, the last thing that we want to do at this stage is to throw further doubt on the 1972 Act by talking about “an Act” rather than the 1972 Act.

[Lord Pearson of Rannoch]

My Lords, I have two questions for the Minister that I asked in Committee but to which I did not get an answer. First, will he confirm that the noble Lord, Lord Kerr of Kinlochard, is 100 per cent right when he says that when the happy day comes—he did not put it like that—when the 1972 Act is repealed by the House of Commons and your Lordships’ House, it will then be definite that we are out of the European Union?

However, the question is not quite as simple as that. In January 1997, your Lordships were good enough to give Second Reading to a Bill in my name that did exactly that—it repealed the 1972 Act. At the time I was advised by the Clerks that this would still leave us with a problem from the Eurosceptic point of view, which wants nothing to do with any European legislation whatever. That problem would be that all the EU law that had been sewn into domestic law since 1972 would remain valid in British law. At the time, the Clerks advised me that one is not allowed to introduce a Bill into your Lordships’ House that is not capable of practical fulfilment. Their advice at the time was that it would have taken 12 parliamentary draftsmen some three months to identify all EU law sewn into domestic law, which could then have been repealed at our leisure. I am glad to say that they even suggested having a massive Henry VIII clause at the end of the procedure. Therefore, my first question to the Minister is: would it really still be the case that EU law remained in British law? There is far too much of it; nowadays the majority of our national law is passed in a wholly undemocratic process in Brussels to the exclusion of Parliament in this country.

My second question to the Minister was, and is, as follows. When, as I say, the joyous day comes that the 1972 Act is repealed, that surely means that the Lisbon treaty falls in its entirety, because the Lisbon treaty is only an amendment to several other amendments to the 1972 Act. When that happens, is this country still obliged to follow the provisions of the Lisbon treaty which govern how a country leaves the European Union? That is a process, I think—I may be wrong—under Article 50 of the Lisbon treaty, which takes two years and puts the Council in charge of the process and, indeed, the cost of the country leaving the European Union. When we repeal the 1972 Act, does that provision fall as well? Are we then, as the noble Lord, Lord Kerr, said, free of the whole wretched thing, or are we still bound by Lisbon? What about the domestic law which is sewn into our law? Surely that remains binding until repealed by Parliament.

[Lord Triesman]

My Lords, I apologise to both noble Lords who have just spoken. In my eagerness to get up I may have mistakenly thought that we were coming towards the end of a deliberation. My reason for thinking that was that this has been in some ways a very one-sided debate. There does not seem to be huge difference across the House, whether it is between lawyers or non-lawyers or members of one party or another. For those reasons, I hope that the House will allow me, a non-lawyer, at least temporarily to fill the shoes of the noble and learned Lord, Lord Falconer of Thoroton, whose name is to the amendment.

A number of noble Lords have made very clear-cut responses to the point made by the noble Lord, Lord Waddington. I fear that the noble Lord, Lord Flight, is frightening himself with what may be extremely fanciful personal anxieties, which I hope that he will be able to put to bed as he rests tonight. The noble Lord, Lord Pearson, does not seem to be speaking to this debate, amendment or, indeed, to anything else that your Lordships are discussing. As I understand it—no doubt I will be corrected if I am wrong, not least by the noble Lord—we are not debating the repeal of the 1972 Act, but trying to understand its status in United Kingdom law.

[Lord Pearson of Rannoch]

My Lords, in actual fact what I have said is relevant to this amendment because it says that all British law is only there because of the 1972 Act. I am merely asking what happens when it is repealed.

[Lord Triesman]

My Lords, I am sure that on the day that proposition is in front of the House, we will have an energetic debate and probably get to the bottom of it at that time. I am very tempted to respond to the noble Lord, Lord Stoddart, who asked what he should do. It would probably be ungracious to try to answer that question, but I suppose that sitting on his hands or repairing to one of the bars are among the available options. However, he illustrated the fact that there is a great deal of commonality right across the House on this issue.

I am among those who do not like declaratory clauses—I am wholly with my noble friend Lord Richard and the noble Lord, Lord Kerr, on this. I cannot understand what such clauses do other than call into question the fundamentals of our law and the statements that have been made about our law by the House of Lords and others. I cannot see the point. However, I accept that it is a political reality that there is a desire to see this kind of declaration in the Bill. That is why we support the amendment. If there is to be a declaration, it might as well be accurate. If we are going to declare things, let us be precise and accurate. The whole debate boils down to a simple proposition about what we learnt was Sir John Fiennes’s excellent writing of the original legislation, regarding which the noble and learned Lord, Lord Howe, was far too modest about his role.

That Act and Section 3 in particular are the head lease. There is nothing in any other Act that does not flow from it. The more we try to obscure that or suggest that there are other things that may flow from it, the less likely it is that anyone will understand that the declaration is accurate in any sense. This is a technical, not a party political, matter. We have had fantastically good advice. What a benefit it has been to all of us. Let us carry the amendment, which I hope will be pressed, and have a declaration that we can at least say is accurate.

[The Advocate-General for Scotland (Lord Wallace of Tankerness)]

My Lords, I thank my noble and learned friend Lord Mackay of Clashfern for moving the amendment in the name of the noble Lord, Lord Kerr of Kinlochard. Indeed, I thank all noble Lords who have taken part in an important debate, which has flagged up the importance of the basis on which community law has effect in the legal systems of the United Kingdom. My noble and learned friend said that there was nothing in principle that divides us on this matter. As the noble Lord, Lord Triesman, said, it is a technical matter that to some extent relates to statutory interpretation. I hope that everything that has been said previously in Committee, and what I will say today, will reassure the noble Lord, Lord Kerr, that there is neither sinister intention, nor are any dog whistles being blown. The purpose is to assert the position that almost everyone who has contributed to the debate has made clear—European Union law has effect in the United Kingdom by virtue of statute passed by Parliament.

I join the tributes paid to my noble and learned friend Lord Howe of Aberavon, who, we fully understand, has gone to a memorial service. My noble friend Lord Lester of Herne Hill quoted Lord Denning in the case of Macarthys Ltd v Smith, in which he indicated that,

“Community law is part of our law by our own statute”.

Dealing with the question of where Parliament stood on this, in the passage from the debates on the 1972 legislation quoted by the Constitution Committee in its report, my noble and learned friend Lord Howe of Aberavon said:

“the position is that the ultimate supremacy of Parliament will not be affected, and it will not be affected because it cannot be affected”.—[Official Report, Commons, 5/7/72; col. 627.]

That is something to which we as a Government would certainly subscribe.

The key reason for wanting this declaration is that in spite of that, and in spite of the near unanimity in this Chamber that that is the position, we are aware that others have advanced arguments in courts or have written articles that have cast some doubt on that assertion. I know that there are always reservations about what are essentially declaratory clauses in Bills, but this one is important. As your Lordships’ Constitution Committee indicated,

“Clause 18 is self-evident: it restates, but does not change, the law”.

In response to one of the points made by the noble Lord, Lord Pannick, I should say that including such a declaration in no way raises doubts about other issues of parliamentary sovereignty. The Constitution Committee said:

“We are confident that if parliamentary sovereignty were to be questioned in any other context, the existence of clause 18 would not prevent the courts from upholding the well understood and orthodox position”.

16:30

We come down to why the wording in the Bill is to be preferred to that in the amendment. I agree with the proposers of the amendment that directly effective and applicable European law can take place within the United Kingdom's legal order only provided that Parliament has determined that through its Acts. Where our views diverge is on whether the European Communities Act 1972 alone is the basis on which that has been achieved within the United Kingdom or whether other Acts of Parliament may also give effect to directly applicable and directly effective European law, independent of the 1972 Act. I am grateful to my noble and learned friend Lord Mackay of Clashfern for making himself available to discuss the matter with my noble friend Lord Howell and me. I know that he is aware that the Government have considered the amendment very carefully indeed.

I shall set out to the House the reasons why our strong, firm preference is for the wording as in the Bill. The amendment is based on the proposition that EU law takes effect within the United Kingdom legal order by virtue of the 1972 Act. I shall come on to deal with the point made by my noble friend Lord Waddington that it does not say, “by that Act alone”. That may have been the intention, but it does not say that. In so far as other primary UK legislation may be given effect, those who have argued for the amendment argued that other legislation is merely consequential on the existence of the 1972 Act.

I can assure your Lordships' House that, in drawing up the Bill, we carefully considered whether it would be sufficient to couch a clause in terms very similar to the amendment, but after consideration we determined that it would not. My noble friend Lord Deben used the phrase “pivotal place” to describe the 1972 Act. The 1972 Act undoubtedly has a pivotal place. It is the key mechanism by which directly effective and directly applicable European Union law has been given effect in the United Kingdom, but on analysis of the full range of legislation under which EU obligations have been given effect, we concluded that to refer solely to the 1972 Act would not provide a sufficiently comprehensive and accurate statement of the legal position.

Other pieces of UK primary legislation exist independently of the European Communities Act and have been giving effect to EU law obligations. For example, the devolution settlements require Ministers to act in a manner compatible with EU law. Some of those instruments define EU obligations in a manner similar to the language used in Section 2(1) of the 1972 Act but, significantly, not by reference to it. For example, Section 126(9) of the Scotland Act defines Community law as,

“all those rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Community Treaties, and … all those remedies and procedures from time to time provided for by or under the Community Treaties”.

I accept that the term “Community treaties” is defined under Schedule 1 of the Interpretation Act 1978 by reference to Section 1 of and Schedule 1 to the European Communities Act 1972, and has meanings prescribed by that Act, but there is no cross-reference to Section 2(1) of the 1972 Act.

It might be suggested that all other legislation would be considered consequential on the 1972 Act rather than free-standing, but our conclusion is that that legislation is independent of the 1972 Act: that in so far as it makes directly effective or directly applicable European Union law within the United Kingdom legal order, it does so in its own right and not as a consequence of the 1972 Act.

It has been suggested that if the 1972 Act were ever repealed, all those other statutes would be utterly deprived of their content—that was the point made in advance by my noble and learned friend—at least in so far as those statutes relate to Community law. The Government accepts that if the 1972 Act were ever repealed, other references in other pieces of legislation would also be repealed. The circumstances in which that happened would be of fundamental political importance. However, that would not be as a consequence of the repeal of the 1972 Act per se, but because the 1972 Act and all the other legislation would be repealed only in the context of the United Kingdom’s withdrawal from the European Union—which, I hasten to add to reassure the majority of the House, is certainly not on the Government's agenda. In other words, the existence of these other Acts is independent of the 1972 Act. They flow from the United Kingdom’s treaty obligations and do not depend on the European Communities Act 1972. If, for example, the provisions in Section 126(9) of the Scotland Act, to which I referred, were not repealed, they would still be self-standing.

I accept that the problem would be the question of definition of “Community treaties”, and that might well have to be argued before the courts. I suspect that my noble and learned friend would argue that it was devoid of meaning, but it is not clear that that would be the case. Indeed, it might well be argued that the very fact that Parliament chose not to repeal these provisions—in what is seen as a very important constitutional piece of legislation defining the powers and the scope of the Scottish Parliament—gave the matter some significance. That is hypothetical and may well be academic, but it was against that background that we wished to make sure that, when we put this provision into the Bill, we were being comprehensive.

In Committee, my noble friend Lord Howell mentioned on Clause 18 that there were other pieces of legislation. Examples include the Company Directors Disqualification Act 1986, the Chiropractors Act 1994 and the Competition Act 1998. Perhaps I may illustrate by reference to the Company Directors Disqualification Act 1986 the precise issues on which I should like the House to reflect. Under Section 9A of that Act, the United Kingdom must make a disqualification order against a person in certain circumstances, including where an undertaking commits a breach of competition law under either Articles 81 or 82 of the EC treaty, now Articles 101 and 102 of the TFEU. The Act refers directly to these treaty provisions without reference to the 1972 Act, and thus a court would be required to take these provisions into account, even in the absence of the 1972 Act. As I said, we are getting into statutory interpretation here. Nevertheless, we have proceeded as we have because we wished to be comprehensive.

Perhaps I may refer to the point made by my noble friend Lord Waddington. The amendment misses out what I believe to be an important qualification or point in the proposed new clause. The words at the beginning of Clause 18 make it explicit:

“It is only by virtue of an Act of Parliament that directly applicable or directly effective EU law … falls to be recognised and available in law in the United Kingdom”.

The amendment misses out the word “only”, leaving open the possibility of arguments being made that—

[Lord Kerr of Kinlochard]

I remind the Minister of the argument made by my noble friend Lord Pannick. If I introduced him to a lady and said that she was my wife because I married her, would I be required to say, “and because I have not married anybody else”?

[Lord Wallace of Tankerness]

No, my Lords, but one should consider the context. This new clause was proposed in its original form in the context of trying to lay to rest any contrary suggestion that there are other means—means which I do not think anyone in this debate has accepted; nevertheless, they are out there and are run as arguments—by which European Union law can be imported into the legal systems of the United Kingdom. That is why we use “only”.

[Lord Lester of Herne Hill]

I hope that my noble and learned friend takes this question in the spirit in which I ask it. Is there not a danger that his approach would be in accordance with Lord Wilberforce’s warning about the “austerity of tabulated legalism”?

[Lord Wallace of Tankerness]

That is the sort of question that one wants notice of and where the answer might in any case be misinterpreted. I think that I made it clear, and that it has been generally recognised in these debates, that this is against a background of suggestions made not in this Chamber—I think the position is perfectly well understood here—but elsewhere that there could be other channels via which European Union law could be imported into this country. We want to make it clear—I think there is near unanimity in the House—that it is by Acts of Queen and Parliament that the European Union law has effect.

The main difference between us is the view expressed in the amendment that the European Communities Act 1972 is the sole legislative vehicle for doing this. Our concern is that there are other Acts of the United Kingdom Parliament which make direct reference to European Union law, particularly the one on directors’ disqualification, which does so without reference to any other form of the 1972 legislation, even through the Interpretation Act. As my noble friend Lord Flight said, it is belt and braces. In a situation such as this we believe that the belt and braces are required. It is a fine point—not one of principle, but it is one of statutory interpretation. We believe that to list would not be neat because of the danger of leaving one out, but we need to make it very clear that European law becomes part of our United Kingdom legal system through an Act of Parliament. That is the way it happens and by no other way. To limit it to one Act, however fundamentally important that Act, runs the risk of leaving others out which are already on our statute book. For that reason, I invite my noble and learned friend to withdraw the amendment.

[Lord Mackay of Clashfern]

My Lords, there is not much between us. On the other hand, it is important to have clarity. If there are other Acts which are required in relation to this situation, the option is to mention them. The words “an Act” do not give any precision whatever. Therefore, the use of the phrase,

“of the European Communities Act 1972”,

is much clearer.

I think I am right in saying that the statutes, which are referred to as being other statutes—part of “an Act”—use the words defined in the European Communities Act; for example, the Community treaties. Those words are specified in the 1972 Act. All those Acts, in their dealing with European Community law, would be understood as having the meaning assigned to these phrases in the 1972 Act. If the 1972 Act were to be repealed, those phrases would be repealed with it because they would be deprived of the meaning which they had when the Act was enacted.

My noble friend Lord Waddington asked about “only”. If he wants to improve our amendment, it is open to him to propose an amendment to that effect. Of course, that is still possible. If the amendment is passed, he could improve it at Third Reading because I am sure that clarification of an amendment passed on Report would be possible at Third Reading. I do not think it is required, but if he thinks it would improve it, let us see.

This amendment specifies the Act on which we rely. My noble friend Lord Flight talks about belt and braces—I suppose I am getting to the stage when they may be an important matter. If I am right, all the European legislation which is incorporated into our law has been done by virtue of the European Communities Act and the definitions provided in that Act.

[Lord Elton]

The lay men are floundering. My noble and learned friend rests a great deal on the importance of the definitions in the 1972 Act and said that if the Act were repealed these words would be repealed as well. I take it that he in fact means that the definition would be repealed but the words would still have a meaning and therefore the meaning could well be that intended in the original Act.

[Lord Mackay of Clashfern]

The possibility is that the 1972 Act is on the statute book when these later Acts were passed. Therefore, phrases like “the treaties” and “the community treaties” would be interpreted in the light of the 1972 Act. If the 1972 Act were repealed, these definitions would disappear altogether and there would be no phrase left of that kind because these phrases are all given the meaning of the 1972 Act. If you look at it this way, if a phrase is interpreted as being what it says in the 1972 Act and the 1972 Act is repealed, that phrase has no meaning at all thereafter, so this is really quite an important issue.

[Lord Wallace of Tankerness]

Will my noble and learned friend respond to my point about the Company Directors Disqualification Act 1986, which refers in Section 9A specifically to:

“Article 81 of the Treaty establishing the European Community (prohibition on agreements, etc, preventing restricting or distorting competition)”,

and, in the following subsection, to Article 82 of that treaty, where it is not by reference to treaties in the 1972 Act but by specific reference to a specific treaty? If the 1972 Act were repealed would these words still not stand?

[Lord Mackay of Clashfern]

I suggest that the European Community treaty of itself would not be meaningful in our statutes until it was given effect by the 1972 Act; and when the 1972 Act ceases to operate, that goes along with it. That is the fundamental position. As far as trying to help the noble Lord, Lord Stoddart of Swindon, is concerned, I am not sure that it is my business to do that. The best advice I can give him, of course, is to support this amendment, and I think it right that the opinion of the House should be taken.

16:47

Division 1

Ayes: 242

---

Labour: 163
Crossbench: 49
Liberal Democrat: 9
Conservative: 5
Bishops: 3
Democratic Unionist Party: 2
Independent: 2
Ulster Unionist Party: 1
Plaid Cymru: 1

Noes: 209

---

Conservative: 128
Liberal Democrat: 59
Crossbench: 12
Ulster Unionist Party: 3
UK Independence Party: 1
Bishops: 1

17:02

Amendment 33A had been retabled as Amendment 32B.

Amendment 34 not moved.

Amendment 35

Moved by

[Lord Kerr of Kinlochard]

35: After Clause 21, insert the following new Clause—
“Duration of Part 1 and Schedule 1 (No. 2)
(1) Part 1 and Schedule 1 shall expire on the day on which the Parliament in which this Act is passed dissolves.
(2) In subsequent Parliaments, the Secretary of State may by order provide that Part 1 and Schedule 1 shall be deemed to have been revived from the beginning of the Parliament in which the order is made.
(3) An order under subsection (2) shall provide that Part 1 and Schedule 1 shall expire on the day on which the Parliament in which the order is made dissolves.
(4) An order under subsection (2)—
(a) must be made by statutory instrument, and(b) may not be made unless a draft has been laid before and approved by a resolution of each House of Parliament.”

[Lord Kerr of Kinlochard]

My Lords, this is the Hemingway amendment—because the sun also rises. This amendment is really rather important. I wish to speak for it on constitutional grounds and on grounds of foreign policy. I shall make an argument about parliamentary sovereignty, and an argument about the national interest.

I begin with the constitutional argument. I see two of them. First, the provisions of this Bill are all otiose in this Parliament. The coalition has made it clear that there will in this Parliament be no treaty changes, no transfers of power and no extensions of qualified majority voting. Therefore, there will be no referenda and none of the matters which have engaged us through all these days and nights are of any relevance to this Parliament; they apply only in the next Parliament. I cannot think of any previous constitutional Bill which has had that effect. I can think of no precedent for a Bill that is designed solely to influence future Parliaments. Of course, the letter of the doctrine that one Parliament cannot bind its successor will remain the case, because a new Government could repeal the Act. In my contention, however, the spirit of the doctrine would be much better honoured if there were a requirement for an affirmative decision as a first act of each new Parliament that the provisions of this Act should continue.

My second constitutional argument concerns the fact that the referenda called for in the Bill would in every case be asking—whatever the substance of the issue —the question, “Do you wish to overrule your Government and your Parliament?”. Before the referendum stage was reached the Government must by definition be in favour of the measure, because they all require unanimity in Brussels and both Houses of Parliament would have voted for the measure before the referendum question. The result of the referendum, if it was no, would be that an Act of Parliament was thereby revoked. I can think of no precedent for that. It has not applied to any past referendum in this country. In my contention, a referendum called for in this Bill is a direct undercutting of parliamentary sovereignty.

I believe it entirely right that each successive Parliament should be asked whether it wished its sovereignty to be undercut in the way provided for in this Bill, and that is why I favour a sunrise clause. This is my second constitutional argument and I have not mentioned Edmund Burke.

On the foreign policy argument, I do not believe that we shall see many referendums. We know that we shall see none in this Parliament as a result of this Bill, and I do not think that we will see many in future Parliaments either. Some of the circumstances listed in the Bill that would trigger a referendum are wildly implausible. There are some which I cannot see many member states supporting, while there are others which I think it inconceivable that any Government would support. For example, there is a reference to the own resources decision. Unanimity on the own resources decision is absolutely crucial, and I cannot think that any British Government would be stupid enough to give it away, so I do not think we will have a referendum on that. There are other items which are minor matters of detail. No Government are going to be politically naive enough to go to the country on an obscure matter of procedural detail lost in the treaties.

However, as we saw in the debate touched off by the noble Lord, Lord Davies of Stamford, on his Amendment 22A the other night, there are some matters where a change would undoubtedly be in the interests of the UK. The clause he referred to is one where British industry would greatly welcome the introduction of qualified majority voting. But there is no question of any British Government agreeing that the country should be asked, “Do you want to overrule Parliament on whether the list of military goods that are exempt from single market disciplines should be changed by qualified majority voting?”. Any Government who put that question to the country would be laughed to scorn, so none of them will. The British negotiator in Brussels will be unable to put forward the proposal or support it if it is made by anyone else because his Government back home will tell him, “Don’t be silly. That would trigger a referendum”.

Ministers have argued that my fears are exaggerated. They have also argued that the price is worth paying and a bit of rigidity is necessary in the interests of restoring confidence in successive Governments’ handling of European affairs and recreating trust. I do not agree, but they may be right and I accept that only time can tell. My fear is that other member states, seeing how much concrete we have poured over our feet, will be tempted or forced to bypass our perceived rigidity by excluding us from the debate and proceeding by what is known as “enhanced co-operation” or acting outside the treaties without us. I think that we may be at a Messina moment. Again, the Government think that I exaggerate, and they may be right because, as I have said, only time will tell. It took a long time for the penny to drop that we had made a terrible mistake in walking out of the Messina conference.

I accept that the Government are certainly right to say that our exclusion is not an imminent threat. So little is going on that there is not much risk of our excluding ourselves by way of institutional or constitutional developments. But as time passes, the risk that our self-exclusion will be damaging increases. In nature, any organism that does not change and renew itself is by definition dead. The Government are making a virtue of rigidity. The case for flexibility will become more evident over time. New challenges will arise. The European Union will want to change itself in some ways—I cannot predict what they will be; none of us can. We should not rule out the possibility that we might want a change and that, as with the Single European Act, we might on occasion want to say yes.

This debate, I accept, is a bit academic now because of the coalition’s decision that nothing which could trigger a referendum will be done in this Parliament. Since the provisions of the Bill that we are passing are otiose until after the next election, it is an academic issue. But it is an issue that we should come back to after the next election; it is an issue where regular reassessments of the costs and benefits of the position that we have put ourselves in would be appropriate.

That is the national interest case for the amendment. It is the softest conceivable sunset clause, because the subsequent sunrise is so simple to effect. It is appropriate because the Bill is constitutionally innovative, affecting the sovereignty of Parliament in at least two rather serious ways. It would permit regular reassessment of whether rigidity is working or whether the national interest would be better served by avoiding self-exclusion from key debates and future developments. I beg to move.

[Lord Taverne]

My Lords, I want to look, as the noble Lord, Lord Kerr, has done, at the constitutional implications of the Bill, which should concern all Members of the House irrespective of their views on Europe.

The Constitution Committee has recommended a very important principle; namely, that referendums should be confined to changes of fundamental constitutional importance. If that principle is respected and strictly observed, such a referendum may not seriously prejudice parliamentary government as we know it. But this Bill as it stands drives a coach and horses through that principle.

There is no dispute about a referendum on the euro, or on joining a common European army or a common European foreign policy. But how can it be argued that the 56 possible changes that would trigger a referendum under this Bill are fundamentally constitutional? The noble Lord, Lord Howell, has several times argued that these items are all important. Well, they may well be important. Lots of minor changes may be important, but that does not make them fundamental constitutional changes.

If there is a European public prosecutor's office, it will have an important role in dealing with certain kinds of European financial crime. But if we decide to participate in that office, will it fundamentally change the British constitution? Does the noble Lord seriously argue that? Of course it would not. Are changes in the way we vote on the appointment of an Advocate-General or on the protocol on the excessive deficit procedure a fundamental change in the British constitution? Of course they are not.

17:15

In the past, I have congratulated the noble Lord, Lord Howell, on the eloquent and ingenious way in which he has defended the indefensible, but this is Alice in Wonderland stuff. We are assured that there will be no referendum in this Parliament and the noble Lord, Lord Kerr, stated the reason why. But if this Bill passes into law as it stands, the principle of strict limitation on the use of referendums to major constitutional changes will effectively be abandoned because it will have been established in a major Act of Parliament—or, as the noble and learned Lord, Lord Mackay, described it, a singular and central Act of Parliament—that a referendum is justified because an issue is important even if it has nothing to do with the constitution and also because it is alleged, without any reliable evidence, that people want a referendum and the will of the people must prevail.

If importance is the criterion and if what the people want is a criterion, why restrict referendums to the 56 changes to which it applies in this Bill? If you ask people whether they want a voice in National Health Service reform, the answer will be yes, so why not hold a referendum? There could be a referendum even after an Act of Parliament has approved the changes. What about the police reforms or welfare reforms? They are far more important to the ordinary individual than the European public prosecutor's office. Why should the people not have a say? Why not have a referendum on the Government’s policy for deficit reduction, something of basic importance to our welfare? Of course, when you ask people whether they want to have a say, they say yes.

It has been argued time after time—

[Lord Lamont of Lerwick]

Is not one difference between having a referendum on an issue such as the National Health Service or local government reorganisation and a transfer of power and competence from the UK to the EU that in the case of the latter it is almost irreversible? It is extremely difficult to reverse.

[Lord Taverne]

The noble Lord has made a point which on the face of it is plausible. It very much ties up with the argument put by the Front Bench that the case of transfer of power in Europe is different because there is a special problem about British trust in the European Union, which can be restored only by giving people a say. Then by some extraordinary leap of logic, it is suggested that they should have a say on issues such as appointments to the European Court of Justice or the protocol on the excessive deficit procedure, because that would apparently restore trust—because in the pubs they talk of nothing else.

As the noble Lord, Lord Liddle, revealed in Monday's debate, the European Union is not the only body that has lost people's trust. Parliament is distrusted even more than Brussels—by 66 per cent, he revealed, as compared with only 64 per cent in the case of Brussels. The Government are mistrusted by 67 per cent. What is the answer to this mistrust of Parliament and Government? According to the Government's logic, the answer is more and more referendums—more power to the people. Who are the most mistrusted of all by miles, by 82 per cent? The political parties are. What should they do? Obviously, the answer is to promise more and more referendums in their election manifestos because people would have more say and, as Rousseau preached, the will of the people must prevail. I am amazed that speech after speech from Conservative supporters of the Bill echoed the cry of Rousseau; the inspiration of Robespierre and the Committee of Public Safety. They abandoned the philosophy of John Locke, one of the architects of parliamentary government, who also inspired the founders of the American constitution—and, of course, goodbye Edmund Burke.

The noble Lord, Lord Howell, and others have told us that we will not have referendums in this Parliament. If there is a referendum in a future Parliament it will not be a separate referendum on each individual item in the list of the 56 but on a whole batch of changes together. We will be given a choice of saying yes or no, in a single vote, to a licorice allsorts collection, including perhaps the decision on a new Advocate-General, on new tasks relating to prudential supervision by the European Central Bank, on a multiannual financial framework and so forth, as if any such choice of one yes or no vote to cover the lot could possibly make any sense.

The noble Lord, Lord Howell, said that it will be no different from voting for party manifestos in elections with their long list of promises. Personally, I do not subscribe to the general belief in the sanctity of the manifesto mandate. Parties should make fewer promises and grade their commitments at election, with some as aspirations and others as commitments that they can safely undertake irrespective of changed conditions. Manifestos are too detailed and they do not allow for events. As Macmillan said, “Events, dear boy, events”, affect you.

At least manifestos relate to issues with which voters are familiar. Nothing could be more remote from their experience of everyday concerns than most of the items in the list of 56 possible referendums in the Bill. Essentially, the vote at elections is for something that people understand: choosing a new Government. The analogy of the noble Lord, Lord Howell, does not stand up.

The Bill is highly dangerous for two reasons. First, as the noble Lord, Lord Kerr, and others with great experience of European negotiations have argued, it may lead to immobility and sclerosis on many occasions when what we need above all is flexibility. Just as serious—I would argue even more so—are the crucial constitutional issues in the Bill that undermine the system of parliamentary government and are a major move towards government by plebiscite, California-style.

Some of the Bill’s supporters seem positively to welcome this. With others, it seems that the hostility of Eurosceptics to Brussels is so strong that it outweighs concern for parliamentary government, which has served this country so well. I hope that some of them will recognise that our system of parliamentary government matters even more.

[Lord Clinton-Davis]

Why have parliamentarians at all?

[Lord Taverne]

Presumably, not everything will be put to a referendum. As has been said, a future Parliament can repeal the Bill as an Act, but once an Act that gives rights to people to be consulted in a referendum has become entrenched, it is much more difficult to take those rights away than not to have provided the plebiscite in the first place. I echo the question of the noble Lord, Lord Kerr: is there any case in which a Government have said in a Bill, “We are not legislating for this Parliament. The referendum lock will never be triggered in this Parliament. We are legislating not to restrict our own actions but those of a future Parliament”? We are going to restrict the decisions which they might wish to take. I believe that that in itself is, as Professor Vernon Bogdanor, an eminent constitutional expert, has declared, fundamentally unconstitutional.

I add to those who are worried about the coalition agreement that nothing in that is infringed by the amendment. The amendment does not restrict this Parliament, to which the coalition agreement obtains. The coalition agreement is not for future Parliaments. Who knows what the coalition agreement for the next Parliament will be? Who knows who will win the election or who the coalition partners might be? As the amendment says, very well, let the Government have this Bill—probably mainly to appease their Eurosceptics—but for this Parliament only.

[Lord Risby]

My Lords, the whole House will recognise the magnificent work over many years that, as a great public servant, the noble Lord, Lord Kerr, has done for this country but at the heart of the amendment is the fact that he dislikes the Bill in its entirety. It may also be fair to say that his idea of a sunset clause is the very passionate hope that the sun will never rise on it again. I see him smiling.

The whole point about this Bill is that it is meant to provide an enduring framework or umbrella under which future important EU decisions can be made. It comes back to this fundamental question, which is one of trust. People need to feel that they have a longer term guarantee of that sense of ownership of these procedures if we are to give away powers to the European Union. That is simply at the heart of this Bill. A sunset clause would give a limited time frame—providing perhaps for a time when we do not expect a referendum, or taking that right away when there might be a treaty change. That is the possible danger. But I might use the analogy of saying to the noble Lord, “Here is £5, but you can spend it only between four o’clock and six o’clock in the afternoon, otherwise I am going to take it back”. That is the essence of what this is all about.

We all want to build trust, which has been absent in the relationship between the people of Britain, Governments and the European Union. As we have observed already in our debates and discussions, the Laeken treaty, which was meant to rebuild that trust, following through to the Lisbon treaty, has certainly failed to do that, and we are seeing the consequences right across the European Union. We do not want a future Government, who are to re-engage people, to be able to renege on a promise. This Bill does not seek to bind a future Government—that certainly could not be done anyway—but it binds a Government politically to ensure that the people of this country are involved. That is the key and heart of this particular legislation.

A sunset clause can be appropriate in certain circumstances. Most of your Lordships will agree that the Counter-Terrorism Bill was a case in point. There was perhaps, arguably, a temporary situation that had to be dealt with, although I certainly did not agree with it, and then our traditional liberal traditions needed to be returned to in due course after what some people regarded as an exceptional situation. But in practice this amendment would return ministerial discretion to decide whether to revive Part 1, which includes the whole issue of the referendum and parliamentary control provisions. There is a risk that a Government might revive the Bill only if they were confident that there was no chance of treaty change during that Parliament. Of course, should this Bill become an Act of Parliament, which I certainly hope it does, it could be repealed, as the noble Lord said. But it should be repealed on the same mechanism of equal importance as its introduction if a repeal is going to take place. In future, the Government will have to come back and explain themselves about major EU decisions, which is essentially what the Bill demands.

If the noble Lord’s amendment were to improve the Bill, we might consider it in a rather more dispassionate way. But what this is about really is taking the heart out of the Bill—and I am confident that the noble Lord knows that too well.

[Lord Lester of Herne Hill]

My Lords, one benefit of our largely unwritten constitution is the flexibility that our system gives us; one defect is that we do not have a very consistent set of principles to guide us. We tend to be pragmatic. My experience as a blow-in or holiday resident for 38 years in the Republic of Ireland and my experience of their system makes me attracted to one of the arguments in the speech in support of the amendment by the noble Lord, Lord Kerr. It has convinced me that any attempt in this Bill to introduce inflexibility would be a grave mistake. I also think that referenda on complicated and highly technical matters are not a very good idea.

The Irish constitution has been interpreted by a narrow majority of the Supreme Court of Ireland as requiring referenda in quite a number of circumstances. When the treaty of Lisbon was put out for referendum the Irish Government produced an information pack which was completely incomprehensible even to lawyers, since it referred to bits of that treaty by reference to article numbers, paragraphs and specific legislative proposals. They left an information pack in each post office. I took the trouble to try to understand it and, as I say, I found the information given to the citizens of the Irish Republic to be so opaque that I certainly could not understand it.

17:32

Essentially, what this Bill is seeking to do is to treat itself as a constitutional Bill that will pre-empt future Parliaments, unless they exercise their sovereign powers to repeal it. In other words, it seeks to act in a quasi-constitutional way. It will therefore inevitably introduce rigidity where at the moment we have maximum flexibility, and do so in the name of the democratic imperative. I do not find that persuasive when one sees the range of issues that are apparently to be subject to future referenda. That will not help the interests of the United Kingdom in negotiating within the corridors of power in Brussels and it will not enlighten our citizens, were we to have referenda on these subjects. Since it is not proposed that the powers in this Bill should be exercised in the lifetime of this Parliament, I believe that sunset and sunrise are appropriate.

[Lord Lang of Monkton]

My Lords, nobody is better suited than the noble Lord, Lord Kerr, to inject into a debate on a European-related matter a degree of intricacy, complexity and subtlety. He did it with great success in a number of earlier debates on this Bill. However, from my point of view this is not a complex issue. This amendment that we are addressing is not about the substance of the Bill as such but about whether the Bill should contain a sunset clause. That seems a much simpler issue, which can be much more directly addressed. We need to ask only what the objectives of the proponents of this amendment might be and what their motive might be for the future of the Bill.

The Bill is essentially about national sovereignty. It is about the protection of our national political security and about long-term national confidence. It is an attempt to halt the endless drift of sovereignty, salami-sliced over the years, with the erosion of our long-term security and constitutional stability by that drift towards the European Union. All earlier such commitments to restrain that kind of drift seem to have failed. I remember that at one time the watchword was “subsidiarity” and we all cheered subsidiarity around the time of the Maastricht treaty. It was going to make life so much easier and more direct, and stop the endless flow. Of course, it did not and has not and that is one more attempt that has failed.

However, this Bill is for the long term. It is an attempt to stop the rot. No Parliament can bind its successor; that seems to be the simple answer to those who believe that a sunset clause is necessary in the Bill. They say that it undermines our constitutional sovereignty. It does not because Parliament has that degree of sovereignty and could reform, repeal or change this Bill at a later date. Yet in European matters a strand of sovereignty, once lost, tends to prove irrecoverable. Without the certainty of an established position by an Act of Parliament, that trend could resurface and continue. Against that background, a sunset clause would inject uncertainty and short-termism. It would undermine the purpose of the Bill, which is perhaps the objective of the movers of the amendment. This House is here to revise and improve legislation, not to destroy the objective of that legislation. For that reason, the amendment should be opposed.

[Lord Jopling]

My Lords, I follow what my noble friend Lord Lang said, but I come to rather a different conclusion. Some of the speeches that we have heard on the amendment moved by the noble Lord, Lord Kerr, have reverted in some ways to Second Reading speeches. I do not intend to move in that direction. I take a very simple approach to this amendment. I have now worked in this building for almost 47 years. Throughout my entire political life I have had the greatest loathing for referenda in principle. I dislike them intensely. I have always taken the view that the more referenda you have, the more people will say, “If you have these, I don’t see much point in being a Member of either the House of Commons or the House of Lords”. I therefore start with a dislike of referenda.

I have reluctantly supported the Bill in all the Divisions that have taken place on it. However, the point I want to make is the one to which my noble friend Lord Lang has just referred. Very simply, at the beginning of each Parliament, why should that Parliament not decide for itself whether it wants to revive this legislation? The amendment suggests that it should be done in a simple way by order rather than by imposing on Governments all the rigmarole of primary legislation. I cannot see why it would be necessary, given the sunset clause, to impose that on a new Parliament.

As many of my friends on both sides of the House will know, years ago I was a business manager in the other place. Early in a new Parliament, before new Bills are ready, there is plenty of time to set aside a day for deciding whether it is desirable to reactivate the European Union Bill. This would mean that at the beginning of each Parliament, following the result of the general election, a decision could be taken that reflected the views of the public. That is what Parliament should be doing and the way that Members of Parliament should operate. I therefore have every intention of supporting the amendment of the noble Lord, Lord Kerr.

[Lord Richard]

My Lords, the whole Bill has had some sense of unreality about it since it started. The more that one looks at it, the clearer one issue becomes. Whatever we do with the Bill, it will not operate in the lifetime of this Parliament. I have never come across a situation in which, in the first year of a new Government, legislation is introduced that is designed to affect not the current Government but the next one. We have had assurances from the Government that none of the issues that will provoke a referendum will happen in this Parliament because the Government will make sure that they do not. What on earth are we playing at? Shall we seriously sit down and produce the details of a major constitutional change against the background of a Government saying, “Don’t bother about it too much, although it may be a major constitutional change”, which moving from a parliamentary system to one of referenda clearly is? The Government are saying to us all, “It’s not going to happen. It will happen only in the next Parliament, but we shall legislate now so that it is on the statute book when the next Government come in”. Frankly, that is unreal and unfair and should be resisted.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, the noble Lord speaks with great authority and I listen closely to what he says. However, he has asserted several times that the Bill will not operate in this Parliament. It will. A treaty is in the pipeline, with which we will deal next summer—the European stability mechanism treaty. Admittedly, it is exempt under Clause 4(4), but the operation of the Bill applies as much to that treaty change as it may to others. It is not the desire of the coalition or of any member state of the European Union to promote new treaties or rid ourselves of more vetoes. The Bill binds from the moment it goes on the statute book. That is the reality.

[Lord Richard]

Yes, but the Government have assured us time and again during the course of the Bill that there will be no further transfers of powers to Brussels from the United Kingdom and there will be no change in the issues which can be dealt with by majority voting as opposed to those which at present require unanimity. None of that is going to happen in this Parliament, yet the Bill is drawn in such a way that legislation is now being passed in relation to those matters. I do not think that makes any sense at all. If this is a parliamentary system of government, as it is supposed to be, surely it is for the next Parliament to decide whether it wishes this structure to continue. If we go on with this legislation, it seems to me only right that we should have some kind of sunset clause which demands that the next Government, when they come in, have the opportunity to decide whether they wish to go on with this. In those circumstances, I strongly support the amendment.

[Baroness Falkner of Margravine]

My Lords, after three long months we are still divided on the single unresolved question of this Bill—whether the proposals here will impact negatively on the UK’s ability to pursue its national interest in negotiations in the EU and whether by asking the people of this country to sanction new changes in the EU we will garner greater popular support for those changes here at home. It is undoubtedly true that the Bill constitutes a significant change to the way we do business in Brussels. What is unclear, however, is whether it will strengthen our hand in negotiations in some cases, as our partners will know that the bar they have to cross over our red lines is significantly higher, or whether, because they know of the high bar, they will find other ways to circumvent our hurdles. Both may well happen, depending on the circumstances.

I wish to set out the reasons why we should oppose Amendment 35 while holding those noble Lords who have attached their names to it in great respect. Amendment 35 seeks to let the Bill expire at the end of this Parliament—that is, in 2015. In subsequent Parliaments, if the Government of the day wish, they can revive the Bill through affirmative resolution and it will sunset at the end of that subsequent Parliament, to be revived again in the next one, and so on. First and foremost, the amendment proposes a series of sunrises and sunsets ad infinitum. If the concern of noble Lords in tabling it is to reduce uncertainty about the UK’s negotiating position, I assure them that it would do the very opposite for those periods when the Bill has expired but has not yet been renewed. Moreover, it goes against the grain of building trust between the people and politicians as the question before every single general election will revolve around whether or not we are to revive the Bill. Rather than increasing trust and confidence in the ability of UK Ministers to bat for Britain, it will raise endless questions before elections about the composition of the team, the batting order and, indeed, about the implications of who might win the toss.

I turn to the period between sunset and sunrise—the hours of darkness, as we normally know them. It might take more than three months to revive the Bill. If we take the previous Parliament as an example, I ask noble Lords to imagine that the Act is already in place and this amendment forms part of it. The previous Parliament was dissolved on 12 April 2010, the general election occurred on 6 May and the Queen’s Speech was on 25 May. Subsection (4) of the amendment states that the revival must take the form of a statutory instrument using affirmative resolution with approval in both Houses of Parliament. Last year the Joint Committee on Statutory Instruments first sat after the election on 23 June and would then have considered orders, including, let us imagine, those to renew this Act, laid them on the Order Paper, and approval Motions would have been timetabled in both Houses, would possibly have been defeated, and then possibly resubmitted.

Lest noble Lords lose the drift of my remarks, I am trying to illustrate that between the sunset and sunrise, if the Bill had been in place, a period of potentially three months or more would have passed. If the Summer Recess had come in the way, the period would have been possibly five or six months. The Minister in Brussels who would supposedly have been negotiating on our behalf would effectively have been operating without the security of knowing the legal position back home on the requirements for the agreement.

I know that noble Lords who support the amendment would say that the fallback position during that period would have been the European Union (Amendment) Act 2008. However, what are our European partners meant to do—carry around several UK Acts of Parliament to see which one applies at a particular time of the electoral cycle? At the beginning of every Parliament, parliamentary time would need to be expended in reviving the Bill. It would make our negotiations in Brussels even more cumbersome, because during that period Ministers would be in a state of flux, not knowing whether they were to operate under one system or another.

Finally, I turn to the point made by the noble Lords, Lord Kerr and Lord Richard, and others, that the Bill is intended solely to influence future Parliaments. It is not so designed. While it is true that the coalition agreement does not envisage handing over powers and competences during this Parliament, the coalition agreement is not the law of the land today. It is this Bill when it becomes an Act of Parliament that will enshrine those provisions in law. I urge noble Lords to oppose the amendment.

17:45

[Lord Brittan of Spennithorne]

My Lords, I support the amendment. I start by saying that I am an unashamed opponent of referenda and always have been. It is not therefore surprising that anything that limits the operation of referenda inherently attracts me, as the amendment does. It is entirely reasonable that this piece of legislation, if it is to be passed, should be regarded as being wholly exceptional—which it is constitutionally—because it extends the range of obligatory referenda on a massive scale and fundamentally alters the balance of the constitution in that important respect. The Bill should be regarded, if it has to be passed, as a provisional experiment. I would regard it as a rather dangerous experiment that is subversive of the normal principles of parliamentary government.

If it is to be regarded as a dangerous experiment that political exigencies require—although I do not share that view—it is perfectly reasonable that one should mitigate its consequences by providing within the Bill for a rapid and effective procedure for terminating the mischief as soon as possible. It is for that reason that I support the amendment.

[Lord Hamilton of Epsom]

My noble friend says that he is fundamentally against referenda. Does that mean he is against the referendum that confirmed our membership of the European Union? Should there also be no referendum if we were to join the single currency?

[Lord Brittan of Spennithorne]

I am fundamentally against referenda. I would not have favoured the holding of that referendum, but that does not in any way mean that I do not accept its result, especially as it was one that I politically favoured.

[Lord Lamont of Lerwick]

My Lords, when the noble Lord, Lord Kerr, spoke in the very first debate on the first amendment in Committee—or perhaps it was on Second Reading—he said that he was like a minor character in Shakespeare referred to in Act 1, Scene 1, and never heard of again. It has, however, been to the benefit of the entire House and the Committee that instead he has been bestride the stage like a colossus. Great as my respect for the noble Lord is, I do not feel that a sunset clause on this Bill is any more appropriate than a sunset clause on a local government reorganisation, a National Health Service reorganisation, or anything else.

However, there has always been an argument for attaching a sunset clause or a sunset condition to some EU legislation with great advantage, because so much EU legislation is irreversible. That is a point that I have made before, but I repeat it simply because I think that that is the problem of connection between the public, Parliament and the EU, and one of the reasons why there is scepticism and mistrust about the European Union.

[Lord Davies of Stamford]

Is the great distinction about referenda which the noble Lord is making—he has made it twice this afternoon—whether a decision once taken becomes irreversible, and that in that category there should be a referendum; and that in other categories there should not? If so, why will there not be a referendum on reform of the House of Lords? Surely that will in practice be an irreversible decision. Once you have a democratically elected legislative Chamber, you can hardly go back on that.

[Lord Lamont of Lerwick]

I have not heard that there is not going to be a referendum on legislation for the House of Lords; I have heard many people speculating that amendments may be moved. We shall see, and I shall see how I vote on the interesting suggestion made by the noble Lord.

It has been said that this debate has at times been something of a Second Reading debate on many of the amendments. That is because the Bill has been misrepresented in several of the debates in an exaggerated way. The noble Lord, Lord Howell, has made it clear again and again that we are not going to get a plethora of referendums, for several reasons. First, changes in competences and powers tend to come in packages, in treaties. Secondly, we have been assured many times that we will not have more great treaties. The fact that certain vetoes and certain competences remain after we have had Lisbon, Nice and Maastricht shows that there are very good reasons why national Governments wish to retain them. No Government are going to invest a huge amount of political capital in pursuing some relatively minor matter. That is not how these things operate; they tend to come in packages.

People talk about these issues being trivial. We are talking about competences and powers. We are talking about vetoes, for example. The noble Lord, Lord Kerr, referred to the amendment very well proposed last week by the noble Lord, Lord Davies—I think it was Amendment 22A—about exempting defence procurement from the requirements of the internal market. He said that that is something that could advantage the country, and surely we ought to have the flexibility to move to QMV. Actually, I think it is important to be able to buy certain types of defence equipment and certain weapons, or produce them where you want to, and not have them subject to the full rigour of the market. In the previous Government, Des Browne himself—now the noble Lord, Lord Browne of Ladyton—said that he regarded that as a vital power to be retained by the British Government. Judging by the previous Government and what the former Secretary of State said, that is an extremely important power for this country to retain.

The noble Lord said the Bill was otiose because the Government were not intending to hold referenda in this Parliament. As the noble Lord, Lord Howell, said, the Bill will apply in this Parliament. It is not otiose any more than the Act giving effect to the Maastricht treaty. It had an opt-in for Britain to opt into the euro, but it was made very clear that we were not going to opt into the euro in the next Parliament. That did not make it otiose.

Then we have heard the argument that we are legislating for future Parliaments, but of course it is perfectly open to any future Government to repeal the Bill. With great respect to my noble friend Lord Jopling, we would be getting the worst of all worlds if we enacted the Bill but then said that the whole floodgates could be opened again without any specific intention at the beginning of each Parliament. I can think of nothing that would inflame public opinion more and get the tabloid press—about which we have heard a lot in this debate—going again than if, without any specific intention, a Government decided at the beginning of each Parliament to open the floodgates to the reversal of this legislation. We are told that it will lead to inflexibility in negotiations. However, other countries have procedures that take a long time and they have certain provisions on which they have to hold referenda. We have seen how it takes time for some of these treaties to be legislated for in other countries. Therefore, I do not think that the position of Britain’s negotiators would be any different from that of other countries.

What has been confusing in these debates is that this legislation is about competence and powers, whereas people try to make it about issues and policies. Nice, Lisbon and Maastricht have all given a tremendous amount of power and transferred sovereignty to the European Union. What in terms of power and competence do the Opposition and those opposed to the Bill think the European Union needs? What is the issue? What is the European Union not able to deal with at the moment? We have had many changes in recent years. The United States constitution has had only 27 amendments since coming into existence but we produce endless changes. The European Charter of Fundamental Rights was written in very dense language and was much longer than the Universal Declaration of Human Rights or the charter of the United Nations.

The noble Lords, Lord Kerr and Lord Hannay, have certainly enlightened our debates with their enormous expertise and very abstruse knowledge of difficult and complex issues. However, when I listened to them I was reminded of what Winston Churchill said when he became Chancellor of the Exchequer. He came out of the Treasury and said, “These chaps speak Persian. I prefer generals and admirals”. Of course, the contributions of the noble Lords, Lord Hannay and Lord Kerr, have been extremely important and enlightening in these debates, but I think that with some of these abstruse issues—the language used and so on—there is a real problem of connection between ordinary people and the European Union.

What has not been recognised enough by opponents of the Bill is the tremendous crisis that is taking place in Europe over the European Union. We have seen dramatic changes in public opinion on European integration in countries such as Finland. However, I would particularly single out what has happened in Holland. Throughout my life, Holland has been the most pro EU-integrationist country in Europe; now, it is the most obstructionist. It is strongly opposed to the bailouts of Greece, Ireland and Portugal and it wants to dismantle the Schengen provisions as well. The Bill draws a red line to say that in this Parliament, and beyond if this Government are re-elected, there will not be a transfer of powers. It seems to me to be sensible legislation and we should be determined to carry it forward. I think that the red lines we are drawing will go some way to restore some trust in the European Union.

[Lord Grenfell]

My Lords, after so many Second Reading speeches at a Report stage, it may well be sunset before we reach a decision on this amendment. I have only one thing to say following the comments of the noble Lord, Lord Lamont. My experience in this place has been that your Lordships’ House has always been quite reluctant to call for sunset clauses—we do not do so lightly. They are a very important instrument and one has to treat them with great respect and care. The noble Lord, Lord Lamont, asked: if we have one on this Bill, why not have one on a number of other pieces of domestic legislation? I agree with him. I would not want to see a sunset clause on those pieces of legislation that he mentioned. However, there is a big difference between those and this piece of legislation.

This Bill has huge constitutional implications, but it is a step in the dark at the moment for us because we do not quite know what they will be. As it is of such huge constitutional importance, I feel that there should be the safeguard of a sunset clause because the next Government will be in an experimental stage of having to see how this legislation will be implemented. I do not think you can group this piece of legislation with other kinds of legislation and say that if you want a sunset clause on this, you should have it on the rest. This is a special case. It needs to have a sunset clause in order to be sure that when we step out into the darkness—it will be dark when the legislation first starts to have an impact—we can, if necessary, draw back from the brink.

18:00

[Lord Waddington]

My Lords, as usual, my noble friend Lady Falkner hit the nail absolutely on the head. One effect of the amendment would be that at every general election all parties would be asked to pledge themselves to revive the Act. That is the effect of this amendment. They will so pledge, at their peril, because, make no mistake about it, this Bill will be popular with the public as the public want more say over what is happening in Europe. The public are fed up with Parliament ceding more and more powers to Europe without any consent from the people whatever.

The only difficulty is that there will be a period at the beginning of each Parliament when the Act will not operate. That could cause difficulties and it will certainly not increase confidence in British Governments’ handling of European matters. I would have thought that that was one of the most important matters with which we are concerned in this legislation. We want to increase confidence and not destroy it. I cannot imagine anything more likely to destroy confidence than having a period at the beginning of each Parliament when the safeguard for the British people did not operate. In practice, of course, it will not happen because every single party, as a matter of self-preservation, will say, “Of course we will renew the Act”.

[Baroness Williams of Crosby]

My Lords, I would like to follow the noble Lord, Lord Grenfell, because he has been correct in what he indicated. In debates in this House, we have had a great deal of speculation because we live in a world where we cannot be sure what the future will look like. Increasingly, that is the kind of world in which we live. The noble Lord, Lord Grenfell, who has profound experience, having been, for many years, the chairman of the European scrutiny committee, is absolutely correct in what he says. We are passing legislation which is likely to be tested by coming events in future years and yet we are doing it without giving ourselves any provision for insisting on a review of what we do over the next decade or so.

I shall mention one or two of the speculations that we have discussed in these debates and not agreed upon. One is the proposition which has been advanced on several occasions by the noble Lords, Lord Kerr and Lord Hannay, which is about the possibility that our representatives in Brussels ministerial meetings will find it extremely difficult to support even those things that they profoundly and sincerely believe are in the British national interest because of a fear of setting off a referendum. The noble Lord, Lord Kerr, may be right in that and he may be wrong, but the only way to find that out is by experience over the next few years.

Secondly, there has been a great deal of speculation about whether there will be major new issues that might require an amendment to the treaties. Curiously, the noble Lord, Lord Howell of Guildford, hinted at one such when he talked about the possible major revisions of the European Union Stability Pact. Of course, that applies only to eurozone countries, but anyone who believes that it will have no implications for the United Kingdom must be living in a world a very long way away from the global financial world of which we are a part today.

We are talking about speculations, but that does not mean that we should not pass Acts of Parliament; it means that the case for looking at them and requiring them to be looked at is extraordinarily strong, and stronger than the case for almost any other kind of legislation that one can think of. I differ a little from the noble Lord, Lord Lamont, much as I respect him, because I can think of quite a few bits of legislation, with domestic implications, that would have gained from a sunset clause. There are one or two pieces of legislation all of us today would be only too happy to have seen off the statute book if there had been an opportunity to revisit them, which there so rarely is.

My next point is with regard to the coalition agreement. On this, I address specifically my friends in the Liberal Democrat and Conservative parties. The coalition agreement, in its wisdom, made it absolutely clear that we should be willing to accept a referendum lock on major amendments to treaties. That is what it says. The major amendments to treaties that we talked about in these meetings, and here in debates in the House of Lords, have ranged from changes to the Schengen agreement, changes to the original euro agreement, and changes that might introduce a common foreign policy or a common defence policy. I freely admit that in this Chamber, we are all agreed—I congratulate the Government on persuading us on this—that there should indeed be a referendum lock on this limited number of crucial issues.

It is also clear that many Members of this Chamber are profoundly concerned, as my noble friend, Lord Taverne, pointed out, about the thought that that group of very tightly disciplined and described referenda might drift into a general practice of referenda of a kind that will destroy parliamentary government; to put it in a non-abstruse phrase: adding a kind of Berlusconi sauce to the solid pasta of British parliamentary practice. I, for one, would be most reluctant to go along that track. My noble friend Lady Falkner is quite right to draw our attention to that, but at no point does the coalition agreement come to terms with the idea that now we will be imposing every change in the passerelles to a referendum—not just an Act of Parliament but a referendum. No one in the coalition is obliged to support that because it is not part of what was agreed in that original agreement.

My third and final point is precisely the one made by the noble Lord, Lord Waddington, and my noble friend Lady Falkner and I take exactly the opposite view. It seems to me that one of the great advantages of proposing that there should be a review at the beginning of each Parliament is exactly that that will drive the debate back in the general election itself. What more democratic a structure could one choose to find, one where people would be likely to vote, likely to show an interest, likely to debate the issues before them in television, radio and in the street, than a general election? There is the fact that we would have to agree this legislation again at the beginning of each Parliament, in its very simple and short way, as has been pointed out—the statutory instrument agreed by both Houses. It would take no more than 24 hours, if one wanted to do it that way. The essential point is that no more democratic a process could be found than a general election, in which we should reach a decision on whether we want to continue with this legislation. That is far better than suddenly plucking a referendum out of the air at some point in the Parliament, when most people would be interested in other things and its salience would be low.

So on the grounds of the speculative basis on which we are passing this legislation, of extension of referenda far beyond what our Parliament would want to see and of forcing the general elections to take on a major debate of our relationship with Europe and all the trust that would flow from an election result, I believe that the case for a sunrise and sunshine amendment—I say sunshine deliberately—could not be better argued. I strongly support the amendment in the name of the noble Lord, Lord Kerr, and his colleagues.

[Lord Williamson of Horton]

My Lords, we have had quite a bit of experience recently of sunset clauses, or proposals for sunset clauses—we may keep that to the back of our minds. This amendment would bring Part 1 and Schedule 1 to the Bill, if enacted, to an end at the end of this Parliament. That gives the Secretary of State the power to provide by order, subject to approval of both Houses of Parliament, that the legislation is revived for a further parliamentary period—and so on until the end of time. I did not use the phrase of the noble Baroness, Lady Falkner, about an endless series of sunsets and sunrises because I reserve that to my wishes for the next 20 years for my personal life.

What is the purpose of the amendment? It is to provide an opportunity to monitor the legislation, to see how it is operated, if at all, and to see public reaction, in particular whether it has succeeded in its principal objective of improving the connection between the public and the work of the European Union. I would be very interested in that. If this legislation goes through, we would like to see an improvement in that connection and the legislation is directed to do that—let us see if it has made progress in that area. If the legislation is judged to have been successful, it is of course a relatively simple matter to continue it for a further period.

This clause does seem appropriate in this Bill, which is a constitutional innovation, switching from Parliament to national referendums the decisions on a list of issues, and for that reason I support Amendment 35.

[Lord Pearson of Rannoch]

My Lords, I am afraid that this amendment, if accepted, will be seen by the British people as an unambiguous attempt to wreck the Bill, and so I can but advise your Lordships not to accept it. Not for the first time I must ask your Lordships to see and accept that, uniquely on this issue of our EU membership, your Lordships’ House is strongly and increasingly out of tune with public opinion. We have even managed to debate for many days a European Union Bill which does not address the two key issues about our membership: the disaster which is the euro and the fact that we avoided it, and whether we want to stay in the European Union at all.

I congratulate the Government and the Foreign Office on managing that feat, but it does not make your Lordships’ House any more relevant or popular to the people we are supposed to serve. The British people are not stupid. They are in fact much cleverer, much more patriotic and altogether nobler than their political class. They also work in the real world to earn the salaries to pay the taxes to keep us, the political class, afloat in the style to which we have become accustomed.

Of course the political class does not like referendums. That has been very clearly set out in our debates, and today by the noble Lords, Lord Deben and Lord Brittan, and by those who have tabled and support this amendment. However, the British people are showing strong signs of wanting more referendums, and on this issue all the latest polls show that something like 84 per cent of the British people want a referendum on our EU membership—in or out—let alone the comparatively minor issues covered by this Bill.

The British people understand that what is happening to the people of Greece, Portugal, Spain, Ireland and other countries is entirely the fault of the discredited project of undemocratic European integration with its attendant euro. It is not just in this country that the public are moving against EU membership and their political class—and, therefore, I might point out, this amendment. I do not suppose your Lordships have noticed the very recent opinion poll in Norway. Norway has moved a long way: according to this poll, 66 per cent are now against EU membership, with only 26 per cent in favour. Opposition to EU membership is highest among people under the age of 30, with 77 per cent against and only 15 per cent in favour. As the noble Lord, Lord Lamont, has reminded us, opinion is moving strongly in France, Germany, Finland, Holland, Austria—in fact, hardly anywhere in Europe is EU membership still popular.

18:15

[Lord Hannay of Chiswick]

Would the noble Lord agree that the whole tenor of his speech—it is something like the sixth time I have heard it, during Second Reading, Committee and Report—is that he supports the Bill because he believes it is a step on the way to us getting out of the Community? That is why he supports it, and I hope that anyone who votes for it understands that.

[Lord Pearson of Rannoch]

My Lords, as I said on Second Reading, I think that this Bill is a “thus far and no further” Bill, and therefore it is to be welcomed. However, it is also a “shutting the stable door” Bill, because the European Union already has all the powers it needs to continue down its very unfortunate path towards complete integration, in the teeth of the growing opposition of the people of Europe.

[Lord Flight]

May I suggest to the noble Lord that perhaps the reason why the noble Lord, Lord Kerr, opposes the Bill is that it represents a potential barrier on the movement towards complete European integration which is his objective?

[Lord Pearson of Rannoch]

I am very grateful to the noble Lord—my noble friend, if I may refer to him as such—for pointing that out, and he pointed it out much better than I did. That is true: the movers of this amendment and the people who oppose this Bill do actually want an integrated superstate of Europe run entirely by the political class, having destroyed the democracies of Europe—which was always the big idea behind the project.

The movers of this amendment and those who will support it are attempting to swim against the tide of opinion here and in Europe. That tide in the end will prove irresistible, so I oppose this attempt to do so.

[Lord Dobbs]

I beg the noble Lord’s pardon but some of us still have something to say on this. I hope that he will indulge us. You were talking about sunsets and sunset of course is, as we have heard, the time before darkness descends, a time when hobgoblins and wicked elves come out to play—or stand up at the Dispatch Box. On Monday the noble Lord, Lord Liddle, in one of his passionate interventions, suggested that:

“We are not wrecking this Bill; we are trying to improve it”.—[Official Report, 13/06/11; col. 582.]

I trust that he will not be standing up this evening to say the same thing or, if he does, I hope he has a different scriptwriter. This amendment is clearly designed to wreck this Bill, to cast it into darkness.

A sunset clause is a wholly inappropriate tool for such a mighty matter. It is like promising to love a woman faithfully for this night and for all nights, but then wanting a review after the weekend. I have never found that much of a basis for a healthy romantic relationship. This amendment once again is an attempt to duck and dodge the will of the people. That is not much of a basis for a healthy political relationship, either.

It has become clear in these debates that the usual suspects have little trust in the people. Indeed, the noble Lord, Lord Hannay, as good as admitted it just a moment ago. But now they go even further—they do not want to trust this Mother of Parliaments either. They want to bind her hands, throw her into the sea, watch her float off into the sunset and disappear. They have made great cause in these debates around the proposition that Parliament must decide, and I must admit that I have some sympathy with their position. They have argued their case with passion, but they have failed to argue it with consistency. It is clear that they are promoting the sunset clause because they do not want this Parliament to decide, any more than they want the people to decide.

The amendment is not only bizarre but unnecessary. There is an alternative, of course, which would cover every one of the arguments put forward by those supporting it. It is simple: campaign at the next election to repeal the Act, campaign on a platform that the powers given to the people should be taken back, fight on that basis, win the election and do it. Then we could all go back to counting flocks of phantom sheep and dumping tens of thousands of tonnes of fish back into the sea—problem solved. To achieve that, they do not have to persuade this Parliament but simply their own party. However, I sense that that will not happen, and I suspect that we all know why. Even if they managed to persuade their party, they fear that they would never be able to persuade the people.

I am surprised that the noble Lord, Lord Pearson, objects to the amendment. If it is passed, it will turn our general elections on their head. It will drench them in one issue: do you want to continue to have your say on Europe or not? I know that the noble Lord is a modest and moderate man, but I cannot understand why he is not jumping to his feet in excitement at the prospect. It would hand him exactly the election tool that he wants.

[Lord Pearson of Rannoch]

The noble Lord, Lord Pearson, is also a bear of remarkably small brain. The noble Lord, Lord Dobbs, has made a very good point, and I may well vote in favour of the amendment.

[Lord Dobbs]

I ask the noble Lord to consider carefully at this point. A sunset clause is like a great sulk. It is like retiring to our castles after the battle is lost and pulling up the drawbridge. The world is not like that any more—although, gazing along these Benches, I see that there may be one or two noble exceptions with castles and drawbridges. Our duty today in this place is clear. We are here not to indulge our own interests, but to serve the people. I mentioned that great film “Casablanca” on Monday. There comes a point in the film, after the usual suspects have been rounded up—it is the most important point of the film—and as the plane is waiting to take off, when Bogart turns to Bergman and reminds her that there is a bigger game to play that overrides their own interests, and that if they fail to recognise that, they will come to regret it: maybe not today, maybe not tomorrow, but soon and for the rest of their lives. There is a higher cause here—a bigger game to play. It is the future of the European Union. It is in question as never before and only the people can rescue that future. That is what this Bill is all about: giving the EU back to the people.

It is also much more than that, for in a sense it is not about Europe but about us and about this country. It is not about little England but about the great British people—about how we govern ourselves and how we show the people, at last, that we give a damn about what they think. The principle of placing our trust in the people is something that is eternal and indivisible. It is not just for a few days or for a single Parliament—and most certainly not for the convenience of politicians who have failed to carry the argument. We have a duty to listen to ordinary men and women of great common sense. If we do not—if we refuse—we deserve to be thrown on that rubbish tip that Mr Clegg is even now preparing for us.

[Lord Empey]

My Lords, I was amazed that the name of the noble Lord, Lord Pearson, is not on the amendment. I was also surprised at the remarks of the noble Baroness, Lady Williams, who is well known throughout the country as a very wise head. However, the effect of the amendment, and the idea of a sunset clause, would be to give those who want to sever any relationship between this country and the European Union an opportunity at least every five years to have a platform with a specific objective in mind and to achieve it. That would be unwise. I am not sure whether anybody in the Chamber has not made up their mind on the Bill, but I will assume that one or two noble Lords are subject to persuasion. There could be nothing less attractive for somebody who believes in European Union than putting in a sunset clause. It would turn every election into a referendum on the European Union. Nothing would do more damage to the European cause because everybody would come out of the woodwork to oppose it and to run single-issue campaigns. We know that they work, because campaigners for hospitals, and environmental campaigners, have won seats in different countries. Single-issue elections are the most dangerous type, and I fear that we would open up a Pandora's box. Those who passionately oppose the Bill are shooting themselves in the foot with this amendment.

The noble Lord, Lord Lester of Herne Hill, made the point that he had seen the Irish constitution in action. The Irish are very proud of their constitution. The Irish Government accepted, after the first referendum on the Lisbon treaty, that they had provided an overcomplicated form of information to the people, and subsequently corrected this at the next referendum. Nevertheless, people are still passionately in favour of their constitutional rights. If one goes to anybody in the Republic and says, “This is too complicated—the Government put forward all this stuff and we could not understand it because it referred to treaties and articles”, and then asks them whether they want to retain the right to have the final say, they will say yes. Even though there is a complication in a referendum on a single issue—it can be very difficult—the people in the Republic passionately believe in their right to choose. You would not find anybody in the political establishment in Dublin who would challenge that.

[Lord Lester of Herne Hill]

The noble Lord has the advantage of coming from the northern part of the island of Ireland. As I said, I have the advantage of having lived in the southern part for many years as a blow-in. Is he aware of the fact that the reason that the constitution has been interpreted to apply so indiscriminately to so many referenda is not that the Irish people decided that but that a very narrow majority of the Supreme Court of Ireland so decided, against the powerful dissents of others? In other words, it was a curious judicial decision and not a popular one.

[Lord Empey]

I take the point that the noble Lord makes. However, he will also know that if there was any groundswell of opinion to change the constitution, proposals would come forward in the Dàil for that to occur. I know of no current or recent Member of that Parliament who would stand up on a platform to advocate it. While the noble Lord is no doubt correct in his judicial interpretation, there is no support in the Republic for removing the right of the Irish people to make decisions on these issues.

The underlying danger of the proposed new clause goes back to the reason why we have the Bill in the first place. It is the “we know best” syndrome: in other words, in both Houses of Parliament, we know best. In many cases that may be true: I believe in parliamentary democracy. However, the reason that we are in this position is that the usage of that right to represent the people has resulted over time in a breakdown in their confidence in the decisions of Parliament on this subject. That is why, as I understand it, the Government are putting forward a proposal which they hope over time will bring a resurgence in that confidence. Noble Lords have suggested reviews. Perhaps, in time, if that confidence is restored, such measures may no longer be required. It is a response to a particular set of circumstances that we face today.

I do not wish to put words into the mouth of the noble Lord, Lord Kerr, or to apply a motive to what he said or to his proposal, but this is effectively a kill-the-Bill amendment. The Bill would be better not passed than passed with this clause in it. What we are actually saying to the public is, nod-nod, wink-wink, “We’ve found a way round this. By the time we get to the next general election, we’ll be able to tear it up again and go back to our old ways”. That would further undermine people’s confidence that we are listening to them and taking this issue seriously. Therefore, I see this as a kill-the-Bill amendment, and I sincerely hope that we do not include it because it will affect every subsequent election. We would open Pandora’s Box. Let us suppose that Brussels, as it is perfectly capable of doing, comes out with a proposal a few weeks before the election requiring us to have straight bananas or something stupid. It could turn the election into a referendum on Europe. Everybody who believes in the European Union, and many here are clearly passionate about it, would not be serving their cause. I hope under these circumstances we will vote not content on this amendment.

18:36

[Lord Low of Dalston]

I have not taken part in these debates, which have been going on for a considerable time, but I have been listening with great interest to the speeches that have been made in this debate. The noble Lord made a very seductive argument against this amendment when he said that if we were to pass it, it would make continued membership of the European Union a cause célèbre at every general election. I wonder whether that is right. There was a proposal to bring in legislation of this kind in the Conservative Party’s manifesto at the last general election, but not, I think, in the manifesto of the Liberal Democrats, but I am not aware that membership of the European Union was a major topic during that election. I do not think it featured in any of the television debates. Having initially thought that this was a very seductive argument against this amendment, on thinking it over, I am not quite so sure that it is.

[Lord Empey]

I thank the noble Lord for his comments. While it was not an issue of huge significance at the last general election, if you put this into the statute book, at the beginning of every Parliament, this issue would be one of the first items on the agenda. It would have to be, otherwise, as the noble Baroness, Lady Falkner, said, nobody in Europe would know where the United Kingdom stood. If you put it into law that this must happen at the very start of every Parliament, I assure the noble Lord that it will become an issue. If that is so, why should we take the risk, even if he is right and I am wrong, because the next Parliament can do what it likes anyway?

[Lord Dykes]

It is unusual, and I find it surprising, but the noble Lord, Lord Empey, appears to have misunderstood completely the purpose of this amendment. I hope that Members of this House who are listening to this debate or who are outside but will come in later on will reflect carefully on the reality of this amendment. This new clause does not in any way damage any other part of the Bill. Whatever one’s views about the Bill—and I do not much like it—there is no damage to be done intrinsically and internally to the text of the Bill. The only differences are the three government defeats so far and what may happen with this amendment when the vote is called. That is all. The rest of the Bill goes through intact. That is part of the Government’s programme, and no one can gainsay that. The noble Lord is raising fears that should not exist in anybody’s mind. I hope he will reconsider because it is very important that the review process that my noble friend Lady Williams referred to, in such a step in the dark with this legislation, is essential at the end of this coalition period to start with and later on too.

[Viscount Trenchard]

My Lords, I tend to agree with the noble Lord, Lord Empey, that this is really a kill-the-Bill amendment. I listened with great interest to the very erudite and eloquent arguments put forward by the noble Lord, Lord Kerr, and others, but if you go out in the street tonight and ask anybody you come across in a pub or a square whether they think that the European Union Bill, which seeks to prevent Parliament passing further powers to the European Union without your consent, is otiose, I think you will find that people’s enthusiasm for this Bill will be further increased.

Amendments to introduce sunset clauses were debated at length in Committee, and I regret that I have heard nothing new today to persuade me that this Bill would gain in any way from the addition of one. It is clear that those who like the Bill do not want a sunset clause and that those who do not like it do. As my noble friends Lord Risby, Lord Lamont and others have explained, there certainly are occasions when the addition of a sunset clause is logical and sensible. Even though another place did not agree, I believe that your Lordships' House was right in trying to amend the Prevention of Terrorism Bill in 2004 and 2005 to include a sunset clause. Similarly, the Anti-terrorism, Crime and Security Act 2001, as enacted, contained a sunset clause. It is surely reasonable to include a sunset clause when a particular set of circumstances, which requires a particular measure to be enacted, prevails, but it is considered that that set of circumstances is likely to change in the foreseeable future. Similarly, it is arguably sensible to include a sunset clause when there is doubt about how an Act will work in practice. In such a case, it would be reassuring to a sceptical public to have a sunset clause that would act as a guarantee that Parliament would have to revisit the question within a specific period of time. However, I do not think such circumstances apply in this case because the purpose of the Bill is to draw a line in the sand and make it clear to the people that the Government will stop doing what they said over a period of years they would not do, but nevertheless continued to do, which is to pass powers and competences to the European institutions without seeking the people’s consent in a referendum. The public do not think that it is likely that this situation will change. Rather, the tendency for this Parliament to surrender powers to Europe is thought by many to be likely to increase and escalate.

Noble Lords should be aware that more than 30 directives covering financial services activities are currently being drafted in Brussels. This morning, I was visited by representatives of a trade association representing a section of the asset-management industry who were extremely concerned about this trend. It is absolutely right that we should work closely and collaboratively with other EU member states on improving the structural framework of the financial services industry, but it is equally important that we work equally closely and collaboratively on those matters with other international partners, especially the United States, Japan, China, Singapore and other countries that have significant financial markets. I believe this is necessary to stop the drift towards a centralised European state. Furthermore, I believe that it will still be necessary to stop that drift in three years, five years or 10 years. There is no reason to include a sunset clause unless you are one of those who honestly and sincerely believe that a federal state is our destiny.

I accept that there are noble Lords who believe that that is the right road for us to follow but I believe that the vast majority of the British people absolutely do not want that. I am delighted that this Government have had the courage to stand up and say that they will not let it happen. Noble Lords who support the amendment have argued that the Bill attacks parliamentary sovereignty. I believe that it does the reverse by preventing the Government permanently surrendering parliamentary sovereignty. If a future Government wish to remove such a safeguard, they will be free to do so—God forbid—but there is no need for this amendment because they will be free to do so by repealing the Act.

[Baroness Nicholson of Winterbourne]

I fully agree with the noble Viscount, Lord Trenchard. I have listened carefully to all the points that eminent legal and other brains have put forward, including those from no less than former high eminences from the FCO. But I am a former Member of the other place and I prefer to put my confidence in the House of Commons European Scrutiny Committee of which I used to be a member. The committee suggests:

“The arguments over binding future Parliaments are interesting and the debate will continue among constitutional lawyers and experts. But, in our view, as the UK does not have a single codified constitutional document from which legislative power is derived, there are no unambiguously constitutional ‘higher’ laws. All Parliaments legislate for the future. Laws passed by one Parliament do not contain a sunset clause at the Dissolution. The real point is whether a government can, in law, make it difficult for a future Parliament to amend or repeal the legislation it has passed; in our view it cannot. Our conclusion therefore is straightforward—that an Act of Parliament applies until it is repealed”.

As Professor Hartley commented to the committee:

“[T]he Bill, assuming it becomes law, will be an Act of Parliament. We know that Parliament cannot bind future Parliaments, so a future Parliament could always change it. It could repeal it—totally repeal it—or amend it, or repeal it in part. I don't think that this Bill limits the powers of Parliament, any more than the European Communities Act 1972 does—the original one”.

I agree with that profoundly. I also welcome and support the coalition Government’s commitment to the use of a sunset clause in certain types of regulation—secondary legislation. It is a very good idea because it gives greater scrutiny of secondary legislation, which so often has just flowed through and frustrated many of us who wish that it did not. I congratulate the Government on their Sunsetting Regulations: Guidance, which was published in April 2010. The core purpose of this Bill is greater scrutiny by Parliament and the British people, as well as greater attempts at explanation by the Government of the day.

The referendum in Ireland has already been mentioned. I recall very well going to Ireland and promoting the knowledge that flowed throughout Ireland during its referendum. I cannot allow the moment of this sunset clause to pass without reminding noble Lords that in a 2009 survey, which took place at the time of the previous European Parliament elections and was published in April 2011, a huge number of people in the United Kingdom—81.4 per cent—believed that treaty changes should be decided by referendums—no less than 81 per cent, nearly 82 per cent. In all but two EU member states, more than 50 per cent of respondents thought the same. The level of dissatisfaction in the UK with the EU has increased over the years. The only two countries that have bucked this trend are those which have held referendums on treaty changes—Denmark and Ireland.

18:45

In December 2001, I recall very well that, in Laeken, EU leaders declared that EU citizens,

“feel that deals are all too often out of their sight and they want better democratic scrutiny”.

We worked enormously hard from Brussels—in the Commission, the Council of Ministers and the Parliament—to try to “reconnect” with the people of the European Union and we completely failed. It has to be done at grassroots level. It cannot happen from Brussels because it is too far away. The attempt in this Bill is what I would hope would be a beginning of that reconnection. I challenge the Government to offer us more once this Bill has become law, which I sincerely hope it will, but without the sunset clause.

The sunset clause would be a vote of no confidence in the British people. It would say, “Well, we really do not trust you at all. We think that you are okay maybe for this Parliament where we do not think that there is going to be a referendum anyway or at least we do not think that there is going to be a treaty change. But we don’t trust you any further than that. We don’t really want your opinion. We’re going to pick away and pick away at this every single time. We don’t have confidence in you the British public”.

I do have confidence in the British public. I see this as a reform Bill, which seeks to address—I believe that it will do so successfully—and can achieve some form of resolution of the fundamental requirement from which our authority in this Parliament derives. What do the British people want? It is for us to ask them, which is what happened in the Irish referendum. We went out with the package of information. The European Union opened the office and made a huge effort to allow freedom of information flows.

The comment that this Bill is effective only for this Parliament because there will not be a referendum in this Parliament is not the case at all. This Bill has already begun to achieve its purpose. It has got us discussing far more openly for the first time for a very long time the primacy of British legislation and the sovereignty of Britain, which I recall very well we agreed in the coalition document. Yes, we did not agree that there would be referenda on passerelle. In the coalition document, we said that it would be primary legislation but we most certainly guaranteed that no further powers should be transferred to Brussels without a referendum. The passerelle would require primary legislation. We commented on the case for a UK sovereignty Bill, which comes in Clause 18. The coalition document states that there will be,

“no further transfer of sovereignty or powers over the course of the next Parliament”.

If I recall correctly, in the coalition document we declared that the Government would pass down power to the people and away from the centre. The coalition agreement states:

“We share a conviction that the days of big government are over: that centralisation and top-down control have proved a failure … it is our ambition to distribute power and opportunity to people rather than hoarding authority within government. That way, we can build the free, fair and responsible society we want to see”.

The sunset clause would give us a long night of further discontent with the British people and rightly so. I urge noble Lords, despite the feeling of frustration that somehow they do not like referenda, to understand that, as the noble Lord, Lord Waddington, has commented, the British people are thoroughly dissatisfied with the fact that they have not been consulted. This is our opportunity. I think we should grab it and forget the sunset clause.

[Lord Hamilton of Epsom]

My Lords, I will not delay the House for long and I certainly will not repeat many of the arguments that have been made extremely well by my noble friends. But I should like to take up a point made by my noble friend Lady Falkner who was seriously worried that the problem would be one of delay when this Bill has to be renewed at the beginning of each Parliament. I am afraid that I come from a more paranoid side on this. My view is that we do not want a sunset clause because, if we had, say, a non-Conservative Government, it might be quite attractive for them to let this Bill lapse. There would be a bit of a row that would last 24 hours and they would get away with it. It would be much more complicated—indeed, almost politically impossible—to put forward a Bill to cancel this Bill, put it out of business all together and repeal it. So I come from a rather different angle but I reach the same conclusion as my noble friend.

[Lord Pearson of Rannoch]

My Lords, I congratulate the noble Lord, Lord Hamilton, who has just answered the noble Lords, Lord Dubs and Lord Flight, and has come to the right conclusion. I am no longer bamboozled by this Bill or this amendment.

[Lord Hamilton of Epsom]

I am not sure that my erstwhile noble friend should take such comfort from that. One of the reasons people join UKIP is that they are worried that they are going to be drawn further into the European Union, and certainly they will be much reassured when this Bill reaches the statute book that that is not going to happen. I suspect that he will see his membership going into reverse, but that will be his problem rather than mine.

I was interested in the opening remarks of the noble Lord, Lord Kerr. He said that the whole of this Bill is otiose because it would not have any effect in this Parliament. My noble friend the Minister intervened to say that of course it would in terms of updating the stability and growth pact because it was going to be exempted, and there might be other amendments from the European Union. I am afraid that I do not take quite such a phlegmatic view. The eurozone is in a state of crisis at the moment. That makes one wonder, when one looks at the people proposing these amendments, how many of them would have suggested that it was a good idea to join the eurozone some years ago. We all mistakes in politics, but that would have been a major one. If we had joined the eurozone and we were in it today, I can tell the House now that the asset bubble we have seen over the past few years would have been even bigger because the interest rates we would have enjoyed in the eurozone would have been much lower and this country would be in even greater difficulties than it is today.

Let us return to the eurozone. I believe that it is reaching a crisis point, one where a decision has got to be made. Members of the eurozone either have to let the thing collapse and completely disintegrate with defaults happening one after the other, starting with the periphery countries and moving steadily towards the centre, or they have to completely revamp the eurozone so that there is probably a finance ministry or a massively beefed-up European Central Bank. The reason I am boring the House with all this is that that would need a treaty change. The Government would argue that such a treaty change would concern only members of the eurozone, not the United Kingdom, but I have to say that that treaty change would have come through both Houses of Parliament and possibly could be subjected to judicial review as to whether there were transfers of sovereignty as a result of such a treaty change coming through.

Noble Lords might say that that is not going to happen in this Parliament, but is it not? At the moment there is a guarantee on sovereign bonds within the eurozone that will last until 2013, but we have to ask what will follow after that. I have to remind noble Lords that 2013 comes two years before the time when we are to have a general election in 2015. I give way to the noble Lord.

[Lord Richard]

My Lords, I am obliged to the noble Lord. Is he seriously suggesting that we should have a referendum in this country on treaty changes that affect the eurozone, of which we are not a member?

[Lord Hamilton of Epsom]

What I am saying is that I am sure that that will be the position of the Government, and I did say that it would be subject to judicial review. It may not necessarily pass the censor within the terms of judicial review that we do not have any transfers of sovereignty involved in such a treaty change. I think that we may well be involved in a referendum, and if we are, I can reassure the noble Lord—I am sure he would like to know this—that I shall very much advocate that we actually support any treaty change of that sort. That is because if the eurozone disintegrates, there might be a bit of schadenfreude from people like me in the Conservative Party, but I have to say that it would give us another major financial and banking crisis on top of the one we have already had. So I will campaign enthusiastically that we should accept such treaty changes.

I do not think we should sit here and imagine that there are going to be no more treaties coming in the life of this Parliament. Things change, and they can change very fast. The eurozone is in a state of major crisis and I am not sure that they can go on putting sticking plasters on it for another four years.

[Lord Triesman]

My Lords, a short while ago the noble Baroness, Lady Nicholson, said that the legislation had already served part of its purpose in that it has engaged us in debate. I have to confess to her that I have not run into a huge amount of discussion of it elsewhere. Nevertheless, I do not deny the truth of the point that we have had a major debate, but the points made by many noble Lords still bear testing. It is plain from this legislation that it is not intended that anything other than the passage of the Bill and the discussions on it will happen during this Parliament. I listened to what the noble Lord, Lord Howell of Guildford, said in an intervention, but unless I misunderstood it Clause 4(4) provides for an exemption around the stability mechanism, so that will not become the subject of the whole package of a parliamentary decision and a referendum either. So let us start, if we may, with the reality of the position: there will not be an event of that kind.

The tests that may arise would be likely, if they happen at all, to occur either in the Parliament that follows this one or in the Parliament beyond the one that follows this—some way off. Those are exactly the circumstances which my noble friend Lord Grenfell described—I think he was the first person to use the words—as a step in the dark, and the noble Lord, Lord Williamson, made more or less exactly the same point. One of the things that concerns me, and one of the reasons I have added my name to the amendment so that the Front Bench is offering its support, is that inevitably we will have a period during which we test whether these new constitutional arrangements make sense, work well, are deliverable, do not undermine the Government of the day and do not undermine the parliamentary process. But the plain fact is that we do not know. I doubt if there is a noble Lord in this House who could do more than I can do, which is to suppose what might happen, but we do not know. What we do know is that when it is tested, we are more likely to know. Those are the circumstances under which we will gain any kind of authoritative understanding of what this constitutional change may mean. I do not think we do ourselves any favours by pretending that we know when we do not.

There may well be minor issues or whole treaties. On the former, the noble Lord, Lord Howell, may be right to say that referendums would not arise around smaller things. Periodically, if he is right, they could be around whole treaties, which are much larger things. Moreover, I accept what the noble Lord, Lord Kerr, said, that these are likely to be very unusual events in themselves. What is more, I shall go on to assert something which is critical to the clause because I want to try to deal with this as a debate on an amendment tabled at the Report stage. I continue to assert that some of things which might be considered to be large and significant issues, and therefore may well call for referendum conditions after decisions reached by both Houses of Parliament, will not themselves create the need for a referendum either.

I say that because I do not believe that any Government in the foreseeable future will carry legislation in either House about joining the euro—I can assure the noble Lord, Lord Hamilton, that I have never advocated it, so I can say that with a clear conscience. I cannot believe that either House will succeed in persuading a majority of either House that we should relax the Schengen conditions and change our border arrangements. I know from first-hand experience as a Minister in the last Government that there was not the smallest chance of that happening, or of anyone believing that it would be desirable for it to happen. I shall not regale the House with arguments about an island people and so on, but noble Lords will understand the temperamental mindset of this country over a very long time. I do not believe for a moment that either House would carry by a majority the need for legislation which would then go to a referendum on changing the fundamentals of our legal system from what it is now to one based on Napoleonic law or some of the other systems of law in Europe, and I do not believe that either House, whoever is in Government, would succeed in conceding decisions on our taxation regime to anyone else and put that to a referendum vote. The things that really might bite on the people of the United Kingdom, if they were asked to think about them, will not be put to them. I shall come back to the insurance policy that the Bill claims to be in that context and why the sunset clause is a reasonable solution.

19:00

I said in earlier debates, and it has been quoted back at me, that in those areas we should just say no. It is our belief that any Government in the foreseeable future will just say no. Their just saying no will probably have the consequence of protecting what we most seek to protect; that is, the credibility of our parliamentary system in the eyes of the public.

I think that it was said from the government Benches that it would be pretty much inconceivable that anybody would go back with propositions of this kind at a general election or at any other time in the foreseeable future. I do not believe that our elected representatives—I shall not use the phrase “political class”; it is intended to be derogatory and I am not going there—or those of us who have had the good fortune to be made Members of this House will go back with propositions of that kind. There will be an expectation on the part of the public that, in those fundamental areas, we would say no. It undermines public confidence if they believe that we do not have sufficient courage of our convictions to say no to things that are of such importance, and that we require somebody else to do it.

I said a moment ago that I have understood the point of this Bill to be that, in an atmosphere where people do not trust politicians to say no and there has been too much drift, we need to insure ourselves against failing the political test in Parliament. I do not believe that we would do so, but the point is, were we to fail the test or to continue to fail it, this Bill as an Act would be insurance against it. It is like saying that you need insurance against that moment when you have totally lost your marbles, when you really have not understood the fundamentals of political life and have decided to embark on a politically suicidal course of action which nobody would have expected. It is like buying very expensive household insurance but routinely trying to set fire to one’s own curtains, not in order to claim the insurance but just to prove that, somehow, there was another fallback proposition which would sort it all out once you had set fire to the building. It is essentially a silly proposition.

The test of this Bill as an Act will be a test in practice, but the test in practice has the following characteristic—which the noble Lord, Lord Kerr, introduced and a number of noble Lords have described far more eloquently than I can. It is a test of a very profound constitutional change; it cannot be diminished or dressed up in any other way. It is a profound constitutional change, argued for by those who believe that it is necessary as insurance against setting fire deliberately to one’s own curtains.

There is significant merit in bringing together the two themes that I am trying to put to your Lordships this evening. The first is that we are going into an area where nobody can claim to know what will happen; the second is that it is very profound. For those reasons together, I ask what could be the sensible objection to a new Parliament concluding as to whether the legislation was working or whether it wanted to renew it.

I am in absolutely the same frame of mind as the noble Baroness, Lady Williams, in that the one thing that I do not fear is discussion of renewal in a general election. I have heard all sorts of arguments produced during this debate that somehow it would make Europe so contentious that it would hijack the election. Elections are about a wide range of things; we should not delude ourselves otherwise. They are about, among many other things, health, pensions and the economy. It is a very broad canvas. If we had a serious discussion of Europe in the midst of that, I would regard it as a red letter day rather than the opposite, because we have so seldom had that in the past. Discussion of Europe has so often been a set of parodied arguments, on both sides. It has been wholly unsatisfactory and never really given people the opportunity to make a strong assessment of the advantages or disadvantages of our involvement in Europe. I do not accept any part of the argument that, following a general election in which this matter may well have been discussed with great rigour and precision, we should not then say, “Has the test shown us this works? Is the constitutional innovation one that we want to live with for the foreseeable future?”. Those are absolutely sensible political preoccupations.

People have playfully talked about the record of the noble Lord, Lord Kerr, as a civil servant rather as though that should frighten rather than inspire us all. He put the question broadly in these terms: does each Parliament want to see its authority revoked and, therefore, does each Parliament want to conclude that it does not want to see its authority revoked? It may or it may not—I do not know the answer to that either—but it would be a very bizarre understanding of the authority of successive Parliaments in the constitution, unwritten as it is, of our country for that not to be something that a Parliament would be entitled to consider when it was considering constitutional change of this kind. A sunset clause gives that opportunity.

[Lord Howell of Guildford]

My Lords, I am, as I have said, in danger of repeating myself in these long debates. As I said in Committee, however, it would be completely unprecedented to bring a sunset clause into this kind of legislation, which has constitutional implications and addresses constitutional developments of a kind which have already gone on in the past. The noble Lord, Lord Triesman, in his eloquent summing-up from his side, talked about profound constitutional change. For many people that has already recurred. That is the problem. That is where we are. That is where the disconnect begins. That is where people feel that great changes have taken place but that Governments have not give them adequate assurance that they were in their interests. It is to give people in this modern age of changed patterns of democracy—still a very democratic age, still a very powerful parliamentary age—a say in profound constitutional change that we are putting forward this Bill and seeking to construct something for the longer term.

A sunset clause, I have no hesitation in saying, would terminate that say. It would seriously undermine our attempt to reconnect the British people with the European Union and with the whole European project as it evolves. It would weaken the whole momentum that we all want to see maintained—and I have been involved in European Union affairs probably as long as anybody in this House—in order to have a healthy European Union that has the popular support and consent in the 21st century which at the present it evidently and dangerously lacks. We need to focus on that point again and again unless we want this trend to grow worse.

The view has been expressed again and again, in this amendment and in previous discussions, that the Bill is an attempt to bind future Parliaments. I have to say again—I am not just saying this as a debating point—that that is simply not so. It is not just an exaggeration, it is a canard. It is a well established constitutional principle—to which we have rarely adhered over some say 200, some say 300 years—that no Parliament can bind its successor. It will always be open to future Parliaments to repeal some of the provisions of a Bill, including this Bill, through primary legislation, just as it is possible for this Parliament to seek to repeal or disapply any existing legislation which may well have been painfully and sincerely built up by previous Administrations. In fact this Administration, the coalition, have inherited many aspirations and some excellent work from the 13 years of the previous Labour Government. It has been done. We did not at the time sit over there and say, “You mustn’t pass these laws because although we like them it would be binding future Parliaments”. That is absurd. I will return in a little while in more detail to the non-validity of the whole line of thought that somehow there is a binding of future Parliaments in the Bill.

If the Bill were to have disastrous effects on the UK’s relations with the European Union and tie our Ministers’ hands—all of which effects also are canards because they simply do not begin to match with the reality, which is of course that Ministers will be absolutely free to negotiate, deal and involve ourselves in the many articles under the enormous competencies at present available to the European Union—there is a remedy: the Bill can be amended or repealed. In fact, the Government resisted amendments in the other place that would have entrenched the provisions of the Bill and made repeal more difficult.

So although we hope that the provisions of the Bill will become an enduring part of the UK’s constitutional framework—that is a perfect, sincere, legitimate and well founded aim and ambition—we did not think it right to single this Act out to be entrenched. However, we do think that it is right that any repeals or amendments should have to go through the same rigorous process as the original Bill. We do not think it right that the powers that the Bill gives to the people and to Parliament should just be snatched back or taken away in a cavalier fashion by minor arrangements. In other words, amending or repealing parts of the Bill should be done through a further Act of Parliament, which is the usual approach for primary legislation. I make that point at the beginning because we have seen common misconceptions run through Committee day after day, and they are not founded on fact, reality, present practice or past experience.

Another misconception repeated today—I was bold enough to intervene when the noble Lord, Lord Richard, was speaking about it—is that the Bill will not apply until the next Parliament. I do not understand how that idea has crept into the debate and gets repeated and repeated, because it is simply not the case. Within three months of the Bill coming into force, as I hope it will, we will use its provisions to make a statement on whether the recent European Union treaty change to Article 136 constitutes a transfer or power competence. As we think that it does not, we will then introduce a Bill to ratify that change. Without the EU Bill, none of that would happen.

The noble Lord, Lord Triesman, is right: that will not trigger a referendum because of the items under Clause 4(4). However, the Bill will certainly operate and apply in this Parliament to a treaty change that goes through the necessary procedures in this Parliament. It is true that we do not expect to hold a referendum under the Bill during this Parliament, because the coalition Government have said that that they will not agree to any treaty or passerelle that could transfer competence or power from the UK to the EU in this Parliament. However, the existence of the Bill is still a binding force. It is binding on this Government and their actions and views. What I have stated is a political view and an intention of the coalition. It is not the will of Parliament or some entrenched and deep unavoidable force. It is the will of the Government. As we know—perhaps I should not add this point—it is possible for the will of the most determined Government suddenly to go into little U-turns and reverses from time to time. It has happened to us all.

19:15

The Bill provides for the promise that we have made, and for that promise to be tested. I hope that we can stand up to the test. It provides an additional safeguard of a referendum should the Government fail to keep their promises. In short, it is complete nonsense to assert—and for some reason people I admire very much in this House have kept asserting—that the Bill somehow does not apply to the present Government and the present Parliament. Of course it applies. It will apply from the moment it reaches the statute book.

I also point out that the same noble Lords are coming at the Bill from two opposing directions, which makes defending and promoting the Bill a little confusing for those of us standing in my position. On the one hand, we have had the heavy criticism that it could lay us open to frequent and trivial referenda. The more that one examines how the whole system of Brussels works—works today and has worked in the past, as many noble Lords know very well—the more obvious it is that that will not happen. Yet in the same breath we are criticised for saying that we do not expect there to be a referendum in the next four years. Both those propositions simply cannot be true.

Noble Lords raised the concern that we are setting a precedent for the extensive use of referendums in areas to which they are not suited. First, I do not think that it will be extensive. I will come to the point about the seriousness of the issues to which various items in Clause 6 and Schedule 1 relate, but we are certainly not the first British Government to devolve power to the British people to decide on important issues. Just think back to the Scottish and Welsh devolution referendums at the end of the 20th century, or those for regional assemblies.

We would not be alone among member states in having requirements for referendums on EU matters; one has only to look to Denmark, Ireland or the Netherlands for examples. Indeed, I am advised that only five member states of the present 27 have never held a referendum on an EU matter.

The sunset clause proposed would set a thoroughly undesirable precedent. It is perfectly true that sunset clauses have been used, for example, where the policy is time-limited, as some of my noble friends said and the noble Lord, Lord Risby, pointed out, as is the case with the Public Bodies Bill, or where there is a need for parliamentary supervision of short-term emergency measures such as those relating to counterterrorism, as was pointed out by some of my noble friends. However, sunset clauses have not been used to limit the applicability of legislation on a long-term policy. It would be completely the wrong message to provide for a means to consult the British people on important issues only to use an obscure technical device to remove that provision before it could be used.

In this case we are not talking about a sunset clause to limit the powers of the Executive—the high and mighty Government—which should, after a while, be removed again. We are talking about a sunset clause to limit powers that have been given to the people: powers that have been devolved from the central authorities, with Parliament fully involved all the way along. Another canard in all this is that Parliament is not involved in any of these arrangements and the referenda processes where they do occur. Clearly the proposition in this case that a sunset clause would limit the powers of Government is upside down: it would limit the powers handed over to the people.

The noble Lord, Lord Grenfell, rightly said that, in this case, it really is different. There is a huge difference. The difference is that we would be seeking to limit and take away powers that had been devolved from the central authorities and from the state instead of using the sunset powers that we normally have to limit the powers of the state for certain purposes over a certain length of time.

If I sound a shade negative to your Lordships, one aspect on which I would like to strike a more positive note is that I welcome very much the acknowledgement put most eloquently by my noble friend Lady Williams but echoed by others that there now seems to be general acceptance of the provision for a referendum lock on key constitutional issues. There is also consensus on the provisions in Part 1 giving Parliament greater control, which is very good. That is certainly an advance. I suppose that one is left with a little puzzle. If this is now accepted as the right way forward, why would we want a sunset clause or legislation to question all those principles? The only difference that remains between us—and it is getting narrower—is what those fundamental issues of constitutional significance are.

The Bill is complex, as I recognised the other evening when answering the noble Lord, Lord Rowlands. It sets out a whole range of what look like small issues but are in fact the wires sticking out of the six big, red-line issues that are of fundamental constitutional importance. Some of your Lordships have found difficulty in grasping that and yet here they are before me. Under my hand are the six great issues of foreign and defence policy, justice and home affairs, citizenship and elections, rights of membership and enlargement, social security and employment policy, and economic and tax policy. Successive Governments, both before and after the Lisbon treaty, have said that these matters must be ones of great significance to our country and that we do not intend to see any further transfer of power or competence in these areas—or, if we do, we have to put a very good case to the people and they should have a say. The proposed new clause goes the other way. It risks disconnecting the British people from important decisions being taken in their name. It removes the certainty that the Bill provides and leaves an unstable foundation for building a better relationship between the people and the European Union.

I will say a word in detail about sunset clauses and legislation because that is what the amendment is about and we must focus precisely on its provisions. I repeat that a sunset clause in this legislation would be an undesirable precedent. We have used sunset clauses elsewhere in legislation, for example where the policy objective is time-limited—as is the case, as I have already said, with the Public Bodies Bill—or where there is need for parliamentary supervision of short-term emergency measures. However, they have not in principle been used to limit the applicability of legislation on long-term policy and certainly not for Acts which limit rather than expand governmental powers. That is an extraordinary inversion of the past use of sunset clauses. Prior sunset clauses have generally been for cases where power has been given to the Executive to act on a given issue for a given period of time. The contrast with what is proposed in the Bill is glaring. The Bill seeks to devolve power from the Executive to Parliament and the British people. The amendment would take that power away and in effect give it back to the Executive. That is the big difference. If your Lordships want happily to validate the taking away of power at a certain point in the future from the people then let the amendment go forward on that basis, but it seems a profound rejection of the whole spirit of this age in which we seek to devolve power to the people and not take it from them.

We are all aware in your Lordships’ House that we have set out a new approach to reducing regulation by requiring some form of sunset provision for all new regulation where there is a net burden or cost to business. That is in order to reduce the regulatory burden that unnecessarily halts growth, reduce the overall volume of regulation, help improve the quality of design and so on, and ultimately reduce the cost of regulation on business and society. None of these aims will be fulfilled by including a sunset provision of any type in this legislation. Moreover, it has previously been claimed that, where there is a proposal for legislation that would address short-term or specific policy aims, there should be a sunset provision included in that legislation so that it expires once the aim has been fulfilled. That was part of the argument given in favour of the sunset clause put by this House into the Fixed-term Parliaments Bill last month, and was part of the rationale for the inclusion of a review clause in the Prevention of Terrorism Act six years ago. Those things make excellent sense.

The Bill is not being proposed to address a short-term issue. That is not what we are doing. The erosion of trust between the people of this country and the people who serve them and make decisions on their behalf on whether to transfer further powers or competence to the European Union means that we need to do something now. What we do should become part of an enduring, constitutional framework so that the British people can have their rightful say on the issues where they want one. The noble Lord, Lord Triesman, touched on this—that the matter ought to ride above political parties. It is in the interests of the established structure of this Government that we can develop a pattern and framework of this kind. I find this extraordinary, though I can see some people’s motives here. I suspect that some of those motives run very deeply and sincerely into issues about our whole attitude to the European Union. The general proposition that we should provide this kind of lasting framework, and not one that you simply knock out with a sunset clause, ought to be supported by all political parties and indeed by those of independent mind who play a key part in the legislature and work of both this House and Parliament generally.

It is our firm intention that the provisions of the Bill should become an enduring part of our constitutional framework. That is not a new proposition. Other areas of policy have been established successfully on a long-term basis. I gave the example in Committee of privatisation. A previous Government of whom I was a member established the privatisation provisions in the hope that they would endure—they have done. That was not binding a future Parliament but setting out a new pattern of industrial structure and accountability in this country which endured. I do not remember anyone in the successor Government under Mr Blair saying that they had been bound in some wicked way by the previous Tory Government. It has always been open to Parliament to repeal or disapply the relevant legislation. There are lots of other examples. The national curriculum was set up more than 20 years ago and the essence of it remains in place today. There was the devolution of Scotland, Wales and Northern Ireland, approved by a previous Parliament. The Governments of whom I was a member did not feel bound by that. Then there is the European Communities Act itself.

In short, the amendment would be going back to the old ways. It would take power to the centre again, back to the central authorities and to ministerial discretion. The principle behind it seems to be that we had better not put these matters to a referendum, or not for long, because people might be wrong. I am reminded of Bertolt Brecht’s sardonic remark that when the government and the people disagree the answer is to change the people. That is the implication behind those who seem to shy away all the time from sharing parliamentary power with the people through appropriate referenda at the appropriate points. That attitude belongs to the 20th century. The Bill belongs to the 21st century and those who support the amendment tonight are looking backwards, not forwards. They should withdraw the amendment, which damages the Bill to the point of destruction.

[Lord Kerr of Kinlochard]

My Lords, I thank the Minister warmly for responding with his customary courtesy and patrician patience to our obtuseness. I thank all those who have taken part in this little debate. Sometimes it seemed like Second Reading again but it was good to see some new faces not seen in the seven or eight days of Committee. I am always glad to see new people join the debate.

I was particularly grateful for the contribution from the noble Lord, Lord Jopling, who speaks with great authority and who gave the answer to the noble Baroness, Lady Falkner, on how the procedure set out in the amendment could be made to work. I believe that it could be made to work here in this Parliament and I know that it would work perfectly well in Brussels. I have been there during a general election. I recognise that the night, though it could be very short, will not be short enough for the noble Baroness. I accept that.

I agreed very much with what the noble Lord, Lord Waddington, said. There is no doubt that, at least in the first general election, the two parties would make pledges. That is not a bad idea. I agree with the noble Lord, Lord Triesman, and the noble Baroness, Lady Williams, that bringing EU issues into general elections is exactly what we want to happen to deal with the disconnect. It is a far better way of dealing with it than the obscure provisions in this extraordinary Bill.

It makes sense to have a minimum reappraisal of at least once every five years, if we are having fixed-term Parliaments. At the start of each Parliament, it would make sense to ask Parliament whether it agreed that in relation to EU business—though not in relation to any other business—its rights and sovereignty should be subscribed to this extent. It would also make sense to consider who is right about the effects in the outside world, on the developments in Brussels and the British standing there, as well as on the British ability to support and advance the national interest in Brussels. I may be completely wrong, and I accept that, but I think that it makes sense to have a look every now and again and see who is right. Therefore, I would like to test the opinion of the House on this amendment.

19:31

Division 2

Ayes: 209

---

Labour: 152
Crossbench: 25
Liberal Democrat: 18
Conservative: 4
Bishops: 1
Democratic Unionist Party: 1
Ulster Unionist Party: 1
Independent: 1
Plaid Cymru: 1

Noes: 203

---

Conservative: 132
Liberal Democrat: 47
Crossbench: 14
Ulster Unionist Party: 2
Bishops: 1
Labour: 1
UK Independence Party: 1
Independent: 1

19:43

Amendment 36 not moved.

Arrangement of Business

Wednesday 15th June 2011 Lords Chamber

Announcement

19:43

[Lord Wallace of Saltaire]

My Lords, as this brings the Report stage to an end we are now able to take 90 minutes rather than 60 minutes for what was to be the dinner-break business. That now becomes the last business of the day, which means that the debate will be time limited to 90 minutes rather than 60 and that speakers other than the noble Lords, Lord Barnett and Lord De Mauley, are limited to four minutes.

Barnett Formula

Wednesday 15th June 2011 Lords Chamber

Question for Short Debate

19:44

Asked by

[Lord Barnett]

To ask Her Majesty’s Government what plans they have to change the Barnett formula to a basis of need.

[Lord Barnett]

My Lords, I thank the Minister very much indeed for what he has just said. Perhaps I should wait a few minutes.

[Baroness Anelay of St Johns]

My Lords, I know that we have just had an interesting afternoon but we still have great interest in the Question for Short Debate asked by the noble Lord, Lord Barnett. There are 15 speakers—a long list. I invite him to start his speech now.

[Lord Barnett]

My Lords, I am grateful to the noble Baroness. I have spoken on this subject fairly often and I have been pressing this matter for a long time. In many ways, I can do no better than to quote the Select Committee of your Lordships’ House in support of everything that I might say this evening. I am delighted to welcome to the debate four distinguished members of that committee: my noble friend Lady Hollis, the noble Lord, Lord Forsyth of Drumlean, and others who I see around. We also have a maiden speaker, who I am delighted to welcome in advance. He comes fresh from the Scottish election and he might be able to tell us rather more about opinion in Scotland, although I have a fair idea myself what the Scottish people are now thinking on this subject.

I have been pressing for a very long time for the formula in my name to be changed to one of need. I told the previous Government that if they had become so fond of my name, I did not mind if they kept it provided that it was based on need rather than on population, as it is now—unfairly, as it has turned out. The first question, of course, is: what is it? Most Members who will be speaking in this debate will know very well what it is. However, the question then is: what needs to be done?

I said that we have some very distinguished members of that Select Committee with us this evening. More than that, it was a very distinguished committee. I had difficulty initially in getting the House to agree to an ad hoc Select Committee but we got one and we got my noble friend Lord Richard, the former Leader of the House, to chair it. As I said, it had a distinguished membership including the former Chancellor of the Exchequer, the noble Lord, Lord Lawson. He was a distinguished member of that committee, as were my noble friend and the noble Lord, Lord Forsyth. Many others, including the noble Earl who is a Lib Dem and those from all parties and all regions of the country, were members of that committee and I am happy to say that they came up with a unanimous report. This report needs careful reading because it tells anybody who is the slightest bit interested, first, what the problems are and, secondly, what needs to be done.

The terms of reference were clear. I am not going to bother with quoting too often from the Select Committee's report, because it would take too long and I want to leave as much time as possible to the noble Lords and the noble Baroness who are going to speak in this debate. Even though it has been extended and is now going to be an hour and a half, I am a bit disappointed—I thought it might go on until 10 o'clock. However, I am sure that it will give time to noble Lords to make their feelings felt on the issue, which is: what should be done now? There was a Calman commission, as many will know, on Scottish matters but that had different terms of reference. It was looking primarily at devolution and even though it obviously had to refer to the Barnett formula, it did so almost en passant and did not really dwell on the main issue, as our House of Lords Select Committee did.

I come to the main question: what is the Barnett formula? In case people do not know, I shall quote, which I do not do very often, from paragraph 11 on page 13 of the report. The formula is,

“the mechanism used by the United Kingdom Government to allocate just over half of total public expenditure”,

to the regions. Certain parts of public expenditure are excluded, such as defence, foreign affairs and social security, which are already allocated according to need to a large extent, and do not need to come under the Barnett formula. When the Select Committee looked at the formula in 2007-08, total managed UK government spending was more than £582 million—rather a lot of money to be left entirely to changes in population, which is what happens now. It effectively results in approximately 80 per cent of expenditure in the UK going to England, 10 per cent to Scotland, 5 per cent to Wales and 5 per cent to Northern Ireland. This has varied slightly over the years because of changes in population and Governments amending the formula slightly.

The plain fact is that the formula was still based on population rather than need. That resulted in gross unfairness, as the Select Committee indicated. It noted clearly that the public expenditure allocated to Scotland has resulted in its obtaining substantially more than it would have on the basis of need. The current leader, Alex Salmond—a very shrewd political operator if I may say so—has used those extra funds to huge political advantage by helping the people of Scotland with, for example, university fees and prescription charges. I am sure that this is very welcome but the people of England do not get that. The people of Scotland have benefited substantially. I am told by many people who tell me what regularly appears in the Scottish papers that my name is reasonably well known there. Indeed, Tam Dalyell, the former Member for West Lothian, drops me notes from time to time to tell me exactly what is being said and how often.

What changes should we make? The noble Lords on the committee came up with a very clear answer: there should be an independent commission. Its name is not terribly important, but the committee thought of the UK funding commission. It would look at how the basis of need should be dealt with, and make clear and firm recommendations thereafter. Because there would be substantial changes to Scottish public expenditure, there should be a transitional period so that any changes would be spread over a number of years.

I know that there are political concerns. Any Government making these changes may lose out in elections. I can say only this about the formula that bears my name: when I published a book called Inside the Treasury, which covered my five years as Chief Secretary to the Treasury, the phrase “Barnett formula” never appeared. It appeared only later because the Thatcher and Major Governments not only created the formula but kept it going for 18 years. That is when it became well known. Those Governments did not want to upset the electors of Scotland or Wales. So what happened? In the 1997 election they lost every seat in Scotland and Wales. Please do not worry about upsetting people in doing the right thing and making the right kind of changes that need to be made.

When the Select Committee report was being worked on, the Chief Secretary to the then Government was Liam Byrne. I regret to say that, as his excuse for inaction on the Barnett formula and the need for change, he said that it was too complex. However, the Select Committee has shown that that complexity is just not a fact. It could have this commission that would look into the question of need, and that would be that. Therefore, I have a simple solution for what needs to be done now. My dear friend, the noble Lord, Lord Sassoon, the current Commercial Secretary in your Lordships’ House, who deals with Treasury matters, answered a Written Question of mine about what the Government plan to do. He said that,

“the Government recognise the concerns expressed on the system of devolved funding. However at this present time the priority must be to reduce the budget deficit and therefore any decisions to change”,—[Official Report, 2/11/10; col. WA 380.]

must wait.

I am sorry for going over my allotted time, but I shall just finish; what I intend to say is very simple. I was delighted to quote the noble Lord, Lord Sassoon, who has pleasure in quoting me from time to time, in support of what I now propose. He said that it should not be done because the priority is now the deficit. However, I suggest that it should be done in 2015. The Treasury cannot believe that all its policies will not have come true by that year. I shall formally move in due course on the Scotland Bill. I hope to hear that the Government’s current approach is one that will accept my proposal and hugely endorse everything that the Select Committee said.

19:57

[Lord Forsyth of Drumlean]

My Lords, I believe that we are heading for a real constitutional crisis. The Scotland Bill, which is still in the other place and heading for this Chamber, introduces powers for a separate rate of Scottish income tax. I congratulate the noble Lord, Lord Barnett, on securing this debate, and the Select Committee on which I sat.

As the noble Lord pointed out, the effect of the Barnett formula has been to give Scotland much more than it would have received on a needs basis. The needs basis is firmly established because it is the basis on which the Scottish Parliament distributes money to health authorities and local authorities. There is no magic about this. Professor David Bell of Stirling University has done some work on the size of that amount. Scotland gets around £4.5 billion extra. You cannot change that overnight. It would need to be phased in over a period of years, as the Select Committee indicated.

We need to get on with this. It is the height of stupidity to give a Parliament the power to set income tax rates, but at the same time not deal with the basis on which the baseline funding is achieved. Baseline funding would alter according to policy decisions taken in Westminster rather than in Scotland. That would create opportunities for conflict. Trying to raise £4.5 billion as a Scottish income tax would involve doubling the basic rate of income tax after you allowed for a loss of yield. It is a huge sum of money.

It is therefore imperative that we have a stable, well established basis on which the Scottish Parliament is funded. It should not be open to criticism, and must be seen to be fair to the rest of the United Kingdom for this policy to work. Otherwise, if the Government down here change their policy on health, education or law and order, that will in turn result in a change to the revenue gain to the Scottish Parliament. We now have—contrary to what we were assured would not happen when we had devolution—a nationalist Administration determined to break up the United Kingdom, which will use this as an issue. The noble Lord is right; we cannot have the Treasury deciding how the formula is created; we need to have an independent commission along the lines of the Australian system, which phases its results over a period of time.

I find it extraordinary that the present Government, whom I support, and the previous Government have both taken the same line in saying that it is too difficult to tackle this issue. It should never be too difficult to do what is necessary to maintain the unity of the United Kingdom and to end the resentment which has been created on both sides of the border because of these anomalies. This marriage that was created, the union between Scotland and England, is the most successful the world has ever seen. It is being put under strain because of a failure to address the policy consequences of constitutional change. Parliaments are about raising resources and voting means of supply. It is essential that this is addressed in the Scotland Bill before it has completed its passage through Parliament.

20:01

[Baroness Hollis of Heigham]

My Lords, the Barnett formula matters because something like half of all public expenditure in Scotland is funded by it. It is distributed on a population basis. However, as the noble Lords, Lord Forsyth and Lord Barnett, have said, if Scotland can distribute its own public finance downwards on a needs basis, as it does and as it should do, it can receive it on a needs basis, as it should but does not.

The House of Lords committee, this House and the other place in its January debate this year all said so, apart from HMT, whose coalition Minister said that the Government,

“do not plan to change the Barnett formula”.—[Official Report, Commons, 18/1/11; col. 206WH.]

Yet since our report was published two years ago, public finances have deteriorated and services have been cut while, as the noble Lord, Lord Forsyth, said, £4.5 billion of unmerited, inherited and unearned money is going to Scotland, allowing the SNP to provide additional services courtesy of the British and English taxpayer.

On the formula, if you assume that England represents £100 per head, Wales gets about £112 per head on population, and should get about £115 per head on needs; it is marginally underfunded. Northern Ireland is about right. Scotland should get about £105 per head but instead gets subsidised to the extent of £120 per head—or a subsidy worth about £1,600 a Scottish citizen or, as the noble Lord said, an overexpenditure of about £4.5 billion. No other public moneys are distributed solely by population in this reckless way. Local government, health and social security are all based on need, as they should be. This is not rocket science. It is not complicated. It is done in all other areas of local government policy. For example, in local government you look at needs, which may be the number of elderly receiving attendance allowance, children with special needs or whatever, and you relate that to resources and the capacity to meet those needs—the revenue support grant is often the difference between those two—so that, rightly, Winchester will get less than Wigan, even if their populations are broadly similar, as their needs and resources are different. That is fair.

I do not have much time in which to attempt further financial forensics, although that needs to be done. However, my second point is a moral point. Consider every teenager in Birmingham who is going to lose their education maintenance allowance; every young person in Cornwall who is discouraged from applying to university by virtue of the increased tuition fees; every large family in inner London who will face cuts in housing benefit and may lose their home; every frail pensioner in Norfolk struggling to meet increased care costs. That teenager, that would-be university student, that large family losing their home, that frail pensioner; they are all subsidising—effectively paying for—Scotland’s handouts of free tuition, free personal care and frozen council tax. I object. This House faces welfare reform bills with many of us pleading with the Government for £75 million here and £100 million there for some of the most vulnerable people in our community, yet £4.5 billion is going to Scotland on no other basis than that it always has done. Where is the Treasury’s much vaunted financial prudence? Where, indeed, is our collective moral compass? It is not fair. It is not right. It is not decent and it should end—gradually, slowly; I accept all that, but it should end.

20:06

[Lord German]

My Lords, I congratulate the noble Lord, Lord Barnett, on his fame in Wales. In fact, he is almost a household name, but not perhaps for the reasons for which he would like to be known. The Barnett formula now has a sort of infamy as it is referred to as a formula in disrepute. The case is perfectly well made about a needs-based formula which would serve Wales much better.

The main problem with the formula is what is known as the Barnett squeeze. If any noble Lord can imagine being squeezed by the noble Lord, Lord Barnett, please carry that image in your mind, but the eventual ending of the Barnett formula—we are running towards it at a rate of knots—will result in every person in Wales being paid the same contribution from the public purse as anybody else in the United Kingdom. In other words, no matter where you are, you will be paid the same. The realisation is quite obvious; Wales is the part of the United Kingdom in greatest need. Two-thirds of the population of Wales are in a convergence zone of the European Union because their GDP level falls below 75 per cent of the average across the European Union. That has occurred not just once but twice and is likely, given current performance in Wales, to fall into that category for a third time, so Wales is in greater need than any other part of the United Kingdom as a whole. In fact, two local authorities in Wales compete in terms of their populations having the worst health of people in Britain. The money that is required to treat people well and appropriately across our country should be distributed according to need. The squeeze must be imposed over a period of time and we must move to a needs-based formula.

You could simply transfer the money from Scotland and give it to Wales but I am sure that that is not appropriate. That is probably why the previous Government always said that they were opposed to changing the Barnett formula. Alternatively, you could provide some new money to cushion the change which will take place over time. Timing is important because we now have devolution across many parts of the United Kingdom. We have asymmetric devolution, which means that powers have been handed over at different rates in different areas of public life in Northern Ireland, Scotland and Wales, but gradually the devolved regions are moving closer together in terms of the devolved powers that they have. Devolution involves being responsible for your finances as well. The Scotland Bill, which will come to this House very shortly, as has been said, looks at one side of that coin. It gives fiscal responsibility to Scotland. Undoubtedly, that will occur in Wales as well over the next few years. However, the other side of the coin is that in a United Kingdom it is important that we balance the needs of our country by offering the opportunity of a grant which is disbursed according to need around our country. It is just as important for Cornwall as it is for the north-east of England, Wales, parts of Northern Ireland and parts of Scotland. We need to address that need; it is two sides of the same coin.

Therefore, we will need that change over the coming years. It means that we will make a start on the process of moving towards a needs-based formula. It will take time. To get the financial accountability right, the Scotland Bill itself looks to 2018, and I hope that the Minister in his reply will tell us what steps can be taken now that will lead to the post-2015 change that the noble Lord, Lord Barnett, quite rightly talked about.

20:10

[Lord Wigley]

My Lords, the number of speakers in this short debate is surely evidence that this issue should be much higher on the political agenda. I thank the noble Lord, Lord Barnett, for this debate and for his long-standing recognition of the problems that have grown over the years.

I well remember debating in another place, in 1978, I think, the appropriateness of a formula that should be based on needs—in particular the need to help to bring up the level of GDP per head in Wales to the UK average, whereby we could stand on our own two feet. Since that time the GVA in Wales has fallen from 88 per cent of the UK average to 74 per cent. Wales has pressing economic and social needs, but the formula does not take these on board.

The problems are the assumptions that underpin the formula: first, that the base position of expenditure patterns in 1978 was a valid starting point; secondly, that the changes in spending levels in England represented a valid mechanism on which to base the changes in Wales, Scotland and Northern Ireland; and, thirdly, that circumstances in Wales had changed over the years in a way that reflected the changes in England, ignoring the massive changes in the basic industries, such as coal and steel, over that period. All three assumptions are faulty. Over 30 years those changes have compounded to undermine the validity of the formula. On top of this, as the noble Lord, Lord German, said, we suffer the effects of the so-called Barnett squeeze.

Successive studies have shown that the Barnett formula is underfunding Wales, as a number of speakers have generously recognised. A decade ago, papers were produced at Nuffield College showing the unfair nature of the problem. According to last year’s Holtham commission report, the extent of the problem is a shortfall of approximately £400 million a year for Wales. The Calman commission noted that the Barnett formula,

“is not well related to need”;

and the excellent report of the House of Lords Select Committee to which reference has been made—I thank noble Lords here for their contribution to that report—emphasised that the Barnett formula fails to take into account,

“the relative needs of the devolved administrations”.

The report recommended,

“A new system which allocates resources to the devolved administrations based on an explicit assessment of their relative needs”.

The response of the Labour Government was, frankly, flimsy, totally unpersuasive and showed contempt for the excellent work of the House of Lords committee. Labour refused to change the formula at all.

We need to get rid of the Barnett formula, which has been acknowledged by the noble Lord, Lord Barnett, as outdated, and urgently to replace it with a needs-based formula. The basic question is what the objective should be of any redistributive funding formula. Should it try to sustain broadly comparative levels of public services across these islands? Should it merely reflect the resources that can be raised within the territory of the devolved Administration? Or should it be a mixture of the needs and resources, as was for such a long time the basis of local government equalisation mechanisms?

Frankly, we have had enough of studies, commissions and investigations. What we need is action. In Wales, we need action very soon indeed. We need it urgently and we want it now.

20:14

[Lord Lang of Monkton]

My Lords, it is a particular pleasure to follow the noble Lords, Lord Wigley and Lord German, because, having had the honour to serve on the special Select Committee on the Barnett formula and having seen the outcome of our deliberations that were unanimously agreed, I feel particular sympathy for Wales and the circumstances that it faces in this battle. I will speak this evening on the Scottish front, but we are happy to join the noble Lords in that battle, because we think that the formula is unjust to Scotland also—not because it gives us too little money, but because it completely distorts the picture in Scotland when we have important matters to deal with.

I start with a word of sympathy to the noble Lord, Lord Barnett. Most former Ministers would be thrilled to have a formula named after them—one that may resonate through history. However, the misery on the face of the noble Lord is tragic to see. I have some good news for him. His formula actually worked. The squeeze—which as a former Chief Secretary, although he will not admit to it, he must have really wanted—did work. When I was Secretary of State for Scotland, I commissioned an annual report on government expenditure and revenue in Scotland that persists to this day. It was a kind of balance sheet. In the years 2000 to 2002, it showed that the Barnett squeeze had taken £17 million off the Scottish block. Unfortunately for the noble Lord, Lord Barnett, the special deals that we managed to negotiate with the Treasury at that time added £340 million to the Scottish block.

Barnett has been used as shorthand for the whole complex of public expenditure. In reality, of course, one of Barnett’s problems was that it did not deal with the underlying block, the baselines in each of the countries; it dealt only with the annual increase. Many of those baselines were historically justified. They were the products of battles fought and won in difficult circumstances in parts of the United Kingdom where there were particular problems. Indeed, this happened in England also, because there were parts of this country—there may still be parts of the north-east and north-west—where, for all I know, public expenditure per capita in a defined area is higher than in Scotland, Wales or possibly Northern Ireland.

Scotland’s worst single problem was the nationalisation of all its primary industries. That was a tragic socialist disaster that led to those industries being badly managed, starved of capital investment and riven with industrial disputes. However, that was way back in the 1950s, 1960s and 1970s. Scotland was transformed in the 1980s and 1990s and, as a result, with new investment, increased productivity and unemployment falling below the English level, the baseline Scottish block began to look particularly out of place.

The real problem, as the noble Lord, Lord Barnett, identified, is that no account has been taken of need. That is unforgivable. It was all done in an arbitrary way, with special pleading. Inevitably, when you have territorial departments, you will get special pleading from their Secretaries of State and Ministers. Inevitably, they will win some of those battles. That is now less easy with devolution, but it is another reason why devolution is a less than perfect solution to the world’s problems. It was always hard to define need; and when we sat in the Lords Select Committee looking at this matter, we tried to find an easy way to find an accessible, simple and identifiable way of defining need that would be universally acceptable across the whole United Kingdom. We believe that we succeeded, and that is why it is particularly hard that the Government ignored the findings and shelved our report, almost before the ink was dry.

Add to that the constitutional change that besets us—the slow landslide of devolution, and what is now following, that some of us predicted. The demand for realism is absolutely overwhelming. Contemplating major constitutional change through the Scotland Bill and other measures that are happening, without realism and accuracy over the funding of these parts of the United Kingdom, is simply unacceptable. It would be disastrous. Billions of pounds are at risk, and it is demeaning to Scotland, if it is unfair to England, to be in this position whereby it cannot honourably and decently calculate the true justification of its case or of other cases without the facts. We must have the facts before any further damage is done.

20:18

[Lord Foulkes of Cumnock]

My Lords, I, too, welcome the initiative and success of the noble Lord, Lord Barnett, in achieving this debate. I mean no disrespect to him or anyone else when I say that I fear that events have overtaken not just the Select Committee and its report but the Calman commission and its report.

Frankly, block grants are wrong and the Barnett formula should not be revived on a needs basis, or on any other basis, and should be scrapped. Block grants mean that all the easy decisions about spending money and priorities are made by the Scottish Parliament, which does not make any of the difficult decisions about raising that money. That is why no one has suggested the use of the plus-or-minus three pence in the pound that Scotland already has. The Auditor-General in Scotland has already indicated that free higher education, free prescriptions and free personal care will not be sustainable in the near future without substantial additional income. They will be under threat. What will happen? Alex Salmond, like Oliver Twist, will say, “I want some more”. He is already doing it—asking for more in the block grant and more taxation powers. If he does not get them, who does he blame? He blames Westminster.

That is why I think that the time has now come when we must seriously consider a more radical change in funding devolved Governments. It is described by some as full fiscal autonomy; I would describe it more appropriately as full fiscal responsibility; so that the responsibility for raising money as well as spending it goes to the Scottish and other Governments. Of course, there has to be an agreed pre-eminence of the United Kingdom Government in defence, foreign affairs, welfare and other reserved areas.

It also means that we have to start moving on from our present asymmetrical devolution towards a fully federal system. I am astonished that the Liberal Democrats, who, traditionally, have espoused federalism, are so quiet. Apart from the centralised system, which we have abandoned, or the break-up of the United Kingdom, it is the only stable, justifiable system. We should all be getting together to argue for it. If we do not, if we do not move towards a fully federal system with each of the devolved parts—I am open to argument whether it should be England or regions of England; we have tried regions of England—raising their resources and putting money into the central United Kingdom Government, if we unionists do not become federalists, we will see the break-up of the United Kingdom, which would be a disaster for all of us.

20:21

[Lord Stephen]

My Lords, it is a great privilege and honour to speak in this historic Chamber for the first time. It is exactly 20 years since I gave my maiden speech in the other place, but I guess that I am unusual as, in the intervening period, almost all of my political career has been spent in another other place—the Scottish Parliament. It is very supportive and reassuring to see many of my friends and close colleagues from across political parties—the noble Lord, Lord Foulkes, being one of them—in the Chamber this evening. I agreed with much of what he had to say.

It has been a great experience for me to be back in these Houses of Parliament, with all the history and ceremony, although, obviously, I was slightly disappointed that, unlike in the other place, there was no pink ribbon under my coat peg on which to hang my sword. Most important of all has been, not the surroundings that we see here, but the people. I have had incredible help from so many noble Lords and so many people who support the working of this House, from the doorkeepers through to Lyon, Garter, Black Rod, the Clerk of the Parliaments and many more. Never did I think that I would be present for a phone call that began, “Lyon, this is Garter calling”, and far less that it would be about my future title in this place.

In the Scottish Parliament, never would a week go by without mention of the House of Lords, and two noble Lords in particular. There was the noble Lord, Lord Sewel, and the so-called Sewel Motion, and the noble Lord, Lord Barnett, and his Barnett formula. The noble Lord, Lord Barnett, will be pleased to hear—or perhaps not—that he has outlasted the noble Lord, Lord Sewel, as the term Sewel Motion has now gone, to be replaced by the term Legislative Consent Motion, which is very disappointingly dull.

The Barnett formula, in contrast, is never dull. At times, it has taken on totemic proportions in Scottish politics, often seen as a touchstone of a political party's commitment to Scotland and supported over the years by all of the main political parties and— somewhat ironically, because under them there would be no such formula—by the Scottish Nationalists. That includes my party. It is not my place to be controversial this evening, but I fully share the objective of the noble Lord, Lord Barnett, of avoiding the break-up of the UK. However, as the noble Lord, Lord Foulkes, pointed out, not all share their view. The events of 5 May this year now mean that Scotland's political future is once again centre stage.

In my view, it was unsustainable for the Scottish Parliament to continue simply to receive this cheque, this £30 billion payment, under the Barnett formula, with its only role being to decide how to spend that money. I am very pleased that there was cross-party co-operation here and in Scotland between the Liberal Democrats, the Labour Party and the Conservatives to create the Calman commission and to progress so speedily now to deliver on its recommendations through the Scotland Bill. Creating a stronger Scottish Parliament with new powers, including tax-raising powers, is a vital step. It is a crucial test of any Parliament that it should have real fiscal responsibility. If the Barnett formula has helped, as I believe it has, perhaps through its controversy, to make that change more possible, it will have played a vital role in Scotland's history. It opens up the possibility of further change.

It has been a great privilege to participate in the debate led by the noble Lord, Lord Barnett. I have a hunch that the fame of the noble Lord in Scotland and, indeed, across these isles, will live on for quite some time.

20:25

[The Earl of Mar and Kellie]

My Lords, it falls to me to congratulate my noble friend Lord Stephen on his excellent and constructive maiden speech. We will have to guess which parts we would have been denied had the two minutes not been extended. My noble friend has excellent experience across a range of governance. Firmly rooted in Aberdeenshire, his career in law and politics has prepared him well for this House. Ten years as a Grampian councillor, a Westminster by-election winner for Kincardine and Deeside, an MSP for 12 years for Aberdeen South, a Minister for education and transport in Scotland, leader of the Scottish Liberal Democrats and Deputy First Minister. “Aye, and he's looking so young”.

My noble friend has, to his national credit, the signing of the order abolishing tuition fees in Scotland and, vital for those who live in Clackmannanshire, his coming to Alloa to speak up for the return of the railway after 39 years to the Railway Bill Committee, which wisely chose to sit in Alloa for its scrutiny of the Sterling-Alloa-Kincardine Railway and Linked Improvements Bill.

The last time I congratulated a maiden speaker was two weeks before the end of the hereditary peerage in 1999. I hope that my noble friend's career will last substantially longer than that of the hereditary noble Lord whom I was congratulating then. Again, on behalf of the whole House, I hope that we will hear from my noble friend often.

I was also a member of the Select Committee. I am very happy with the conclusion of our report: that the Barnett formula should be urgently brought to an end on account of its current unfairness to all constituent parts of the United Kingdom. Proceeding to a needs assessment approach would contribute to the much-needed reform of governance in this United Kingdom.

The unfairness which the outdated, but easy-to-use, formula delivers is as follows. My native Scotland receives more than it is due—perhaps £1,600 per person—largely because of a slight decline in population. Wales and Northern Ireland entered the scheme at a lower than accurate level. Wales has more chronically sick and Northern Ireland has disproportionately more young people. The English regions are treated in widely differing and, frankly, mysterious ways. Resentment against Scotland is, surprisingly, still only smouldering. For the people of Scotland, it is bad to know that you are being subsidised, even if there may be a justification, in part, based on the UK Treasury raids on the oil and gas fields by the Crown Estate Commissioners and the siting of the nuclear deterrent at Faslane and Coulport.

I hope to hear my noble friend say that the Government fully intend to sort out that fiscal unhappiness by adopting our suggested scheme, the bones of which are that each devolved institution would receive a universal sum of so much per head, with premiums paid for certain groups: the very young, the very old and the chronically sick.

Therefore, I encourage my noble friend to commit the Government to ending the Barnett formula, but I believe that it will be important that all citizens in Scotland become aware of the inevitable reduction in the block grant, which will certainly be morally correct. This will be a major consideration for all citizens who are likely to take part in a referendum on Scotland’s future governance. The challenge for those wishing to continue with the parliamentary union is to demonstrate that there is a way to distribute UK resources more fairly, as would be achieved by a Scottish Treasury collecting and spending Scotland’s taxes. I look forward to my noble friend’s reply.

20:30

[Lord Empey]

My Lords, it can truly be said of the noble Lord, Lord Barnett, that he is a great man. His name is, in government-speak, legendary. Having seen it operate from the inside, I do not know what the Department of Finance and Personnel in Belfast would do without the name Barnett. Everything is consequential now that we have Barnett consequentials, and these things are looked at with great interest and concern. However, there are a number of very serious issues here.

Ten years ago, the Northern Ireland Executive entered into negotiations with the Treasury and we started a process of establishing a needs basis. It was our initiative. Work started and, before the first Northern Ireland Executive came to an end, the Treasury produced some needs-based assessments for a limited number of departments. Those established, for example, that we did not have enough money for health but they also established that we got more money for industry than we should have needed at that time. That process was not pursued because the then Executive did not survive and there was an interregnum. Northern Ireland does not fear a needs-based assessment, although the Barnett formula has, by and large, been good to us. We have had the fastest-growing population in the UK and therefore that has been reflected in the formula, but we have also had substantial pockets of real need, and the statistics are there for all to see. With a younger population, there is clearly huge pressure on our education and health systems. We have had substantial inward migration in recent years, and that is also now putting great pressure on housing, jobs and other services. Of course, we also have legacy issues that go back over 40 years to the Troubles, and we are still trying to come to terms with those.

I believe that, whatever other faults it might have had, the formula of the noble Lord, Lord Barnett, at least found an efficient and effective way of distributing resources, which was one of the main problems. If it is proposed to move away from that, agreement will first have to be reached on how needs are assessed, because to some extent need is in the eye of the beholder. What I might consider to be a need, others might not. For example, we have industrial legacy issues, which we share with Wales and Scotland—in particular, the west of Scotland—where huge pockets of people suffer from asbestosis and other industrial-related injuries; we have climatic issues; and our pattern of population distribution is linear rather than grouped, which of course means that more money is required for services.

Because of the political and economic significance of this proposal, it is important that there is national consensus on how it is carried out. Otherwise people will feel a sense of injustice, which will have a political knock-on effect and will be used rigorously by those who want to smash up the union. That would be an economic disaster for any part of the country and we must not contribute to it. Therefore, consensus on the mechanism for assessing these matters will be a critical factor before we carry out this exercise. I urge noble Lords to bear that in mind when we come to take a decision on this issue.

20:35

[Lord Dixon-Smith]

My Lords, I feel a certain wry amusement in this debate because I agree with almost everything that has been said this evening. I last spoke on this subject on the Scotland Bill on 30 July 1998. On that occasion, I moved an amendment to suggest that the formula for distributing funds between the United Kingdom and Scotland should be based on the comparator of GDP per head, which is a pretty good comparator for needs. The late Lord Mackay of Ardbrecknish, in keeping with the philosophy of the times, quietly put me back in my box—I was a relatively new Member of this House—by saying that he did not like my formula because it was too mechanistic. It was mechanistic and I do not apologise for that, even today. If we had been able to work it out and apply it, it would have exposed everything that has been described tonight and brought it out into the open.

So here we are 13 years later discussing the same subject, and I could say, “About time too”. However, we now have to face a different problem. Whatever we do, it cannot be a unilateral decision by this country; there will have to be an element of negotiation with the devolved Assemblies and Parliaments, and I suspect that those negotiations will be very tense and difficult. In Scotland, another potential problem looms: the issue of whether there will be a referendum and a move towards independence there, in which case we will have a very much more difficult and very different type of negotiation.

I am speaking in this debate tonight partly to issue a word of caution—not to anyone in this Chamber or the Palace of Westminster but to the people of Scotland. My view, for what it is worth, is that, if they were to go down that road, they would be sacrificing a milch cow in Westminster for a very uncertain future in which they would assume that the oil and gas in what would become their section of the North Sea might provide an equal source of revenue. Looking at the long-term future, which we do not think about often enough, the fact is that we, together with the rest of the world, are going to have to move away from fossil fuels. They may be an asset at present but over time they are likely to become a diminishing asset. Therefore, the people of Scotland might run the risk of swapping what I would call a moderately safe and secure future for one that, in my view, holds the prospect of a steadily reducing income base for their country if that is the route they choose to follow.

I welcome this debate and pay tribute to the noble Lord, Lord Barnett. I bumped into him in the corridor the other day. That is why I am speaking tonight and I have enjoyed every minute of it.

20:38

[Baroness Morgan of Ely]

My Lords, I have had a really pleasant surprise tonight. I came here expecting to see an ogre in the shape of the noble Lord, Lord Barnett—such, I am afraid, is his reputation in Wales—but he will be delighted to hear that after his discourse tonight I shall be going back and singing of his many virtues to the people of Wales.

Ever since I entered the political scene about 17 years ago, the need to reform the Barnett formula has been top of the political agenda in Wales. Sometimes I feel that it dominates the political agenda too much because it hampers our ability to talk about other issues where we need to increase our GDP and work on other methods in order to do so. None the less, I am afraid that the term “Barnett” has become synonymous with unfairness in Wales. It is something that we need to correct and the only way of doing so is to reform the formula. Of course, there is unanimous cross-party support within the Welsh Assembly for such reform. The current formula, as we have been told, rests on an allocation based solely on population. This year alone, £50 billion of public sector funding has been distributed to the devolved Administrations without even the most cursory attempt to see whether it is based on need or not.

The Assembly set up a panel, led by Gerry Holtham, which concluded that through the methodology that is currently used based on the English regions, Wales is being short-changed to the tune of about £300 million compared with its needs. The problem is that this situation will persist and will become worse if and when we see an increase in public expenditure. Something needs to happen. We need an intermediary step to ensure that we put a floor in the system, to ensure that things do not get any worse when that happens. I do not think any of us believe that this will happen any time soon. We need an immediate response and I would like to know whether the Minister has any plans to put that floor in place sooner rather than later.

I endorse the setting up of an independent commission. We need to ensure that there are representatives from all the devolved Administrations on that commission. I agree with my noble friend Lord Barnett that it does not need to impact negatively on the attempts at budget reduction. Indeed, a member of the Holtham commission, David Miles, made it clear that there is no reason to believe that replacing the Barnett formula with a needs-based system should be costly in aggregate for the UK Government. In fact, the reverse is true. Reform would be completely consistent with the UK Government’s focus on deficit reduction. The key point to remember tonight is how unjust the current system is. A civilised society should distribute on the basis of need and not on the basis of the number of the population.

I have a number of questions for the Minister. In the mean time, what is the current thinking on introducing a floor to the current Barnett system so that we have an intermediary step? Will the Minister commit to an open-minded dialogue, particularly with the Assembly, to progress the wider issue of Barnett reform? What is the timeframe for reform? We need to take account of much broader constitutional issues which are at play here.

20:43

[Lord Shipley]

My Lords, I am grateful to the noble Lord, Lord Barnett, for his continuing determination to bring an end to the distortions of the formula that bears his name. Years ago, it was understandable to introduce the formula, but ever since it has been right to want to get rid of it because it was always meant as a temporary solution to a specific problem.

Not long ago, I was interviewed by BBC Scotland and asked whether I approved of the Barnett formula, given my interest in it as the then leader of Newcastle City Council. I said I could be a strong supporter of it, just as long as the Scottish border was redrawn along the River Tyne.

I have a serious constitutional point as well as a serious financial point. First, the principle should be that public spending should reflect public policy which should then be financed on the basis of need, irrespective of nation or region. The Government's official measure of need includes such matters as age, housing conditions, health, crime levels, unemployment rates, travel costs, and scarcity of population. This is right. Needs assessments may not be perfect but they are better than just using proportionate population figures.

The public spending figures published by the ONS by nation and region in July last year show that planned public spending for 2009-10 was £8,559 per head of population in England; in Northern Ireland it was £10,662; in Wales it was £9,597; and in Scotland it was £10,083. In London it was £10,139, second only to Northern Ireland. In my own region, the north-east of England, it was £9,588, only the fifth highest. It is very hard for people in England to comprehend how this financial anomaly has been allowed to continue for so long when every English region has lower public spending per head than the four devolved Administrations and in some cases significantly higher needs.

That takes me to my constitution query. Why is it that all the devolved Administrations receive more from the Government than English regions? We must understand better the reasons for this, which is why I believe a UK funding commission should be established to assess relative need and a new method for distributing funds in the context of recent and pending legislation. We need fairness for all parts of our United Kingdom.

20:46

[Baroness Quin]

My Lords, I begin with my own words of congratulations and welcome to the noble Lord, Lord Stephen, and I hope that next time he addresses us he is able to do so at much greater length in a more leisurely debate. I also congratulate my noble friend Lord Barnett on his persistence in trying to abolish, in its present form, the formula that bears his name. I have very much agreed with his views over the years and I feel that his persistence should be rewarded with a new Barnett system that is based on needs and that, I hope, is agreed by all parts of the UK as a sensible way forward.

I would also like to express my general support for the conclusions of the report on the Barnett formula, which was the work of the committee chaired by my noble friend Lord Richard. I was taken by the comments of the noble Lord, Lord Forsyth, and my noble friend Lord Foulkes in talking about the new political situation and our need to keep that in mind as well as simply looking at the issue, as we have done over recent years.

I was very tempted to respond to the challenge laid down by my noble friend Lord Foulkes in talking about a federal system for the UK. However, he immediately hit on a particular problem in that suggestion, which is, given the size and the population of England, whether England would be treated as one unit or in devolved units. Despite the failure of the referendum in the north-east of England, I would be rather upset if we simply ended up with a very centralised English system within a devolved UK. I hope that that will not happen in future.

Like the noble Lord, Lord Shipley, I am very much influenced in my comments about the Barnett formula by my experience of belonging to the north-east of England. As he well knows, the formula and the way that it operates has been the subject of much public criticism in the north-east—in fact, it is almost as hot a political potato as it is in Wales. That criticism has also been supported by at times a very vigorous media campaign against the formula.

I certainly know from my own experience, having represented a north-east constituency in another place, that it was impossible to defend the formula to my constituents. I did attempt to do so once as a loyal Minister defending government policy and I very soon found that I was on a hiding to nothing. However, I will pay tribute to the way that, despite the operation of the formula, certainly under the previous Labour Government, many programmes of expenditure were directed to areas such as mine, and that has helped to redress the balance.

However, it remains true that over the years the less well-off regions in England, as well as Wales, have understandably felt disadvantaged by the formula. My noble friend Lady Hollis made the point to the committee that obviously there are more badly off people in populous, prosperous areas. Despite that, in any formula based on territories, a territory such as the north-east, which has a similar population to Wales and a slightly higher population than Northern Ireland, will compare its receipts to them, as it has compared its unemployment rates and general economic performance with Scotland, Wales and particularly Northern Ireland over the years.

We should learn from the international examples mentioned in the committee’s report. We should bear it in mind that although the systems are different to those of the UK, having a regular and automatic review of any funding system is important if you are to have a proper system based on needs. I hope that the Government will take that dimension into account in their future deliberations.

20:50

[Lord Tunnicliffe]

My Lords, I, too, thank the noble Lord, Lord Barnett, for raising this debate. I also congratulate the noble Lord, Lord Stephen, on his participation, and we all look forward to future contributions.

I am praising the noble Lord, Lord Barnett, not only for his enormous contribution to political life in this country, both in office and subsequently in your Lordships’ House, but also for the Barnett formula. Whether one likes it or not, it has a characteristic of having survived; it has a characteristic of having done what it initially set out to do—to stabilise expenditure and allow planning in Scotland and Wales; and it has a characteristic that it has allowed devolution to take place. It has some good points—the sorts of points that the previous Government made in reacting to the Select Committee’s report.

We speak as though the Select Committee report was an answer in itself. It was not. What it said is, “You want to get yourself a commission, then we have this thing called needs and we will write some words about it but the commission has got to fill in the gaps”—a non-trivial task. The committee made a case that there is concern about this formula in Scotland, Wales, England and, I suspect, Northern Ireland. However, one should also remember that any change will be enormously difficult to change again so it has to be got right.

What does getting it right mean? First, it has to be fair. The idea that the word fair is not political is absurd—it is actually a deeply political word—so it has to be both fair and it has to enjoy political consensus. If it does not, it will not sustain, and falling apart quickly would be much worse than where we are. The facts of life are that we are a long way from political consensus. As the noble Lord, Lord Foulkes, points out, perhaps we should consider something a great deal more radical. It has been pointed out by other noble Lords that we need agreement across parties, across the stakeholders, for this to work. We do not have that. The SNP simply failed to engage with the Select Committee—never mind disagreeing with it, it failed to engage. With its recent success in the polls we have to recognise it is a force and it has to be a force in anything that comes out of it.

We have had continuous change and we are going to see this change in the Scotland Bill. We all look forward to the debate on the Scotland Bill because a lot of these issues will come out and we will be better informed after that. There are clear concerns in Wales that mean that any solution has to be a solution for all parts of the United Kingdom, not just for Scotland.

It is perfectly proper that the Government should be concerned about the issues raised tonight and I hope that they will indicate that at some point they will look at how to address these. Equally, I do not urge them to move in haste on this issue. In far too many places in the latest legislative programme we have seen legislation in haste. We do not need it in this case. They have to take a careful, measured approach to secure agreement about fairness and consensus. So I am not going to urge them tonight to act in haste.

20:54

[Lord De Mauley]

My Lords, I am most grateful for the opportunity this evening provided by the noble Lord, Lord Barnett, to debate his eponymous formula. It is an important subject that is of great interest to all parts of the United Kingdom. I thank all noble Lords who have participated. I listened carefully to what they said. I congratulate in particular my noble friend Lord Stephen on his maiden speech, and look forward to many more of the quality that he showed us this evening.

It might help if I explain briefly the background. Changes in the departmental expenditure limit block budgets of the devolved Administrations are determined by the Barnett formula. The calculation in outline is the change in provision of the respective United Kingdom departments in the spending review, multiplied by the relevant departmental comparability factor—which, for example, would be 100 per cent for health, as health is fully devolved—multiplied by the appropriate population proportion. The population figures are updated at the spending review to reflect latest ONS estimates of population, and the comparability percentage is also revisited.

The previous Government decided at the time of devolution in 1999 to retain the block and Barnett formula arrangements for determining the budgets of the devolved Administrations. This was the basis on which the devolution referendums were held. It is worth noting that responsibility for allocating spending in England to the English regions and local authorities lies with UK departments. They make these decisions once departmental settlements have been announced in the spending review. There is no single formula for allocating money within England.

Several reports have recently been published that examined the funding of the devolved Administrations. All were referred to by noble Lords this evening. The Calman commission on developing the Scottish devolution settlement, which was commissioned by the previous United Kingdom Government and the Scottish unionist parties, reported in June 2009 and covered funding to Scotland. The Holtham commission on Welsh funding, commissioned by the Welsh Assembly Government, published in the summer of last year its final report on the Barnett formula and on devolving taxation and borrowing in Wales. The House of Lords Select Committee on the Barnett Formula reported in July 2009.

On the subject of the Calman commission, the Scotland Office published a Command Paper in November 2010. It accepted the recommendations that there should be improved financial accountability, including more tax devolution—the noble Lord, Lord Foulkes, referred to this—and that as a consequence the Barnett-determined block should be reduced by the forecast amount of the 10p devolved income tax receipts. It also accepted taking forward the devolution of other taxes, including stamp duty and landfill tax, and introducing new borrowing powers for the Scottish Executive. Implementing the Command Paper will require legislation: a Scotland Bill has been published and is currently going through Parliament. I listened to the comments of my noble friend Lord Forsyth and of other noble Lords, and certainly I will pass them back to Her Majesty's Treasury. The noble Lord will have ample opportunity to make his points on the Bill as it passes through your Lordships' House.

[Lord Forsyth of Drumlean]

Why did my noble friend leave out, in his list of conclusions from the Calman report, the acknowledgement that we would have to move to a needs-based system of funding?

[Lord De Mauley]

I was going on to say that the House of Lords report recommended replacing the Barnett formula with a needs-based formula. I will deal later with needs-based issues. The previous Government welcomed the House of Lords report, as noble Lords said, although they remained opposed to replacing the Barnett formula. Following the Holtham and House of Lords reports, the coalition Government said in their programme for government that they recognised the concerns expressed about the system of devolved funding, but that the priority must be to reduce the budget deficit and therefore any decisions to change the current system must await the stabilisation of the public finances. In addition, the Government announced in the spending review that there will be consideration with the Welsh Government of the proposals in the final Holtham report, consistent with work being taken forward in Scotland following the Calman commission.

The Government welcome all views on the future of the Barnett formula. I will ensure that Her Majesty's Treasury is made aware of what has been said this evening. In the past, the formula proved to be a durable and robust method of calculating changes for the devolved Administrations. Even the House of Lords report concluded that the Barnett formula had qualities such as simplicity, stability and the absence of ring-fencing. However, we recognise the concerns that are often expressed about it, and were expressed this evening.

There is perhaps a perception, especially in English regions such as the north-east, that Scotland in particular is overprovided for. Comparisons tend to be made using figures published in public expenditure statistical analyses on identifiable total managed spending per head. My noble friend Lord Shipley mentioned some figures. Those for 2009-10 are £8,531 per head for England, £9,940 for Scotland, £9,709 for Wales and £10,564 for Northern Ireland. On a comparable basis, the north-east has the second highest spending per head in England at £9,433.

The perception in England that the devolved Administrations may be overfunded may be exacerbated because they can afford more generous policies; for example, on university fees and the free provision of services. The noble Lord, Lord Barnett, referred to this. I must emphasise that the devolved Administrations have not received any additional money to fund those policies. They have accommodated them within their existing budgets. One of the purposes of devolution is to allow the devolved Administrations to make these different policy choices. This was set out in 1997 in the previous Government’s statement of principles:

“The key to these arrangements is block budgets which the devolved Administrations ... will be free to deploy ... in response to local priorities”.

I am sure that the devolved Administrations themselves do not regard their spending review settlements as generous.

My noble friend Lord German and the noble Lord, Lord Wigley, were concerned about the Barnett squeeze convergence property of the Barnett formula, whereby the percentage increases in spending tend to be lower than in England. The Holtham commission in Wales, in particular, has called for a floor to be placed under the formula to prevent further convergence with England. The expression “Barnett squeeze” reflects that the Barnett formula provides the same absolute increase per head but a lower percentage increase because of the higher baseline levels of spending in Scotland, Wales and Northern Ireland inherited from the past. Of course, the percentage reductions will tend to be smaller than those for many UK departments when spending is cut, as it was in the last spending review. I will return to the subject of Wales in a moment.

Some have raised concerns about the transparency of the existing system. The House of Lords report itself concluded that the quality of data on public spending has improved since 1999. The Government have provided further information about the allocation of grant to the devolved Administrations, based on data which the Treasury provided to the committee and which was published in the committee’s report.

Several, if not all, noble Lords criticised the Barnett formula because it does not take sufficient account of needs. In a similar discussion in your Lordships' House in 2009, the noble Lord, Lord Davies of Oldham, said for the then Government,

“there is no doubt that the Barnett formula has stood the test of time from its development 20 or so years ago”.—[Official Report, 15/12/09; col. 1392.]

The Barnett formula has indeed provided a simple, stable and robust method for funding the devolved Administrations over the past 30 years. It is, of course, for the devolved Administrations to decide how to allocate their overall budget to individual programmes reflecting their own policies. The Barnett formula allows them the freedom to do this, without being second-guessed by the UK Government or any other body on their needs.

[Baroness Hollis of Heigham]

Nobody tonight has queried the propriety of a block grant that allows the devolved Administrations to determine how they allocate their expenditure within that block grant, nor was it raised during the debate that my noble friend Lord Davies answered. The criticism has been about the size of that block grant, which is based on out-of-date, inappropriate and deeply unfair estimates.

[Lord De Mauley]

Yes, my Lords, but as the noble Lord, Lord Tunnicliffe, highlighted, there are complications in reaching a consensus on a needs-based formula. I understand that in the 1970s a formal interdepartmental needs assessment was carried out by the Treasury in consultation with interested departments. It was published in 1979. The study was extensive, involved a number of experts and a large team of people and took two years to complete yet, despite a great deal of time-consuming work, it was unable to reach an agreed conclusion about the basis for a needs-based assessment, and therefore it was not implemented. Indeed, the Barnett formula was introduced at around that time. There is, of course, no consensus across the UK on how to measure needs at the country level and, as in the 1970s, it would inevitably be a contentious and very time-consuming exercise. The noble Lord, Lord Empey, explained some of the problems. A needs-based system would be highly sensitive to the chosen weightings and indicators, on which there is no generally accepted methodology or consensus. The perception of needs and the understanding of the relevant factors may vary over time. Additionally, as policies change, so may the relative cost of implementing them in different countries. The picture may be very different in, for example, 2015. A number of changes are being progressed, such as the Scotland Bill, discussions on the Holtham report, and Northern Ireland consultation on corporation tax. I am sorry to disappoint noble Lords but the Government’s position remains that the priority is to reduce the budget deficit and that any decision to change the current system must await the stabilisation of the public finances.

The noble Lord, Lord Foulkes, raised the arguments in favour of fiscal autonomy. The union dates from 1707 and is one of the oldest and most successful in the world. It has a single currency, central bank, monetary policy and system of financial regulation, which fosters trade, monetary stability and economic growth. Non-devolved risks are pooled and financed centrally. Fiscal autonomy could mean further spending cuts in Scotland, Wales and Northern Ireland, assuming uniform levels of taxation. Also, as my noble friend Lord Dixon-Smith cautioned, it would not be prudent to rely on volatile and uncertain future North Sea oil receipts. However, we believe that financial accountability can be improved in Scotland through greater devolution of taxation, as proposed by the Calman commission.

I spoke earlier about Scotland and I said that I would return to Wales. I know that some consider Wales to be underfunded, which was raised by the noble Baroness, Lady Morgan, among others. In fact, spending per head in Wales is 12 per cent above England and, furthermore, spending has more than doubled in cash terms since devolution. Wales also benefits from very large EU structural fund spending, which amounted to £208 million in 2009-10 and is expected to rise to £233 million by 2014-15.

On Northern Ireland, the Government attach priority to improving the security situation, including by confirming the £800 million financial package which accompanied the devolution of policing and justice just before the general election last April. A further £200 million was announced earlier this year for policing in response to the security situation. In addition, the Government believe that it is important to rebalance the Northern Ireland economy from the public sector to the private sector. They published a consultation paper in March, which included examining possible mechanisms for varying corporation tax. No decisions have been made yet.

Some are concerned that insufficient attention is paid to the English regions. The Barnett formula is not used to allocate spending within England. The Government have chosen to prioritise the NHS, schools and early years, security and the capital investment that supports long-term economic growth for reasons of prosperity and fairness. This means tough settlements for some other areas but, because we have chosen to reform welfare, departmental budgets other than health and overseas aid will be cut by an average of 19 per cent over four years, which I emphasise is the same pace as planned by the previous Government.

There are also claims that the Treasury is judge and jury, and that the Barnett formula should be administered by an independent body. The noble Lord, Lord Barnett, and my noble friend Lord Forsyth raised that. It is the Treasury’s core function to control public spending. But the statement of funding policy sets out the dispute resolution procedure under which, if all other avenues have been exhausted, disputes may be remitted to the joint ministerial committee.

The Government have no plans to change the Barnett formula at present but we will continue to keep all aspects of public spending under review. The Government listen to all views and I thank all noble Lords for contributing to the debate today.

House adjourned at 9.09 pm.